Channel-Lands: iPad Cannibalizes Notebook Sales

Apple iPads are popping up across the channel, but they won’t be alone. Other PCs are racing to get their tablets out to market. The question is whether tablets will displace PCs. It’s just one of the many issues solution providers and vendors in the channel are wrestling with this week. Beyond tablets, this post from Channel-Lands looks at the benefits of virtualization, increasing demand for custom servers and growing opportunities in professional services.

iPad Cannibalizing Notebook Sales

You know the Apple iPad is hot when it starts appearing on the desks of sportscasters and news reporters as the latest high-tech gadget feeding them words to parrot on television. But are the iPad and its future slate of tablet computers slashing into notebook sales?

CRN’s Zewde Yersawork had an interesting report this week on how the iPad is dampening demand for conventional notebooks. Best Buy noted that it has seen notebook sales fall as much as 50 percent as users pick up iPads.

Technology Business Research says the trend is real. Its recent report says that one-third of users will replace their aging PCs with an iPad or equivalent tablet, and as many as 50 percent will use a tablet as their primary computing device.

CRN reports Apple partners expressing confidence that there’s room in the market for both platforms. TBR says that end-users and businesses will continue using conventional PCs as their primary devices for at least the next three to five years.

However, the trend is increasingly moving toward more portable and user friendly devices. Earlier this week, Dell announced it was creating bundles around its Streak tablet specifically for the healthcare industry. Verizon, Fujitsu, Motorola, Cisco, Toshiba, Hewlett-Packard and Microsoft have tablets available or in the works for both consumer and business use. As TBR states, users want devices with greater portability and easier usability. Some already are calling 2010 the year of the tablet. It might be premature to declare tablets reaching the top of the hill, but they definitely are making the ascent.

Vendors Turning More Services Over to the Channel

Brocade this week became the latest vendor to turn over more of its professional services and support business to channel partners. According to The VAR Guy, Brocade is handing off service and support to partners for all but 250 accounts worldwide in an effort to increase opportunities for solution providers and trim its workload.

This is an increasing trend among vendors looking to expand their professional services reach while decreasing costs. Earlier this year, Symantec did the same thing by all but eliminating its in-house professional services program in favor of a channel-led model. 

While vendors getting out of the professional services business in favor of partners has the potential of opening new lines of business to solution providers, there are some significant barriers to entry. Solution providers looking to pick up this business will be expected to add certifications and capacity, which often don’t come cheap. This means only a few solution providers will be able to take advantage. Likewise, if quality slips, vendors likely will move to retake the services business.

Spiceworks Adds Socialized Management

Spiceworks continues to build its reputation as an innovator by adding People View, a new application in its free IT management and administration toolkit that allows users to stipulate applications and systems-use. The approach is very similar to the way that social networks identify user preferences based on their activities.

According to Channel Insider, People View is available in the latest beta of Spiceworks 5.0. It includes support for managing devices, applications, on-premise accounts and cloud-based resources. Integration with Microsoft Active Directory will make change management based on individual users easier, the company says.

Spiceworks’ approach is addressing the hybrid nature of the evolving computing environment where users are tapping on-premise, device and cloud-based applications and resources. CA Technologies and Novell have released applications and services that provide account management and auditing capabilities for cloud-based applications and resources. Aprigo, a Massachusetts-based startup, also has a new application that allows users to peer into private and public clouds to audit their stored data.

Tapping into Government IT Budgets

One of the bright spots in the sluggish economic landscape is that government IT spending remains robust. The federal government spends about $70 billion a year on IT goods and services, and state and local governments spend about an equal amount. Getting to those budgets is often challenging, even for the most experienced public sector solution provider. Vertical Systems Reseller published a guide to working with the government based on the experience of solution providers. Their advice: customize systems and proposals, look for smaller projects that lead to larger engagements and seek out grants, among other activities. The report is worth reading if you want to get into the government channel.

Demand Healthy for Custom Servers

While demand for PCs is slack, server demand is strong. According to Gartner, worldwide server shipments grew 27 percent in the second quarter and revenue jumped 14 percent. According to Search IT Channel, a large part of that growth is coming from custom servers being built specifically for virtualized environments. In Heather Clancy’s report, Intel said that channel contribution to this growth increased 20 percent year over year.

Healthy demand for commodity and custom X86 servers may be part of the reason VMware is reportedly interested in buying the SuSE division of Novell. Reports surfaced this week that the long rumored sale of Novell to private equity investors is finally coming to fruition. Part of the deal would involve spinning off part of the company to a third-party, and The VAR Guy reports that side deal is with VMware and SuSE. Reasons for VMware’s interest is gaining more ISvs, ganging up on Microsoft and increasing penetration in the data center.

As the Hurd Turns

The hurricane of a drama known as Mark Hurd continues to make headlines as his defection to Oracle is reshaping the competitive landscape and drawing endorsements and condemnation across the industry.

First, Hurd joined the Oracle earnings call to declare the Sun Microsystems division profitable and trending in the right direction. This is the first official indication that Oracle intends to use Hurd to reshape its hardware business. In fact, some have speculated that Oracle’s master plan is for Hurd to rebuild Sun to the point where it can be spun off in an IPO. Now that would create a big pay day for CEO Larry Ellison and Mr. Hurd.

The VAR Guy is reporting that Cisco CEO John Chambers wants to partner with Oracle on the development and marketing of unified computing systems. While the two companies compete in servers and storage, The VAR Guy points out Cisco’s desire to ratchet up the competition with Hewlett-Packard and IBM. A Cisco-Oracle alliance definitely would change the competitive landscape and put pressure on the already beleaguered HP.

Not everyone is singing the praises of Hurd. While Ellison had kind words for IBM this week, signaling desires for a détente, IBM isn’t reciprocating. IBM CEO Sam Palmisano slashed out at Hurd, saying that he hurt HP by cutting R&D spending too deeply. According to the New York Post, Palmisano said that HP is paying a premium for companies such as ArcSight and 3Par because it no longer has the research capacity to compete.

Stay tuned for next week’s installment of “as the Hurd turns.” This drama isn’t going away.

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. If you want to follow me on Facebook or Twitter, feel free to connect. Share your suggestions and news with me at lmwalsh@the2112group.com.