Chip giant Intel is feeling bullish as 2007 draws to a close, and is predicting a prosperous future with its channel in the coming year.
The vendor held its Multiply Your Innovations partner conference at the Oxfordshire-based Heythrop Park Hotel recently. The venue also had an adjoining exhibition hall where Intel’s vendor partners and channel partners were able to mingle and conduct business, and a racing simulator was located in the main hall to encourage delegates to let off steam.
Intel used the conference to stress the message to a wider audience of channel partners that the opportunities around gaming, mobility and managed services were set to rocket in 2008.
It has high hopes for its recently unveiled 45 nanometre (nm) technology, which the vendor claims will help partners looking to push a more environmentally friendly sell to their customers, by reducing energy consumption and, ultimately, cutting the cost of running an IT infrastructure.
In his keynote speech, Graham Palmer, UK and Ireland managing director at Intel, said: “The theme of this event is really around the changes facing the UK IT sector and how that poses both an opportunity and a challenge for us. We are looking at the notebook, mobile, desktop and server environment and are working with partners from both a software and solutions perspective. More than 20 per cent of all Intel’s business is through the channel, so it is a vitally important part of our strategy.”
Palmer said Intel has a strong technology roadmap, particularly to cater for the continuing growth in mobile computing.
“We know that mobile is a challenge - but there is the opportunity for more growth. We are looking at how to drive the market forward with our partners,” he said. “Our quad-core processors are appealing to a gaming-hungry customer base and that market is still growing. The overall market is $80bn (£39bn) larger than it was four years ago.”
He said Intel’s UK and Ireland partners were embracing the innovation on offer. “Our 45nm technology, for delivery on both dual- and quad-core processors, use less electricity. Although many end users face the problem of managing their business flexibly, it is also about energy consumption,” he added.
Palmer claimed that 10 per cent of overall IT spend in the UK and Ireland is used to power organisations’ IT at the moment.
“Within the next five years that figure will increase to between 40 and 50 per cent of the IT budget being spent on purely running an IT infrastructure,” he said. “Customers want energy-efficient computing and want to cut the cost of running their IT infrastructure. Reducing energy consumption is a huge area for us at the moment,” he added.
“Intel is part of the Climate Savers initiative supported by the World Wildlife Fund, which is aiming to reduce overall power consumption by 50 per cent by 2010. That equates to 11 million cars or 10 coal power stations. We are also working with Intellect on how to reduce power consumption.”
Palmer added the vendor has high hopes for its vPro desktop client - which is also focused on reducing energy consumption, while increasing performance. It also gives partners the ability to remotely manage these platforms, which in turn brings a new revenue stream to the channel coffers, he said.
“The opportunity that our partners are bringing to the market allows them to get a very different revenue stream from their customers,” Palmer said. “Our partners are increasingly able to have a relationship based on monthly revenue, in terms of remotely managing desktop and notebooks. Our technology is allowing partners to have a much better remote capability than before to reduce customer site visits and help improve the overall offering to their customers.”
“If the central processing unit (CPU) is the brain, the chip is the nervous system, and that is why Intel is building managed service capabilties into its technology to allow remote assistance,” added Palmer.
“We have also added this technology to our notebook products,” he said, adding vPro is not only aimed at larger firms, but is proving just as attractive to SMEs.
“End users do not want to be struggling with managing their technology - they want to be running their business. If we offer them services and solutions around that, they can focus on their core business.”
One of Intel’s key partners at the event was recently relaunched gaming PC brand - Commodore. The PC maker is pushing the message of personalising the PC - offering custom-built gaming PCs, decorated in a design chosen by the end user and powered by Intel Core 2 Extreme quad-core processors.
Aidan Donnelly, director of business development at Commodore, said: “The whole PC market is becoming mainstream. It is now something that sits in the sitting room as well as on the desktop, and a lot of customers are building it as a design piece within their house. Some are even building the house around the PC. We only work with four partners - Intel, Asus, Corsair and nVidia - and we are seeing tremendous success in the market.”
Donnelly said the brand is seeing a huge response due to the nostalgia factor, but it is also attracting new gamers on board.
“We’re putting a lot of money into the brand and being careful about how we position it. We have to be careful not to offend the old Commodore 64 community, but still reel in new customers.”
However, Intel’s core system builder channel market has taken a battering recently with long-established players, such as Evesham, bowing out of the game due to trading pressures.
Gerald Grattoni, OEM and channel sales manager for Intel UK and Ireland, said the vendor keeps a close eye on its channel. “We have seen a fair bit of consolidation in the system builder industry recently and I think some companies have had more difficulties than others,” he said. “Companies that have been able to adapt and evolve their business model have been able to survive.”
Grattoni said that 18 months ago, Intel revamped its channel model, asking all partners to sign up once more to ensure a fair channel.
“We are very committed to the success of the white-box business. We are helping our channel players find a market and are bringing new server platforms to market targeted at the SME to help them evolve their business with vPro,” he said.
However, Grattoni said the vendor was also taking a broader view of the channel. “Before, we pretty much worked with white-box builders; now when we define the channel we are talking about system integrators, VARs and distributors. We want to make sure that whatever they build, for whatever market, that we provide the best value for their customer base.”
Ian Jones, corporate reseller director UK and Ireland at Intel, said the firm was seeing increased demand from its corporate reseller base.
“Intel has focused a big part of the business on engaging with the corporate community. We are growing the business through the channel via service-attach and solution-attach. There is a lot of margin pressure on the box, and the relevance for the channel is about adding value when delivering a product to the customer.”
Intel’s partners were also positive about Intel’s channel strategy. Bryn Morgan, commercial director of VAR Virtual IT, which provides a fully managed service for smaller companies of between 10 to 100 users, said Intel’s managed services push was a great help to his business.
“There is a difference between the technology and service message. The downtime is very difficult to quantify and, in the SME sector, the technology is not a key element - how we implement it is. Firms want the cost of their IT reduced and do not want to be hit with the cost of downtime as well.”
Morgan said being a partner of Intel was a plus when dealing with new customers. “Intel has a high level of contact with its partners, and being able to engage on that level is a great business boost. We do see ourselves as a true partner and it
certainly helps us when we speak to new clients - if we say we are a partner of Intel, it gives us that extra value to a customer,” he said.
Damien Harold, managing director of partner Xact IT Marketing, said: “It is so interesting to see Intel coming to the channel and it is fantastic that Intel sees the channel as an area with which it wants to work. It has a good bunch of resellers in the mix and, most importantly, Intel really fits what we are talking about as a partner.”
Mark Kinsell, sales manager of server products at distributor Hammer, said: “The last Intel Channel Conference was one of the best yet - the opportunity to catch up with customers in a more relaxed atmosphere is always invaluable.
“The venue was impressive, as was the service we experienced. We were able to showcase new products and technologies that have already resulted in projects from customers that are new to Hammer. I am looking forward to the next conference and hope it proves as rewarding.”
Intel breaks the seal on second 45nm fab