Staying the Courseor Not
Consistency. In 1996, IBMs then chairman and CEO, Lou Gerstner, set about codifying the rules and the borders between direct sales and sales through the partner channel.
Today, except for some relatively minor modifications, those rules still exist, according to Donn Atkins, general manager of IBMs Global Business Partners.
Ten years is an eternity in the technology industry, and not stepping on too many toes during a period of industry consolidation, channel conflict and strategic shifts is quite an accomplishment.
"IBMs partner strategy is very self-governing," Atkins told me over lunch last week. While there are many consultants out there championing change as the order of the day, I think there is also a lot to be said for consistency.
The relationship between a third-party sales channel and a technology vendor is only as good as the trust that can be established. The only way to establish trust is to lay out a plan for what you are going to do and then do it.
IBM, often viewed as the home of the blue-suit direct-sales force, has been a consistent force in growing the channel. By mapping out a plan, IBM also stayed away from conflicts with channel partners, by staying away from developing applications and not scooping clients away from their partners once those clients sales mushroom. Why do business consultants always champion change when sometimes it is consistency that counts the most?
Change. But what do you do when you need to make a big change? In 2002, Loudcloud changed its name to Opsware. Loudcloud had everything going for it, including a marquee founder name in Marc Andreessen, first-rate funding sources and an IPO that raised $150 million. The only thing it didnt have was customers for its managed hosting business.
Last week, I caught up with Ben Horowitz, president and CEO of Opsware, which will probably see $60 million in revenues this year in the business of helping companies manage their servers, ranging from 500 to 20,000 or more. The more heterogeneous those boxes become, and the faster that server farms built on standard architectures can grow, the greater the need for products such as Opswares to manage those systems.
What happened to Loudclouds original plan? "A bad market always beats a good team," Horowitz told me. He added that a big company shift has to be driven from the top, by a CEO willing to stop, change direction and lead the charge to a better revenue opportunity. Opsware is not in the hot Google-type pack, but it now offers a solid service that lots of enterprise companies require. When a big change is needed, dont make little course corrections.
Consistent change. Remember those independent application server companies? NetDynamics, Kiva, WebLogic and several others found a technology niche in delivering applications to the then-emerging Web and were soon swallowed up in acquisitions. What those products did in proprietary formats is now morphing into an architecture built around standards.
One of those companies now emerging, ActiveGrid (in San Francisco, of course), has its roots in the application server space.
Peter Yared, founder and CEO of ActiveGrid, was the chief technology officer of NetDynamics and stayed for several years with Sun after that company acquired NetDynamics.
So what is ActiveGrid doing? Think about an application server built around LAMP (Linux, Apache, MySQL and the Pas in PHP, Perl or Pythonof your choice). "We saw an opportunity by adding a lot of enterprise and service-oriented features on top of the LAMP stack," Yared said in a phone conversation.
The consistent idea of an application server that can scale and run at the enterprise level is merged with the ability to change the underlying technology as standards evolve. Perhaps it is at that intersection of consistency and change where the best new ideas evolve.
eWEEK magazine editor in chief Eric Lundquist can be reached at firstname.lastname@example.org.
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