Enterprise Push: Intel Gives Partners A Lift
New incentives added to Channel Co-Op Advertising Program
(URL: crn.com
By Edward F. Moltzen
CRN
New York
12:00 PM EST Wed., Dec. 05, 2001
Working to boost the amount of Intel infrastructure partners push into the marketplace, the chip maker is sweetening a key program it began a year ago to add more incentives and benefits to its centerpiece program for 2002.
A year ago, Intel was staving off an aggressive move by rival Advanced Micro Devices to win over solution providers and systems builders. In a span of six to nine months, AMD gained several points of market share as systems builders took to installing Athlon- and Duron-based infrastructure solutions into accounts, analysts said.
Intel's Dallman: Partners will receive more co-op marketing dollars.
At about the same time, Intel began rolling out a new program,called the Channel Co-Op Advertising Program (CCAP),along with a steady diet of price cuts in the high-end Pentium 4 line.
"We've been more than happy,maybe even thrilled,with the results we're getting," said Steve Dallman, Intel's director of North American channels.
David Chang, president of Houston-based Agama Systems, an Intel Premier Provider, said CCAP offers an added incentive to provide Intel infrastructure into accounts.
"I think Intel is one of the biggest spenders in the whole world on the IT industry," Chang said, adding that the partnership is worth the effort. "One of my product managers spent three to four hours on the Web to learn how to be in the program, so they have a lot of rules to follow. Intel gives a lot of benefits to [Intel Product Dealer] partners."
Intel is expanding CCAP in 2002 to make it more useful and attractive to partners, Dallman said. Intel Product Dealers (IPDs) will receive more co-op marketing dollars, along with greater flexibility in using them, as they roll out more Intel-based solutions into enterprise infrastructure.
"It will allow them to do some direct mail, billboard advertisements, transit [ads] and cinema [ads]," Dallman said.
Intel is bullish that the sweetened marketing incentives will help solution providers stay out in front in the enterprise.
The heightened channel marketing program comes as Intel prepares to roll out its 2.2GHz Pentium 4, and as it maintains a target for hitting the 3GHz level by the end of 2002.
Intel is bullish that the sweetened marketing incentives will help solution providers stay out in front as the company reaches higher into the enterprise with higher-performing technology.
Timing on the program incentives might turn out to be key.
Joanne Evans, president of Net%5CWorks, a Minneapolis-based solution provider and Intel Premier Provider, has been a top booster of Intel's channel program. Now, she said, there are some indications it could come in handy as infrastructure upgrades may start to pick up.
"I just had a guy call me a couple of days ago and say to me, 'All those machines you sold me in '98, we're getting new ones [now],' " she said. "We sold a ton of computers in '99 and 2001, 2002,that's the three-year stretch,when upgrade cycles begin. I think hardware is going to perk up a little after the first of the year."
Intel now needs to ensure partners spend all the market development funds (MDF) for which they've qualified, Dallman said. "All the data is coming back very, very favorably [on the first year of CCAP]," he said. "Over $6 million has been accrued by [partners] to use in the [MDF] program and they haven't spent it all."
In a presentation to financial analysts last month, Intel Executive Vice President Paul Otellini said he expected 40 percent of channel sales out in the fourth quarter of 2001 would be higher-end, Pentium 4 solutions.
"This is not just a channel that ships older and lower-priced technology," he said. "This is a channel that has embraced new technology."
And during Intel's recent history, the channel has been aided by strategic investments,like the expansion of CCAP in 2002, Intel executives said.
"Wherever you see the Intel Inside logo, that's sponsored by Intel," Agama Systems' Chang said.
Meanwhile, in addition to releasing higher clock-speed versions of Pentium 4, Intel is gearing up to begin shipping the next-generation 64-bit microprocessor, McKinley, slated to launch in mid-2002. It will be the first volume ramp of Itanium to move through the solution provider channel.
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