Channel-Lands Rocked

Mid-August is the time of year many of us in Channel-Lands long for throughout the year. Moderate weather, a little time left before school starts for the kids, and everyone taking their foot off the business pedal just enough to get everyone a breather. Things seemed quiet this week until a bomb in the form of a massive surprise acquisition went off. And while unemployment woes and the economy struggles to regain its footing, there’s plenty of good news from IT vendor earnings reports. And there’s a whole lot more.

What’s Up with Intel Buying McAfee?

We’ve been spying an acquisition of McAfee for years, but the best bet was that the suitor would have been Hewlett-Packard, Cisco or Microsoft. The dark horses in this race were IBM and EMC. But no one saw Intel swooping in and hacking McAfee for $8 billion.

CRN called the deal a "blockbuster." In his report, CRN’s Andrew Hickey wrote, "the McAfee deal will help Intel create security software and hardware from a single company that better protects consumers, corporations and governments as billions of devices – as well as the cloud and server infrastructure that they run on – go online."

From The VAR Guy’s perspective, Intel’s purchase of McAfee is more about a growing frustration of having to rely on third-party vendors to secure PCs. He wrote: "Certainly, Intel will continue to work closely with partners like Microsoft and Symantec. But going forward, when it comes to security, the company Intel will trust most is… um... Intel."

However, The VAR Guy’s alter ego MSPmentor sees opportunity in the deal for managed service providers. The combination of McAfee’s managed services offerings through MX Logic and Intel’s vPro program could be a good thing for MSPs. "McAfee’s partner program has suffered from channel conflict over the years. But more recently, Cisco veteran Alex Thurber has delivered channel credibility within the halls of McAfee. Plus, an Intel-led McAfee may remove any lingering doubts about McAfee’s channel commitment."

My take on the Intel-McAfee deal, as I wrote in the Channel Insider Secure Channel blog is it’s about two things: mobility and money. From the technology perspective, it’s about embedding security in the silicon beneath the operating system of any device – PC, tablet or smartphone. Intel needs McAfee’s technology to build the next-generation of mobility and position itself as more than a processor/chip vendor. From a financial perspective, McAfee moves the needle on Intel’s balance sheet. Wall Street loves to see companies with stronger EBITDA statements, and McAfee certain does that for Intel.

Despite Sluggish Economy, Tech Earnings Up

It’s hard escaping the morass of the economic doldrums. This week Americans woke to the news that China was now the world’s second largest economy after surpassing Japan. Punctuating the news was continued talk about the U.S.’s slow economic recovery and potential for a double-dip recession. Despite all that, several channel-friendly technology vendors posted significantly good financial performances.

HP reported third quarter revenue growth of 11.4 percent year over year, bringing its quarterly take to $30.7 billion. As CRN reported, HP attributed its strong showing to improved hardware sales across its broad portfolio. As vote of confidence in itself, HP raised its forecast for the remainder of the year. CRN noted that the sudden departure and ongoing controversy of former CEO Mark Hurd has seemingly little impact on HP’s performance.

Dell, too, reported strong sales and revenues for the last quarter. It saw a 38 percent jump in large enterprise sales, and 50 percent improvements in server, services and mobility sales. Despite strong sales across its portfolio, Dell failed to meet Wall Street profitability expectations.

Distribution giant Tech Data attributed its strong quarterly performance to a focus on select customer and vendors while deemphasizing less-profitable and resource intensive-products and services. As CEO Robert Dutkowsky noted in statement, "This strategy has served us exceptionally well for the last several quarters, significantly improving the quality of our vendor and customer portfolios, delivering select market-share gains, meaningful operating margin expansion, record earnings and industry-leading return on capital employed.

And NetApp marked at 36 percent spike in its quarterly revenue, driven largely by a surge in product sales to enterprises refreshing their data centers and building clouds. As ComputerWorld noted, "NetApp credited much of its growth to expanding its strategic relationships with Microsoft and other partners to offer a greater breadth of public and private cloud computing offerings."

Cloud Momentum

If you have any doubt that the cloud is the wave of the future, read the analysis by Channel Insider’s Nathan Eddy of an AMI report on the adoption cloud computing adoption rate among SMBs. As he said, "The study concluded with the economic situation still in a state of flux particularly across North America and Europe, cloud services are well positioned as a cost-effective strategy that not only reduces costs but also enables greater SMB agility."

Where is the greatest opportunity for VARS serving the SMB market? Productivity and communications applications, of course. And there's a potential problem for Microsoft there. As The VAR Guy reported this week, Microsoft is wrestling with the shift from BPOS to the SaaS versions of Exchange 2010 and SharePoint 2010. The mystery blogger noted that many solution providers already are turning to hosting providers to fill the void with applications Microsoft currently doesn’t offer.

Call the Refs for the Coaches Debate

At Breakaway in San Antonio last week, CompTIA hosted the first Coaches Summit, a gathering of about two dozen of the top trainers and business consultants serving the channel. Organized by Service Leadership’sPaul Dippell, the summit’s goal was to find some common ground among these VAR advisors to promote standards, practices and metrics.

The VAR Guy published a rather ambiguous perspective this week in which he mused whether coaches were a necessity or a waste of time and money. As he said, "The VAR Guy respects many executive coaches but he also thinks the coaching hype is getting a bit loud in the IT channel." His final analysis: "skeptical."

OK, I'll bite. Actually, I did in my CompTIA Connect blog. I'm compelled to agree with The VAR Guy’s skeptical position since there are few standards for what makes a good coach or how their performance should be measured. Nevertheless, I believe everyone needs someone to keep them in check and double check their work. Call them a coach, mentor, spiritual guide or spouse – it really doesn’t matter. Having someone to bounce ideas off, review business opportunities, critique business plans and provide insights into best practices is invaluable to any business of any size.

What do you think? Are coaches necessary or are they a waste of time and money?

Fun Factoid

Anyone who follows my musings on Facebook and Twitter knows that the most often played band on my iPod is Rush. What’s second on the Larry hit parade?

If you want to follow me on Facebook or Twitter, my social name is lmwalsh2112. Feel free to connect.

Well, that’s all the week’s news from Channel-Lands where all the technology works, all the deals are profitable and all of the companies are above average. Share your suggestions and news with me at lmwalsh@the2112group.com.