Channel 'modestly positive' for 2006

By Ann Silverthorn

—A survey of 50 VARs, conducted by the Robert W Baird Ltd. investment research firm, confirmed that Q4 2005 reflected "reasonably healthy" VAR revenues. The survey also suggests sound prospects for modest growth in 2006.

Baird analysts report that Q4 2005 found about half of resellers "on plan," 34% "above plan," and 18% "below plan." Looking ahead to 2006, 86% of the resellers expect their growth to exceed 5% (with 34% predicting year-over-year growth of more than 15%), with only 14% expecting flat results.

As for vendors' prospects in the channel, Network Appliance, IBM, and EMC are expected to be the top beneficiaries of incremental spending by VARs in 2006. For mindshare, NetApp scored the highest, followed by IBM and EMC.

Regarding the OEM deal between IBM and NetApp, the report suggests that resellers have a positive view of the relationship. Nearly 60% of the survey respondents believe that incremental sales will result from the relationship, and none of the respondents expect market share losses because of the deal.

In addition, reseller views of the Sun/StorageTek merger seem to be improving, with no respondents considering the move as a "major negative," compared to the 8% that gave that response in Q305.

Resellers surveyed consider IBM and Hitachi the leaders in "channel friendliness." EMC remained in the middle of the pack after suffering a drop in Q3 2005. All of the vendor scores were down slightly. Baird analysts speculate this might be the result of a general industry shift of vendors' strategies away from the channel.

This article was originally published on January 03, 2006