You build desktops, workstations, servers, notebooks, and storage systems. You load them up with operating systems, line-of-business applications, virtualization hypervisors, and security suites. You do all of that while trying to make technology an asset, rather than a hard-to-use liability. After all, business owners want to run their businesses. They don’t want to learn the ins and outs of how multi-core processors affect the performance of transactional database software.
They count on you to make technology work for them, and the task isn’t an easy one. Increasingly, enterprise-class technologies are being made available in the SMB space at palatable prices. It’s powerful stuff, but it takes a well-educated, well-connected reseller to tackle new concepts and figure out how to implement them in a unobtrusive way.
It only follows, then, that resellers depend heavily on their relationships in order to succeed. First and foremost, it’s imperative to communicate well with your customers. They’re the ones with the needs you’re addressing. If you can’t figure out their pain points, very little of what you sell is going to make them happy. On the other end of the conversation, though, you also want access to the companies that enable you. These are the organizations that put the ‘V’ in VAR. Without their innovations, you’re left cobbling together disparate technologies blindly.
Fortunately, most of those vendors want you just as much as you want them. In many ways, they bend over backwards to design channel-specific products, pipe in a steady stream of educational information, and structure pricing to make selling solutions worth the VAR's efforts. We had the opportunity to sit down with six channel champions, who make it their mission to empower resellers with the tools needed to compete against much larger organizations. If you’re not plugged into their respective VAR-oriented efforts, the latest programs and initiatives make now a great time to engage.
Building On Better Boards
Channel-Friendly Hardware. Differentiation is important to the servers you sell. Intel makes it easier to set your solutions apart by creating components that can be mixed and matched.You're already familiar with Intel's Enterprise Platforms and Services Division, whether you know it or not. EPSD is responsible for Intel’s server motherboards and systems business. So, when a new processor architecture launches and it’s accompanied by a spate of platforms and enclosures, that’s EPSD working hard in the background to make sure the necessary infrastructure is in place and ready to support the company’s processor business.
Lisa Graff is a vice president in Intel’s Architecture Group and general manager of EPSD. She’s the advocate pushing ever-harder to arm resellers with the components they need to hit the ground running when new CPUs are introduced. “Our entire charter is to be a channel champion,” Graff affirms.
“Our job is to help grow the channel and grow the business there. Of course we want to grow Intel’s microprocessor business and the channel is great for us from that perspective, providing a huge number of customers that sell to incredibly diverse end-users with many different usage models. And what those VARs really need is to be able to have the solutions they can put together. Whether it’s the motherboards, chassis, software, or services—it’s important to have those pieces because, unlike some of Intel’s larger processor customers, the channel doesn’t have the budget to develop their own motherboards, cases, and so on. So, we provide those building blocks to really help the channel grow.”
If you’re building servers using Intel’s hardware, then you’ve very likely noticed EPSD’s efforts ramping up. When the company’s Xeon 5500-series debuted, EPSD unleashed several server- and workstation-oriented boards with optimizations for power, concessions for pedestal enclosures, low-profile features perfect for 1U rack-mounted chassis, and so on. It didn’t stop there, though. A slew of I/O expansion modules effectively multiplied the number of potential configurations, adding additional gigabit Ethernet ports, 10 gigabit connectivity, internal and external SAS, InfiniBand, and hardware-accelerated RAID support through four- and eight-lane PCI Express 2.0 links. To that combination of internal components, EPSD added a number of 1U, 2U, and pedestal enclosures to the mix, each with a blend of fixed- and hot-swap storage options for 3.5” and 2.5” hard drives. Really, it seemed as though Intel left no application wanting for a viable amalgamation of parts.
But Graff says the company’s next-generation processors will be complemented by an even more extensive showing from EPSD. “We have invested tremendously to help the channel over the last couple of years, and all of those products are starting to come to market now. We’re just seeing a stream of them from about a quarter ago and that’ll continue through Q1 of next year. You’ll see a year’s worth of products coming, from hardware to software to services.”
Enabling Communication. Businesses spread across the country need robust tools to keep in touch. Microsoft’s Lync Online is a platform for chat, voice, and video—all based in the cloud.In conjunction with EPSD’s big hardware push, it’s also putting a renewed effort into education. To that end, it’s launching a campaign called Intel Server Edge. “The focus is on giving the channel a competitive edge. There are three major pillars involved: quality, ingenuity, and commitment.”
Now, VARs already working with EPSD know that quality is one of the division’s biggest strengths. Intel’s Graff tells the story of her first days as EPSD’s general manager, where she went on the road to talk to customers. “One of the key things they said not to change was quality. The products are rock-solid, whether they’re deployed into an SMB or on Wall Street, so don’t cut corners to bring down cost.” Another aspect of quality is Intel’s policies. “For example, we do advanced warranty replacement. As soon as a customer has an issue or needs a part replaced, we send out the new component before we get the other one back. That’s unique in the industry and it’s an investment, but it helps resellers stay nimble and quick.”
During the same road trip, resellers told Graff that they loved the product line, but wanted even more selection. “They said they needed two things: more products and products that help us uniquely differentiate in the marketplace.” Hence, the second pillar in Server Edge, ingenuity. As mentioned, EPSD has big plans for its portfolio through 2012 and Graff says it went so far as to triple its board roadmap and design all-new enclosures, too. “We’re really aiming to cover the segments the channel cares about like high-performance computing, embedded appliances, small and medium businesses, storage, cloud computing, and to some extent, workstations. Those are the six key segments, and we now have specialized products just for those markets.”
This should be particularly good news for resellers involved in the storage scene, which Intel readily admits is currently exploding. Increasingly, storage servers are taking advantage of Xeon-based platforms. Graff estimates that, in the past, maybe 20% of storage boxes were using Xeon SKUs. By the end of this year, she guesses the number will be closer to 80%, giving resellers the opportunity to architect subsystems with EPSD’s products. Motherboards designed to satisfy that market will be a huge competitive boon next year.
Building Better Boards. Intel’s Lisa Graff manages the company’s Enterprise Platforms and Services Division, which is busy preparing a number of SKUs to back the next-gen server processors.EPSD’s focus on targeting specific applications is already paying off right now, though. One of Intel’s resellers recently won a bid with the Lawrence Livermore, Sandia, and Los Alamos National Laboratories using Intel’s upcoming HPC-specific platform, scoring the first Sandy Bridge-EP design to go public. Now, when was the last time you heard of a VAR leading the charge with the first design win in the HPC space on a new Intel platform? That’s really pretty unprecedented. But it goes to show how channel-built servers can win some of the largest deals going down.
Graff continues, “The third pillar is commitment. And one of the things customers told us that’s important, to be frank, is not to compete with them. So, we don’t brand their servers with Intel, we only create building blocks, and we let our customers do the integration, their value-add, and we let them take advantage of that strong relationship they have with their customer. We’re really trying to go beyond just hardware. In that regard, we’ve added new software and services.”
According to Graff, resellers (particularly in the U.S.) have been asking for help with a mechanism for providing services. As an example, let’s say you’re a VAR in Chicago and you’re selling to local SMBs and school districts. You can have a team of techs who help manage customers’ software needs remotely and run out for field calls when a power supply or hard drive needs to be replaced. But if you’re trying to grow your business, and you sell to a company based in Chicago with offices all over the country, you’re stuck unable to provide the same degree of service. “We’ve had lots of resellers tell us that they’re missing out on opportunities because those organizations have to go through someone larger than they are to get service nationally, or even regionally. Now, because of where we sell, we already have, for instance, spare parts depots around the world. We have a very robust call center where customers get technical support. The only thing we can’t do is send a truck out to replace a part. So, we put together an entirely new product where we can go that last mile, working with a third-party. That same reseller in Chicago can sell a service contract to its customer that it buys from Intel, and we aggregate our buying power to get a good price.” When the customer has a problem, the reseller can field it. Or, if it’s a Saturday night at midnight, someone at Intel will pick up the phone, diagnose the problem, figure out what needs to be replaced, dispatch a truck, and the next business day it’s fixed. “This gives the channel a new opportunity to sell up and get new business—not only from the revenue from the service contract itself, but potentially hardware revenue they wouldn’t have gotten either. That launched recently, and it’s called Intel On-Site Repair.”
There’s another channel-oriented program that Intel offers that we can’t emphasize enough: the Enabled Solutions Acceleration Alliance. Any reseller who’s a member of the company’s Technology Provider program at the Platinum or Gold levels is able to join as a benefit. Why would you want to? The program gives resellers access to a range of what Intel calls pre-validated configuration guides, and what we’ve historically referred to as recipes. The recipes spell out exactly which components you need in order to build the hardware foundation, first. But then they also introduce you to software with which you might not be familiar, explaining licensing, walking you through installation, providing management guidance, and then ushering you toward the next best resource for learning more.
A True Reseller Advocate. Cindy Bates, vice president U.S. SMB and distribution at Microsoft, is all about making enterprise-class software available to VARs. Take that tech to the cloud or stay on-premise.“The power of the ESAA program is that these are very detailed, technical explanations of how to build the solution, which we have validated,” Graff says. “This isn’t marketing collateral. We have to validate that the whole thing works—that someone can put it together—we’ve done it first. And to give an example like VMware, if you look at the company’s site, your system has to be certified that it runs VMware’s software. Compatible servers are posted online. EPSD has more systems listed than anyone else, and they’re not listed under Intel’s name. Our resellers get the pass-through value there. You might see the same platform listed 50 times by different VARs who get to put their names up because we’ve done the work to get the system certified.”
Intel is really pushing hard for the channel’s cause. As we enter the final straight of 2011 and get ready for the 2012, resellers have lots to look forward to. The company heard feedback from its VAR partners, acted on those comments, and put money behind the resulting ideas. That means you can expect a lot more choice when you pick platforms next year (including motherboards purpose-built for popular applications). You can also extend your reach, selling and servicing customers beyond those who are geographically close thanks to the flexibility of Intel On-Site Repair. All the while, EPSD is keeping its focus on quality and support. Look to Lisa Graff and her team as a channel ally and, if you have feedback you’d like to pass along, don’t hesitate to touch base with your Intel representative.
The Business Of Software
Intel is one of those companies that helps make participating in the channel worthwhile. Microsoft’s role is similarly influential. Most of your customers’ servers, workstations, desktops, and notebooks utilize a Microsoft operating system in addition to an array of its ubiquitous applications. It’s a really good thing, then, that Microsoft is also a reseller ally specifically focused on driving traditionally enterprise-oriented capabilities into the SMB space.
According to Cindy Bates, vice president U.S. SMB and distribution at Microsoft, the company recently pulled together six teams that focused on SMBs in different organizations to create one end-to-end customer, partner, marketing, sales, and technical group, comprising her team. “We wake up every day thinking about how we can help our partners serve their SMB customers,” Bates says. “We are a 98- or 99-percent partner-led business model, so our focus is solely SMBs and the partners who serve them.”
Making The Cloud Real. Office 365 combines Microsoft’s Office suite, SharePoint Online, Exchange Online, and Lync Online in a per-user package that SMBs can actually afford.Bates continues, “In that, we’re also quite lucky because we really see now as an SMB technology revolution—a really pivotal time for the SMB customer because of the enterprise-level technologies available to them. The cloud is an important part of that. Office 365, which launched to general availability in June and is off to a very strong start, is a great example of giving small businesses capabilities that they couldn’t afford previously.”
Of course, Microsoft frames Office 365 as the collaboration and communication suite for companies of any size. For organizations with one to 50 users, the cloud-based suite is available for as little as $6 per month, per user. “The value there is that even a one-person law firm, for instance, can get access to the same level of collaboration and communication capability that someone who works at Microsoft or Goldman Sachs has,” Bates points out. “That includes hosted Exchange, which is business-class email, the full version of Office Professional Plus, SharePoint, and my favorite feature, Lync. Lync is really unified communication in the cloud. When you’re looking at mail, you know where your colleagues are and what they’re doing. You can instant message them, or you can set up video conference calls with multiple people. And now it’s available to companies that previously might not have been able to afford the cost of an on-premise SharePoint or Lync server.”
The fact that Office 365 is affordable for SMBs is great in and of itself. Even better, however, is a low barrier to entry. Software becomes an operating expenditure, as opposed to a capital expenditure, making it easier for some businesses to procure. And Microsoft says the feedback it’s getting from partners indicates that the Office 365 model greatly accelerates the sales cycle and the velocity of sales is increasing. Rather than selling pricey licenses upfront, customers get full functionality, regular updates, and a subscription that lets them add and subtract access at will. Clearly, that’s a win for cash flow-conscious SMBs. But how does the channel win in this situation?
“There is a fee structure for partners,” Bates assures. “VARs get 18% the first year and 6% ongoing for being the partner of record. We do everything we can to make sure customers are attached to partners because we actually see the deal sizes are larger when partners are involved. That forms the foundation of the partner revenue stream. But it’s really only the foundation because then it opens up all of the services that are attached. Particularly with Office 365, the cloud-based versions of the software have parity with the on-premise versions. So, partners with SharePoint skills can go in and talk about business process modeling and workflow using SharePoint and build services around that.”
Stay In Touch. Microsoft’s Gurdeep Singh Pall unveils Lync-supported devices during the software’s launch event in New York. Headsets, cameras, and microphones are all easy upsell opportunities.In addition to products like Office 365 that give SMBs access to the latest productivity-oriented tools, Microsoft is also leveraging the cloud to enhance the channel’s ability to manage customers remotely. Windows Intune is a cloud-based all-in-one PC management solution that comes with a Windows 7 Professional Enterprise Edition upgrade. “Intune is exciting for a couple of different reasons,” according to Microsoft’s Bates. “First, it provides a console for partners to manage all aspects of security, malware, and updates for their customers. In addition, though, for $11 per user per month, you also get that Windows 7 Professional upgrade.” Resellers familiar with the Windows 7 family know that means getting features like BitLocker Drive Encryption for securing data, DirectAccess for intranet connectivity, and Windows XP mode for application compatibility. Bottom line: you enable every feature available in Windows 7, meaning your customers are all standardized on the same version of the software. From there, it’s easy to see the potential for managed services. Microsoft offers the same fee structure for Intune, giving you 18% the first year and 6% thereafter, plus the increased service-based business that comes from introducing SMBs to functionality they’ve never had before.
Both Office 365 and Intune seem to be great opportunities for VARs to reach out to customers who might have balked at big software expenditures in the past. But how does it play into packages like Windows Small Business Server 2011? After all, there’s a fair chance you’re already selling on-premise versions of Exchange, SQL Server, and Office with inclusive operating environments designed for small businesses. The answer, according to Microsoft’s Bates, is that SBS and the cloud easily coexist, appealing to different types of customers. “We want to be the industry leader in choice. Customers get to make the decision. What do they want on-premise? What do they want in the cloud? That differentiates us significantly from the other players in the market pushing one way or the other. But regarding Office 365 and SBS specifically, customers who choose to host their productivity solution in the cloud can use Small Business Server 2011 Essentials, which gives them everything they need.”
High-Speed Storage. Based on SLC memory technology, Toshiba’s MKx001GRZB SSD family is available in capacities of 100, 200, and 400 GB, sustaining up to 500 MB/s reads and 250 MB/s writes.Because SBS 2011 Essentials is tailored to online access, Exchange and SQL Server are not part of the suite. Instead, SMBs get core infrastructure from Server 2008 R2 and those other services from the cloud via solutions like Office 365. Customers who’d rather keep all of that on-premise can still opt for Small Business Server 2011 Standard instead. “Again, it’s all about choice and the VAR’s position as a trusted adviser to be the one that really helping the customer decide on the best solution for them,” Bates points out. “Now, we do see a huge opportunity with SBS. There are one million existing SBS servers out there running older software ready for an upgrade to 2011. Also, though, SBS 2011 Essentials is really
targeted at the businesses with 25 or fewer seats. We see that opening up a huge market for a first server, where another million customers in the U.S. operating LANs without servers can absolutely benefit.”
The allure of Essentials comes into focus when you start talking costs. SBS has always shone through as a fantastic value when compared to the standalone costs of its individual components. However, the Standard SKUs still crests the thousand-dollar mark with five client access licenses. Add another $361 for every five-pack of CALS after that. Small Business Server 2011 Essentials, on the other hand, is priced under $550, accommodates up to 25 users, and does not require CALs at all. A small business that might have been priced out of SBS 2011 Standard can adopt Essentials much more easily, and then pay the $6 per month for each user who needs access to Exchange, SQL, SharePoint, Office, and Lync. It’s a much more flexible, more cost-effective approach that resonates well with any organization previously reluctant to make a big investment into technology.
In order to further incentivize its cloud-oriented efforts, Microsoft recently launched its Cloud Champions Club Program. The program is comprised of three tiers, each with increasingly attractive benefits. Getting in the door isn’t difficult at all—simply be the partner of record for at least six Microsoft Online Services customers in the SMB space with at least 150 seats sold in aggregate. From there, acquire one new customer with 25 seats per quarter to maintain eligibility. “The baseline level gives resellers access to a business development director to build out their cloud practice, says Microsoft’s Bates. “As you ascend the tiers, you add business investment funds, marketing development funds, promotional incentives, and operations support. We are really investing in helping partners make a transition to the cloud.”
Make An Impact With Storage
Covering The Bases. In addition to its exceptionally fast SSDs, Toshiba also offers 3.5” and 2.5” magnetic disks, available at a number of spindle speeds and spanning many capacity points. Even as the cloud becomes increasingly relevant to resellers, the demand for local storage continues to soar as well. From notebooks to desktops to servers and appliances, the channel needs a drive vendor capable of supplying any form factor, multiple performance levels, and (now more than ever) a choice between conventional hard disks and SSDs. Through a combination of strategic acquisitions and in-house R&D, Toshiba’s Storage Device Division is increasingly looking like that one-stop shop for drives.
The company has a long history manufacturing hard drives for the mobile segment, but was also involved in automotive and other more specialized vertical markets. A year and a half ago, however, it purchased Fujitsu, subsequently entering the enterprise business as well. In addition, Toshiba also has its own portfolio of SSDs. “As a result, we become a very unique drive partner,” says Stan Lerch, vice president of OEM and channel sales at Toshiba. “And so, with that effort, we bring a very broad portfolio to our system integrators and resellers. From one source, they have a large bag of products and technologies to help in the development of their own offerings.” Case in point: Toshiba previously wasn’t even involved in the 3.5” nearline storage segment. It entered that space, however, specifically to fill in a gap and create continuity for enterprise-oriented customers looking to go with Toshiba from top to bottom. If you can’t be bothered to engage with two or three different vendors to address storage needs in the same environment (and really, if you don’t have to, why would you?), then Toshiba’s story becomes particularly compelling.
Asked if there is a particular trend Toshiba is noticing across its portfolio, Lerch answers that increasing areal densities and higher capacities are pushing most businesses to 2.5” drives. That’s why, early on, the company made a strategic decision to focus on smaller form-factors. “That is the trend as 3.5” drives hit technology walls. The costs of 2.5” drives are down, increasing value—especially in the enterprise and cloud markets where power and pricing are key.”
In applications where performance is of the utmost priority, Toshiba’s SSDs work well with the 2.5” hard drives. Lerch continues, “People have talked about the demise of rotating storage for a long time, and yet it’s still going strong. There’s always going to be a gap in the cost versus capacity between magnetic storage and solid-state drives, though. But that’s why Toshiba has gotten so involved in the SSD business—we think they’re complementary to each other. As the costs come down on solid-state technology, it will take a place in the market. Toshiba is ready and able to address that position. At the same time, hard drive capacities continue to increase at a faster rate and at a more economical cost per gigabyte. And so, as you see SSDs come down in cost, hard drive capacity will continue climbing. In that way, both devices will remain very complementary moving forward.”
A Single Storage Source. When it comes to channel storage, a broad portfolio can be just as important as performance and reliability, says Stan Lerch, vice president of OEM and channel sales at Toshiba. Of course, smart resellers are using the two types of storage for very different tasks. As we’ve explained in the past, SSDs handle large transactional workloads with aplomb. They can also be used really effectively in a caching role. Hard drives, meanwhile, are reasonably well-suited to less-intensive applications, backup, and storing general user data.
Expect Toshiba’s solid-state lineup to continue gaining traction, though. “One of the most interesting strengths Toshiba has on the SSD side is that we have our own foundries,” Lerch says. We’re one of the few in the world that has our own NAND flash factories, which is different from our competitors who buy from other manufacturers.” Toshiba also enjoys an advantage in that it manufactures its own SSD controllers and writes its own firmware, joining a privileged list of companies that control the quality of their SSDs from end to end. The value there is having one company to call for help with magnetic and solid-state storage, along with the assurance of quick resolution. “If a customer has a problem with a competitor’s SSD product, that competitor has to go through a different chain to get those issues, many of which aren’t under their control, resolved.”
Now, the company’s solid-state drives are unlike competing products with which you might be familiar, so they deserve special attention. Most so-class enterprise-oriented SSDs utilize the SATA interface and employ multi-level cell NAND. That’s not a bad thing, per se. However, there are reasons to advocate the use of higher-availability technologies in 24x7 environments. Toshiba leans on a SAS interface and single-level cell flash. Consequently, there really is no limit to the amount of data you can write to the drive within its lifetime, which is a variable that affects MLC-based SSDs. Optimizations for a 6 Gb/s connection translate into sequential read speeds as high as 510 MB/s and writes of up to 230 MB/s. Random performance is similarly phenomenal: up to 90,000 IOPS in 4 KB reads and 17,000 IOPS in 4 KB writes. A confidence-inspiring five-year warranty represents the sort of coverage that enterprises want to see, too.
The rest of Toshiba’s portfolio consists almost entirely of SAS-based drives, which is great for VARs passionate about selling dependable storage solutions. The company offers 3.5” drives spinning at 7,200, 10,000, and 15,000 RPM, covering everything from nearline disks to the highest-performance hard disks available. Its 2.5” lineup is comprised of 15,000 and 10,000 RPM models able to cram lots of information into an even denser form-factor. The smaller drives boast lower power consumption, despite their aggressive performance. That’s good news for data centers, which enjoy lower energy bills and cooling costs as a result.
Channel-Friendly Solutions
Innovation That Helps VARs. Charles Liang, CEO of Supermicro, is proud of his company’s channel relationship. By emphasizing unique hardware, Supermicro lets resellers focus on new markets.That theme of choice is one that resonates with resellers. Whether you’re talking choices in storage, processors, motherboards, or complete server systems, the ability to differentiate and add value is what gives the channel its strength. Supermicro is perhaps one of the best-known purveyors of choice. Its product lineup includes conventional server and workstation solutions, sure. But the company also gives resellers access to more specialized markets that VARs wouldn’t be able to service otherwise. Blades, high-density configurations, GPU-based compute nodes, storage systems, high-end networking, and embedded segments are all on its radar. Given the breadth of its portfolio, we wanted to know more about how Supermicro sees the channel growing in the future.
“As you know, the market is very competitive,” says Charles Liang, CEO. “SMBs are looking for many different kinds of products. At the same time, resellers are well-versed in technology—they know how things work, inside and out. The result is that they want the most optimized product available for their application, and nobody is willing to roll the dice on second-best. Consequently, our target is set pretty high. So, how does the channel continue enjoying success moving forward? It’s not going to be easy. Even big organizations have a hard time delivering complete solutions that satisfy customer demands. But that’s why we throw the net wide and cover so many segments. The idea is that we leverage our strengths—engineering, design, and production—to create innovative products our channel partners can use to add their own value.”
To that end, a quick look at Supermicro’s home page illustrates Charles’ vision. The company is currently advocating cloud-oriented servers that incorporate eight independent notes in a 3U chassis, a massive 8U mission-critical box built as many as eight 10-core Xeon E7-8800-series processors, a 2U system able to accommodate an astounding six GPUs, high-density blades, and ruggedized low-power embedded servers. Sure, Supermicro sells the conventional 1U, 2U, and pedestal-based systems that resellers are used to deploying in SMB environments. But its push to really take advantage of available rack space is what enables VARs with configurations you won’t find anywhere else.
In Its Own League. The Supermicro SuperChassis 417E16-R1400LPB is one of those products you just won’t find anywhere else. Its 72 2.5” hard drive bays enable massive storage density.Given such diversity, you’d think that this company would have the inside scoop on hot market trends. And indeed it does. Liang continues, “Today, more than ever, customers want to know how to best optimize performance per watt. Paying for power is getting more expensive and ‘green-thinking’ is becoming more prevalent. As you know, the economic downturn hit everyone’s budget. And yet, everyone still wants more powerful hardware. So, performance per dollar is an important metric as well. Performance per square foot matters equally, since rack space is always limited. We take all of those measurements into account as we conceptualize and design channel-friendly products.”
What goes into a server system built with energy efficiency in mind? To begin, you’ll notice that Supermicro’s offerings center on 80 PLUS-certified power supplies. Not just any certification, mind you—they’re employing the very highest Platinum standard, which means at 50% load, the power supplies are at least 94% efficient. Very little power is lost to heat, less cooling is required, and power drawn from the wall is minimized. We’re also seeing a propensity to integrate 2.5” hard drive bays on more and more servers. The more compact storage form factor helps increase density, improving utilization of available space, while cutting the power consumption each drive uses. Moreover, you can easily slide SSDs into those bays, cutting power use even more while bolstering performance significantly. The integration of optimized voltage regulation circuits, dynamic cooling subsystems, and the latest low-voltage processing architectures all combine to help reduce energy footprints.
But Supermicro’s Liang doesn’t just see trend-chasing as the way to grow business. Rather, he emphasizes the importance of capitalizing on core competencies. “The channel used to buy motherboards, chassis, power supplies, memory, and software, integrating each part on their own. That meant they also had to validate their own configurations, possibly rolling the dice on reliability. Today, we see a much more dynamic market flooded with new processors, chipsets, memory, and I/O. It’d be incredibly difficult for a reseller to nail fast time-to-market even without the need for validation work. As important as reliability is, though, staying competitive while still offering the very best product becomes a real challenge. What we want to convey, then, is our position on the reseller’s team. We make it our business to get early access to upcoming hardware so that when it launches, we’re ready with a comprehensive family of integrated, validated solutions ready for the VAR’s customization.”
A Grand Expansion. In an effort to address channel demand, Supermicro is expanding its operation in The Netherlands and Taiwan to support additional volume, validation, and support.Liang’s point is a good one. If we all jumped back and started focusing on pure integration again, it’d be almost impossible to tackle some of the most innovative segments that Supermicro so prominently addresses. By working with a company that builds up the chassis, motherboard, and backplane, adds the right power supplies, then tests with a diverse range of hardware, you’re freed up to pick the processors, memory, storage, and add-in cards. Ideally, that also makes more time available to focus on software, security, management, and other ways you can add value. This is particularly true with regard to the growing momentum behind cloud-based services. That’s a high-availability application; there’s no room for faltering on the hardware end, necessitating a solution capable of performing well 24x7. At the same time, software, infrastructure, and platform as a service all leave the door wide open to new high-margin business opportunities.
Supermicro recently made a significant bet on the channel’s confidence in its products. Faced with a production bottleneck, the company’s manufacturing resources were taxed, limiting the number of customers it could support. So, last year, it invested in a system integration facility in the Netherlands, nearly tripling the size of its warehouse. Additionally, Supermicro is building a 1.5 million square foot business park in Taiwan. Its first building will be finished this year and the second is scheduled for completion early next year, doubling production capacity in time for the next critical Intel platform launch.
Expanding The Ways You Sell
Check Out That Z-Height. Intel’s board team made some radical changes to its DH61AG to fit it in the confines of an all-in-one chassis. As a result, resellers get access to a new segment.We tend to talk about the resellers and the channel as though everyone builds their own solutions. The fact of the matter is that there are plenty of VARs who do really well leaning on branded servers and workstations, building their business on support and maintenance. Some of those branded vendors offer partner incentives to the reseller, returning a percentage of the sale. But, for the most part, if you’re involved in the channel and sell someone else’s hardware, there’s less reason to engage with component vendors.
Intel is trying to change that, though. “What we were looking at when we launched our program this year was to work with more companies, no longer simply providing them with credit for buying Intel components, but work with them regardless of the level of integration they’re using to bring our solutions to market,” says Sharon Alt, North America Channel Sales Director for Intel. “That means components, board-level products, and fully integrated systems.” Intel calls these partners hybrids. They have system builder capabilities, but also provide branded hardware and offer a value-add based on the software stack they sell. A VAR might take that approach to expand its customer base, get to market faster, or create broader solutions.
“Our customers have been asking for this for quite a while,” adds Todd Garrigues, Intel’s North American channel manager. “We’ve looked at it in the past and were able to launch it this year in response to the channel’s input. So now we’re trying to offer more value and be cognizant of the various ways in which they sell Intel, at the same time giving them good messaging to help offer better advice and recommendations to their customers, regardless of whose name is on the box.”
How, exactly, is Intel reaching out to the influencers who don’t necessarily build Intel-based boxes but do sell solutions based on the company’s technology? Alt clarifies, “There are actually a few ways. First, what we’re doing is increasing the overall content that we have relative to our program—we’re adding a training element. Part of the program has training requirements that take into account both Intel silicon technology awareness and solutions-oriented training.” Digital signage is a perfect example. Garrigues’ team is putting a particular effort into arming channel partners with more education on this very PC-like vertical, allowing them to expand and address a new market. Digital security is another segment rife with opportunity, as is point-of-sale. “Of course, we also offer Flex points based on a provider’s focus with Intel products,” Alt continues. “But the program points are no longer limited to VARs purchasing Intel components. If you purchase other Intel-based solutions, you’re also able to get recognition and support for them. We’re really trying to move from a components-based enablement program to a solutions-based program using our training, content, and rewards systems.”
Program Perks For VARs. Sharon Alt, North America Channel Sales Director for Intel, says that channel partners can now receive benefits for selling branded machines based on Intel hardware.Now, the company’s shift from promoting Intel parts to including solutions based on its technology isn’t coincidental. The pursuit of helping resellers find new customers and revenue streams led Intel down a path to exploring the viability of building PC-like embedded systems. “When we started dabbling with this about a year ago, we quickly realized that the solution itself—the hardware involved, if you will—was very similar to what most of our customers already do,” Garrigues says. “But there is some learning to do to get to that point, depending on the software stack.” And that’s why we’ve seen Intel engineer unique platforms like the low-profile DH61AG and engage with a greater number of application developers. Companies like BSQUARE now make it possible for VARs to access the embedded version of Windows 7. In the same vein, Intel is working with members of its embedded alliance to tie up some of the less familiar aspects of signage, going back to that example, to create a more out-of-the-box experience.
Those relationships are critical to the channel’s success in previously unexplored markets. When Intel goes and syncs up with an ODM manufacturing all-in-one enclosures, for instance, and gets that vendor to standardize component placement and a new Z-height based on one of its boards—that’s a lot of weight in the reseller’s corner, which outright paves the way to compete against tier-ones on their own turf.
Backing The Channel
Smart Management. You don’t want to spend all of your time driving from one site to another. Arming your customers with remote management solutions like Intel’s RMM 4 saves money on service.Isn't it nice to have allies in your corner? Companies like Intel, Microsoft, Supermicro, and Toshiba depend on their channel partners to innovate and sell differentiated solutions. They clearly know that educating and enabling resellers is the way to realize success in familiar markets. But vendors are increasingly looking for ways to empower VARs with the tools they can use to break into new opportunities, too, from diversified channel-specific hardware to cloud-based software and tailored recipes for building solutions in specialized verticals.
To that end, communication is the engine by which these relationships work. Vendors want to know what their resellers need, and we heard several representatives confirm that many of today’s channel programs are the result of feedback. Intel’s extended warranty offering illustrates that purpose well. Previously, three-year coverage was all you could get—and that was standard pretty much throughout the industry. But in environments that demanded provisions for longer-term deployments, any issue after those three years passed had to be eaten by the reseller. Now, Intel sells an additional two-year package on processors, RAID controllers, motherboards, and Modular Server components, which VARs can upsell when it makes sense, making government and education contracts easier to bid on. Consider that yet another reseller need satisfied by a company willing to listen, and another example of customer feedback addressed by vendors eager to see the channel grow.
