Is this Internet really a threat to the traditional dealer channel?
That was one of the questions at the IBM's Partnerworld conference held in February in San Diego, at which IDC analyst Janet Waxman told the audience of resellers and independent software vendors that the Internet presented an opportunity for them all. `If used correctly, the Internet will strengthen vendors' relationships with channel partners and create supply chain efficiencies,' she said.
According to Waxman, end users, particularly enterprise customers, would continue to use indirect channels, especially when a project was mission critical or complex, where time to market was a key issue, when it was a large heterogeneous installation or where a location was particularly remote from head office.
Waxman added that her research, conducted among a number of end users and 20 large channel players, revealed a strong consensus on exactly what opportunities the Internet presented for the channel.
These included the ability of dealers to add value, and the fact that it levels the playing field by expanding reach to a larger audience.
Microsoft readies for rentware market
At a press event held in London in early February, Microsoft revealed it is working with Compaq and Esoft Global on a new `rentware' generation of software called Applications2GO.
The idea behind Applications2GO is that Microsoft and its partners anticipate a major change in the way that the IT industry deploys and supports software applications.
Currently, Microsoft says, many organisations purchase a license for their software, which they then install on a group of machines within their offices.
In the future, the software giant says, organisations will move to a software rental model, paying a set amount of money for rental and support of a package on a per-user, per-month basis.
The Applications2CO consortium says that RentWare can be installed on either a LAN or WAN basis, embracing the Internet where possible, with organisations electing to run their applications on a remote server - hosted by a third-party company - using Internet slave terminals on user's desks.
Microsoft is already exploring this concept with Internet access to Windows 2000 applications, but the plan with Compaq and Esoft Global goes much further, moving all three partners firmly into the application service provision (ASP) marketplace.
Compaq's plan is to offer its hardware for the RentWare services to run on, while Microsoft is planning to diversify away from its traditional operating system and license-based applications software base over to the RentWare platform.
Esoft Global meanwhile, is billed as Europe's first Internet ASP and, as such, will act as as the "glue" to hold the services together.
What's interesting about the rentware concept is that Microsoft freely admits that, until businesses start to get always-on connections into the Internet, conventional software licensing will be the norm.
Even what that happens, Microsoft says it will still sell mainly through its dealer channel, since it doesn't have the resources to `hand hold' business customers. Nor does Compaq, for that matter.
This has to be good news for dealers, as it opens up the possibility of renting hardware to business customers as part of the deal. Cutting away the capital costs of buying PCs and switching to leasing/rental deals makes for a steady flow of income for the reseller business.
For more on the Applications2GO concept, have a look at the consortium's Web site at www.applications2go.com.
Pre-Y2K IT spending reductions a myth, says IDC
A report released in February from IDC says that Y2K IT investment slump was a myth in Europe, and debunks the idea.
Instead, the study says, drivers such as e-business, customer relationship management, the Internet, and Wireless Application Protocol (WAP) devices will ensure that IT spending in the Europe, Middle East and Africa region will continue to grow strongly during the next 12 months.
The report, entitled `IDC's EMEA Black Book 2000' predicts that IT growth in the EMEA region will be 9.6 per cent this year, only fractionally down from growth of 9.7 per cent in 1999 and 10 per cent in 1998.
By next year, IDC says, growth will return to 10 per cent, and it will remain in the double digits for the foreseeable future, reaching 11 per cent in 2003.
This growth, the report says, is fuelled by demand for software and services, which is compensating for a temporary slowdown in some hardware segments due to aggressive pricing.
Context's Q4 PC sales figures reveal all
Despite IDC's report on the Y2k and Q4 IT spending, figures just in from Context suggest that UK and European business sales did falter as a result of the Y2K problem.
The market research firm says that small businesses spending declined in Q4, while corporate (larger business) sales remained flat.
Sales of servers and other high-end systems, however, rose, meaning that overall 1999 European growth still healthy at 17 per cent.
Marie-Christine Pygott, Context's analyst, said that sales outlook for 2000 is favourable, as she sees corporates as starting to spend again, and consumer sales will continue to be spurred by cheap Internet access. "We believe this quarters slight drop-off is a temporary one," she said.
Context reports that flat sales to corporate customers, who had completed Y2k-related purchases during the first half of 1999 and postponed further spending to 2000, meant significant losses in market share for big corporate vendors such as Compaq and IBM.
Compaq, although maintaining the top European slot with 1.5 million units shipped, lost more than one percentage point market share, a figure amounting to nearly two percentage points for IBM.
At the top of the computer vendor league tables is Compaq with 15.6 per cent share of European PC unit sales for Q4 1999. And, in a commanding number two slot since the formation of their new company, Fujitsu Siemens during the quarter accounted for 10.8 per cent of PC sales.
In third position was Dell with 7.6 per cent, followed by IBM (7.6 per cent), NEC CI (6.9 per cent) and Hewlett-Packard (6.9 per cent).
Apple, meanwhile, showed a strong come-back during the quarter after overcoming its third quarter backlogs, achieving seventh position in the league table and a year-on-year market growth of 52 per cent.
Novell angers its platinum VARS
Reports suggest that Novell has upset it platinum value added resellers (VARs) in the US with its new Elite scheme, under which the VARs $ 6,250 a quarter are to gain access to Novell's consulting services division.
The idea is that the resellers can then have ready access to service-intensive accounts, with sales opportunities on the training front, as well as in other areas.
The bad news is that service-oriented VARs are excluded from the scheme, for obvious reasons. Now Novell is talking about bring the scheme to Europe. Microsoft, http://www.microsoft.com, http://www.applications2go.com;
IDC, 0044-20-8987-7210 (GB), http://www.idc.com;
Context, 0044-171-343-8033 (GB), http://www.context1.com;
Novell UK, 0044-1344-724312 (GB), http://www.novell.com