The Solution Proposition

To cash in on this lucrative opportunity, vendors need to consider changes to channel program terms and conditions, they said.

"The message that we've got to get across is the economics [moving from product sales to solution sales are significantly changing from a cash flow standpoint," said Don Bell, chairman, president and CEO of storage distributor Bell Microproducts, San Jose, Calif.

For example, he said, many vendors expect 30-day payment from distributors on specific products. Meanwhile, it may take three months to install and test a complicated SAN solution, Bell said.

There also are significant interoperability issues that must be resolved before making a sophisticated solution sale, and vendors must account for that process when working with distributors, Bell added.

"We're in the middle of vendors who want to typically sell products or technologies and customers that buy solutions," said Rick Hamada, president of Avnet Computer Marketing, Tempe, Ariz. "So how we facilitate and help the transformation along the way, whether it's physical or virtual, that's a big value we provide."

Vendors, in conjunction with distributors, have got to look at the entire solutions supply chain and drive "mass customization," said Hamada. He added that when it comes to "who's best to do the needs analysis and engineer the solution and then turn that into a set of product specifications and configurations and then who's best to assemble that, integrate that, load it, etc. . . . those are the choices that are made all the way up and down the chain. And we provide, I think, a valuable role, but it's still a customer-by-customer situation."

John Paget, president and CEO of Boulder, Colo.-based GE Access, said his company attempted to mass-produce preconfigured bundled solutions, and it didn't work. As a result, GE Access has invested in more engineers with experience in multivendor solutions, he said.

"There's some advantage that we have that a manufacturer doesn't have when you get to the support standpoint," said Paget. "Our technical support engineers across the distribution channel are used to working in an entire [multivendor environment."

Vendors such as Sun Microsystems may know everything about a specific midrange system, but their technical personnel may not be able to handle questions about how that system works with Veritas Software backup technology, an Oracle9i database and a Hitachi Data Systems storage product, said Paget. "That is a value that the manufacturers individually have yet to fully understand," he said.

The move toward solutions across the channel has prompted more ISVs to evaluate distribution partners, said Paget. "What we are finding is that a lot of ISVs that went away from the channel a few years ago all of a sudden are coming back to the channel, saying, 'Gee, we've finally figured out that no one wants to buy just our stuff. They want to buy the entire environment,' " he said. "And that does put you into a more customized approach, a more one-on-one type of approach."

Mike Long, president of Arrow Electronics' North American Computer Products group, Englewood, Colo., said he is seeing "more manufacturers cohabitating together, and to me that's the first time that they're realizing some of the customer buying habits that exist. It's not a sort of 'open-the-floodgates' activity, but I'm seeing them experimenting with certain types of products."

Evidence of that experimentation includes Arrow Electronics North American Computer Products group's first multivendor enterprise storage lab, which opened in April. The Universal Enterprise Storage Lab will be run by Arrow's Enterprise Storage Solutions unit, and it includes resources from almost 20 manufacturers to replicate end-user environments.

Bob Bailey, senior vice president of Pioneer-Standard Electronics, Cleveland, said that ultimately the solution provider is responsible for making sure that multivendor products work together and that a multivendor solution has been properly tested to work in a specific customer environment. "That's one of the values of the people that are providing the services: making it work for the customer," he said.