5 Vendors to watch in 2007

No one in the channel community would be surprised to learn the main vendors to watch in 2007 are Microsoft and Cisco.

But what about companies flying under the radar? Which vendors will come up this year and surprise the channel? Will there be another VMware to hang VAR hats on?

Carmi Levy, senior research analyst for London, Ont.-based Info Tech Research said there really isn’t any one vendor still hiding under the weeds.

But CDN selected five vendors it believes VARs should take a long look at for 2007.

1. Juniper Networks
Juniper Networks opened its doors in 1996 with a mission to build the best router.

According to Tim Lambie, Juniper’s vice-president of Americas International, it was paramount to start with the finest quality product. Customers agreed and this strategy proved effective: Juniper transformed from start-up status 11 years ago to a company with revenues exceeding US$2 billion in 2005.

Recently it was named by Forrester Research as a leading vendor in the SSL virtual private network market.

One of Juniper’s key strengths is its ability to combine a superior product with the best technology for a competitive price. The company also connects business opportunities with its key partners, thereby enabling solution providers to provide the most effective technology solution for the client.

As organizations manage increasingly large amounts of mission-critical information, these solutions enable the customer to focus on its core business, instead of on the nuts and bolts of the IT department, according to the company.

The core go-to-market strategy focuses on specific verticals: service providers, governments, large enterprises, research and education.

Citing Juniper’s execution strategy, Lambie highlights the company’s dedication to building a “solution that outshines the brand.” This unique sales proposition enables the solution provider to customize a solution for its client.

Juniper’s technological developments for 2007 include unified access control (UAC) and application acceleration.

Using UAC when designing the network, solution providers can customize network access through creating a heterogeneous environment. UAC enables plug-and-play access across a mix of third-party solutions, which creates a dynamic and responsive network.

Application acceleration provides opportunity for both customers and solution providers. Responding to users’ demand for real-time information, data access latency is a growing issue. Juniper’s application acceleration tools are “part of the network infrastructure and drive real time enterprise access to applications,” explains Lambie. Instead of offering a patchwork solution of purchasing more bandwidth, service providers can now offer a proactive tool to help with information management.

Juniper continues to circle back to its unique sales proposition: offering high-quality technology at a price-performance that is affordable to most customers.

Its renewed technology focus in an ever-increasingly competitive area, coupled with its commitment to the solution provider channel makes it a top company to watch in 2007.

2. Neoware
Philadelphia-based Neoware Inc. offers unique opportunities within the thin client computing space, with widespread end-user appeal.

Using the solution provider channel as its sales arm, Neoware provides consistent online and in-person support.

At a time when network security is paramount in the minds of IT departments, solution providers look for new avenues to provide excellent product, services and response times. Neoware offers a total software-hardware solution to meet corporate IT demands.

Founded in 1987, Neoware was initially known as Human Design Systems, or HDS, but changed its name and focus in 1992 after Hitachi Data Systems became interested in those initials.

Almost a decade later the organization shifted its business model again, expanding away from hardware to provide a total solution for clients encapsulating software, operating systems, surrounding tools and hardware development. This shift was the “start of tremendous growth,” said Charlie Quinn, Neoware’s director of channel programs for North America and Asia Pacific.

Neoware’s unique sales proposition focuses on building custom solutions for the client using its worldwide resources and built upon open architecture standards. Its successes in the thin client arena started early with a partnership with IBM to service and support IBM’s installed NetVista systems, including software development. A more recent Canadian win was Air Canada. This partnership speaks to Neoware’s ability to “build custom solutions for the customer,” said Quinn.

One of the growing fields of the PC industry is found in the mobile computing segment. In response to this growth opportunity, Neoware introduced its M100 thin client notebook PC.

Notebook PCs are typically vulnerable to theft and hackers. The thin client architecture addresses these issues and the M100 provides a highly secure environment. This product is currently available on the Microsoft platform. A Linux-compatible product will be introduced in the first quarter of 2007.

At the end of January, Neoware announced enhancements to its three-tier partner program, including expanded resources and support for distributors and resellers, with a focus on improving profitability for the channel.

With an expanded partner program, leading thin client technology, and industry recognition, Neoware is on target to grow its business in 2007.

3. Websense
It seems impossible that a company can conduct business for 10 years in the IT industry and not get noticed.

But when McAfee channel czar David Roberts bolted to Websense last year, the channel asked ‘Webwho?’

Websense’s product is Internet access management. The company gives customers the ability to set policies where they wish on the Web.

“There are no Web viruses, e-mail or firewalls,” Leo Cole, vice-president of marketing for Websence points out.

“We do not wait for an attack like anti-virus or firewalls, then react and do something. We scan the Web, about 450 million sites a week, and we find the source of the attack and shut it off at the source,” Cole said.

Among those who see opportunity with the company is Fiaaz Walji, formerly Corel Corp.’s channel manager, and now running WebSense Canada.

Walji wants to build on the success the company has attained in the U.S. He is looking to build a Canadian sales force aimed at government business and the bilingual market in Quebec.

Other target markets for Websense here are banking and small and medium businesses.

The Websense partner program rewards partners for bring in new business and maintaining current customers. It offers double digit margins depending on the account manager, targets, volume incentives, rebates and MDF program, Walji said.

Currently Websense has eight platinum partners, the company’s top tier. Also in that mix are solution providers such as SoftChoice, ASAP and Montreal-based ESI Technologies. There are also telco-based partners including Telus National Systems, Bell Business Solutions and Allstream.

The company is looking to build on its partner network, but only wants solution provider who fit. In particular, it will favour applicants with expertise in security and filtering, Walji said.

On the horizon for Websense is new technology called Information Leek Prevention or ILP. This new technology comes from its recent acquisition of Port Authority.

“This technology with Websense is compelling for high end security resellers,” Cole said.

ILP prevents confidential data or personal information from being leeked out of a company. ILP allows users to look for strings of known data such as bank accounts and SIN numbers and set up policies to allow that data to leave or not.

“Websense keeps the bad guys out, and with Port Authority’s ILP we can keep the good data in the environment,” Cole said.

With record fourth quarter revenues of US$47.3 million, VARs looking to add another vendor should consider Websense.

4. WebEx Communications
When WebEx Communications Inc. was founded in 1996, it worked to help groups of business people to share data or applications such as PowerPoint over the Internet, or to communicate using free tools such as NetMeeting.

Today it has far loftier goals. The company has rolled out new applications based on an increasing number of business processes and it has five lines: WebEx Meeting Centre, for keeping teams coordinated and projects on track; WebEx Sales Centre, for accelerating sales cycles and helping to close more deals; WebEx Event Centre, to maximize the impact of large online events; WebEx Training Centre, to deliver interactive training; and WebEx Support Centre, to support remote users as if they were on-site.

But WebEx recognized a few years ago that its suite of Web collaboration applications could be better – and broader – if it solicited help from others. “We can build new applications, but partners build great applications for vertical markets and they can sometimes penetrate markets faster than we can,” says Colin Smith, director of corporate communications.

The company is also trying to move away from what it has traditionally done, which is plug the ability to collaborate into other applications. It wants to do the reverse: instead of taking its Web Meeting Centre product and putting its capabilities inside those of a CRM package, it would rather create a platform that is collaborative, into which the users can pull their CRM, or other, data. “So instead of a transaction application that is meeting-enabled, I’d rather have a meeting application that has transaction data in it. That’s really an epiphany we’ve had and we’re going out to our partners in vertical markets with this platform.”

“For partners that brings a great opportunity to bring some really significant systems integrator value to their customers. That’s what we’re looking for as far as a big growth engine for WebEx in 2007,” says Gary Reznick, senior director, alliances. WebEx believes that 2007 holds great promise. Business has grown by an average of 23 per cent over the last five years.

5. XenSource
The demand for server virtualization software will accelerate this year, with EMC’s VMWare dominating the market. Microsoft will add a hypervisor to Windows Longhorn server, but probably not until 2008.

In the meantime, VMWare’s only challenger is upstart XenSource, which in December fleshed out its lineup with XenServer, a virtualization solution for Windows for a dual socket server.

The small company is starting to make its mark: Last month Tech Data announced it will be the sole source of preconfigured IBM servers loaded with XenEnterprise, the corporate version of the application for up to 32 sockets.

Microsoft thinks enough of XenSource to become one of its ISVs and is working with the company to ensure Linux operating systems using the Xen hypervisor will work with Longhorn.

But it is EMC that’s in the company’s sights. “Our object is to take out VMWare,” says Simon Crosby, the company’s co-founder and chief technology officer.

VMWare is a “formidable competitor,” he acknowledges.

“But the market is only five per cent penetrated, and I think from OEMs I talk to that’s likely to move up to 10 or 12 per cent this year. So we’re still in the early stages of what is going to be a huge market.”

Based in California, XenSource was founded in 2004 by the creators of the Xen hypervisor – a virtualization engine that can be found in Red Hat and Suse Linux – to commercialize their creation. Last year it released a complete virtualization package for Windows, called XenEnterprise for Windows and Linux guest operating systems, followed by XenServer.

Like all open source efforts, these applications can be downloaded for free. To make money the company sells modestly-priced support exclusively through the channel.

For example, XenServer support costs US$99 a year.

The company has a three-legged strategy: seed the market with the free Xen hypervisor, sell full server suites like XenEnterprise and build an ISV network which will pull customers towards its solutions.

So far it has a single reseller in Canada, Xelerance Corp. of Ottawa. Mike Mersch, XenSource’s North American channel sales manager, hopes to certify nine more by the end of the year. He’s looking for Tier 1 VARs with a virtualization practice aligned with a major server vendor.

Although dated (and unscientific), a 2005 survey of attendees at a Gartner conference is indicative of Xen’s reputation. Thirty-eight per cent of those surveyed expected that by 2009 Microsoft will be their organization’s choice of virtualization, 26 per cent thought their employer will be using Xen and only 15 per cent predicted VMware.

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