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Apple channel program transforms: How service providers should prepare

With Apple's success reaching all-time highs, the Apple channel program is quietly starting to rebuild itself. Find out what this means for Apple service providers and other networking solution providers, and for product integration.

Apple has toppled the competition with its consumer electronics, and it looks as if the company is reviving its long-dormant channel program to tackle the corporate market.

Until a few months ago, information on Apple's channel was difficult to find. The only information that could be found outlined Apple certifications for resellers. But now, Apple has a site dedicated to its channel program, including a graphical channel breakdown of consultants, resellers, VARs and service providers, and direct links to solution providers that want to apply to be partners. Because there was no site before, it's hard to tell whether this newly transparent information is a change to Apple's channel program.

Apple did not respond to several requests for comment.

Apple channel program: Tentative rebuild?

Apple once had a booming VAR channel in the K-12 market, but it faltered in recent years, especially as Apple conquered the retail market with its iPhone and recent iPad. Apple's channel program has existed since then, but has mostly flown under the radar. That started to change in the last few months, perhaps in response to the rising demand from iPhone users who wanted to access their corporate email accounts. While as far as we can tell there haven't been many major changes to Apple's channel program, there have been some, albeit subtle ones.

Bob Young Jr., president of Apple reseller Computer Tree in Winston-Salem, N.C, noted a change in the sales model: "Apple has greatly reduced their direct sales staff," he said. "Apple went from looking at 15,000 accounts to targeting a customer list of 300 accounts. And within that 300, if the customer wants to work with the resellers, the direct sales guy has the ability to make that happen. So our old customers, who had gone to direct sales from Apple, are starting to buy from us again."

Michael Oh, founder and president of Boston-based Mac solution provider Tech Superpowers, has a few ideas as to why Apple would be making this change. Most people buy their Apple goods from Apple stores, the sterile white consumer hotspots usually found in trendy neighborhoods or malls.

...while the retail stores can do a lot, [Apple] needs to present the channel in a favorable light and work with them to be partners in bringing Apple to business customers.
Michael Oh
Tech Superpowers

"But if they need someone to go on-site and get something done, whether it be something as basic as an IT assessment or switching from Macs to PCs, Apple stores struggle to do it," Oh said. "They don't have anyone who can go on-site with this kind of experience. I think that Apple is realizing that without [the channel], it's going to be very hard for businesspeople to see that Apple has depth as a corporation serving businesspeople as well as consumers."

It's important to note that, structurally, the channel program hasn't changed. Oh said that he hasn't received any kind of notification that Apple is planning any major channel structural overhauls.

"The changes that are happening may be the tip of the iceberg," he said. "Right now, Apple is realizing how the market is for its customers, and that while the retail stores can do a lot, [Apple] needs to present the channel in a favorable light and work with them to be partners in bringing Apple to business customers."

Offering Apple products for business: Integration is key for Apple service providers

With increased business interest in Apple products, networking solution providers are finding themselves flummoxed by integration problems.

"We see enterprise-level customers who have asked about integrating iPhones, and as an Apple partner, we have experience with that … but we're not Exchange guys," Oh said. "We're not big network infrastructure guys compared to the PC shops, and we can help to a certain degree, but we haven't found ourselves being able to serve every query."

Brian St. James, manager of the services department at Terminal Exchange Systems (TES), a Boston-area technology solution provider that also partners with Apple, agreed. "Exchange is pervasive in the business world," he said. The original iPhone did not have Exchange support, rendering it useless for many business users, while other smartphones have the ability to integrate directly with Exchange. But Apple has been taking this into consideration with the evolution of its iPhone.

"With the second iPhone," St. James said, "Apple added Microsoft Exchange capabilities, so we're seeing a lot of business users go out and use them." The addition of these capabilities certainly boosted consumer interest in using iPhones for business. But this doesn't solve both infrastructure and compatibility woes for other Apple products. When switching from PC to Mac, there are obvious software compatibility issues. For example, many business customers rely on Microsoft Outlook for email and want that kind of product with their Macs.

Much of the business world depends on Windows, and most software companies don't see the ROI in working on Mac compatibility, according to St. James. With only Entourage available to Mac users, a common way around the problem is to use Parallels Desktop for Mac, a desktop virtualization software.

Apple resellers and other networking solution providers need to find a way to have separate operating systems running on Mac, using Parallels, St. James said. Young agrees, having received similar queries from customers.

"We get a lot of requests to integrate Parallels, which runs PC applications on the Mac," Young said. "It's gotten a lot easier to do over the years. We can help them integrate email and address books."

But Apple isn't leaving its resellers out in the cold. According to G. Pathi, general manager of TES, Apple has indicated that it is planning to give its resellers more technical support for network integration.

In the meantime, Apple stores continue to flourish, and the channel program is showing signs of growth. But the stores are absorbing some of the business previously enjoyed by resellers. When discussing the increased interest in Apple computing products, Oh noted that years ago, resellers like Tech Superpowers would be getting the business interest, not the retail stores (including the three-floor retail store that opened up in his neighborhood two years ago, with little notification from Apple).

"Because the retail stores are a huge part of Apple's presence, the stores end up getting a lot of the interest and the business," Oh said. "That's a real paradox for us channel folks because we like to know that the platform is doing well. But if those leads aren't coming to us, it doesn't do us a lot of good. We can create our own marketing programs to try to draw more of those people to us, but if you think about the sheer amount of marketing that Apple has, versus what a company like ours has, it's sort of unlikely that we'll be able to draw much more than a couple of people that we can cherry-pick off."

Let us know what you think about the story; email: Elaine J. Hom, Associate Editor

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