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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Night Writer who wrote (78766)	2/26/2000 6:15:00 PM
From: Night Writer	Read Replies (1) \| Respond to of 97611

Cisco Honors Channel Expertise Feb. 25, 2000 (Computer Reseller News - CMP via COMTEX) -- Cisco Systems has a simple formula for success: Don't pick the wrong enemy, pick the right friends. In case you haven't noticed, most PC vendors have hit hard times. This comes after years of dubbing Dell the bogeyman and now emulating the Dell direct model. Sure, they've tried to play a game of semantics with the channel. Compaq, for one, has said it will take more of its business direct but will include the channel as part of the equation whenever possible. In other words, be direct but not be direct. Many OEMs are even taking the next step of investing in or buying their distribution or integration partners. While this may signal that vendors covet the channel's expertise, it also creates potential conflicts with OEMs' remaining channel partners. Cisco Chief Executive and President John Chambers said he will buy 20 to 25 companies this year, but he won't invest in his channels because of this conflict issue. Cisco has never tried to look or act direct. It has cast its fate with the channel, and the channel and Cisco have benefited handsomely. In Las Vegas last week, Cisco executives told some 2,100 worldwide solution providers at its Partner Summit 2000 that 80 percent of its business went through the channel last year, up from 50 percent in 1997. With fiscal 1999 revenue totaling just more than $12 billion, that's a fivefold increase in channel-related sales since 1997. What's more, Cisco has no intention of scrapping its winning formula. Rick Justice, senior vice president of worldwide field operations at the vendor, told solution providers he has no intention of hiring an army of people to deliver Cisco solutions because "we wouldn't be any good at it. We'll rely on you instead." That is because Justice and other Cisco executives understand the new e-commerce alchemy. Vendors must create devices that collectively must be sold as systems by a channel that turns them into solutions. Cisco is so attuned to this tenet that its fastest-growing partner segment is consultants. Their number grew in the past year to 9,000 from 500. That's 9,000 partners who may not sell Cisco products but influence the sale by recommending Cisco as part of the solution. Cisco's highest-profile consultant, KPMG Consulting, predicts it will influence some $500-million in Cisco product sales this year. So why do these consultants want to partner with a hardware vendor when direct remuneration from the OEM is not part of the equation? Many vendors offering the channel products rather than solutions are struggling to answer that question. But not Cisco. Chambers has his sights set on turning Cisco into a $50 billion company within the next five years. And as ambitious as that goal may be, he says the services opportunities solution providers wrap around Cisco systems are "two to three times" greater than product sales. Cisco gets it. Let's hope more vendors follow Cisco's lead. Tell me what you think. Call me at (715) 282-6561 or send e-mail to czarley@cmp.com. crn.com -0- By: Craig Zarley Copyright 2000 CMP Media Inc. * end of story *

To: Night Writer who wrote (78766)	2/27/2000 5:13:00 AM
From: JDN	Read Replies (1) \| Respond to of 97611

Dear NW: I agree wholeheartedly with the authors comments. When China first threatened after Taiwan made the comment they are no longer part of China I raised that point on a thread. Sad to say, it appears to me that there is no alternative source available. FABS are growing even more expensive and they must have the volume to sustain them. If the Chinese/Taiwan relations continue to deteriorate they could cause what so far Alan Greenspan has been unable to cause, collapse of the Tech market. Its a real concern to me. JDN