Top five IT channel lessons for the quarter

Posted by: badarrow

Barbara Darrow, channel advisory board, Google, IT channel products and technologies, Microsoft, Oracle, public cloud, Sun VARs remain extremely cautious on public cloud computing and are obsessed with which vendor giants will remain standing after more expected M&A activity. Those are but two highlights of this quarter’s Advisory Board call. But there more below:

1: Fear the cloud: Okay, that verbiage may be overkill, but the VARs said they spend a lot of time educating customers about when and if public cloud computing will really meet their needs. Vendor hype aside, board members said public cloud scenarios run counter to HIPAA and other compliance regulations.

The rule of thumb seems to be: Unless you, the customer,  control the data–encrypted across the wire and in storage–and you control physical access to the servers and storage, you will not be in compliance.

Well-publicized outages including the recent Microsoft-T-mobile Sidekick personal data loss should be a reality check for customers, said George Brown, president of Database Solutions. Customers and the VARs supporting them need to know where what liability issues are involved in cloud-based solutions

Make no mistake: They are all for co-location and other plans to defray costs, but when it comes to regulation, shared infrastructure remains a no-no.

2:  While you’re at it, fear Google: Google’s push into business apps should “make everyone nervous,” said Kevin McDonald, executive vice president of Alvaka Networks

It’s difficult to tell how serious Google is in its myriad projects. “I see them putting up all sorts of windmills, and Microsoft is out there tilting at them all,” McDonald said. In that, Google is doing to Microsoft what Microsoft used to do to every other software maker: Distract competitors with promised but distant releases of software that will do everything better, faster, cheaper. Vars said Microsoft CEO Steve Ballmer is as obsessed with Google as CEOs from Borland, Novell, WordPerfect, Netscape used to be with Microsoft. This does not bode well for the Big M.

3: Watch Cisco like a hawk: The consensus is that the network hardware kingpin is the company to watch when it comes to future acquisitions and forays into new businesses. It is viewed as a competitive threat by many VARs. “I’m a lot more concerned about what John Chambers is up to than with whatever the Microsoft CEO is doing,” said one board member.

Several panelists said there is probably truth in the oft-revived rumor about Cisco buying EMC.

4: Keep your eye on M&A:  But, Cisco isn’t the only potential suitor for EMC. Other VARs said Microsoft or HP could also do that deal even though Microsoft isn’t much in the way of a hardware company and HP has already bought LeftHand Networks and licenses a lot of other storage.

Brocade appears up for grabs, thanks to a recent Wall Street Journal  story citing an unnamed source (probably the investment banker who really, really wants that deal to happen.)

One panelist said Chinese telcom giant Huawei, which tried and failed to buy 3Com, might also be a suitor for Brocade.

5: Don’t equate small with easy:

There is often an inverse relationship between the size of a customer and that customer’s need for IT help. In other words, don’t mistake a small shop with small technology needs. Companies with under 25 people often require the most handholding.

The customer who buys a $1,600 system usually takes up many times the service calls as a larger customer, said  Jill Steinberg, president of Value Computing, Inc.

Bonus lesson: Watch Snoracle: Participants seem to think Oracle will take care of the hardware supply chain it is purchasing along with Sun Microsystems. Many think the merger, when final, may force some of the other deals already mentioned in # 3 and 4.  HP and EMC could be a formidable counterweight to Sun-Oracle, said one board member.