Intel talks channel as new processors roll out

Toronto – As Intel of Canada Ltd. start to make available its Nocona and Grantsdale lines of microprocessors, the subsidiary is bolstering its channel commitment for the thousands of resellers who are members of its partner programs.

David Allen, distribution sales manager North America for

Intel Americas Inc. said the company wants to put “”an arm around all of its partners”” especially with the release of its new chipsets.

On the enterprise, Xeon (code named Nocona) at 3.60 GHz with 800 MHz system bus will be followed by E7520, E7320 chipsets and the Intel IOP332 I/O processor, which will be targeted at servers and workstations.

On the desktop, the code-named Grantsdale line will consist of 925X, 915G and 915P chips. These will be targeted at resellers building gaming and multimedia desktops, home theatre integrators who are installing Dolby 7.1 quality sound, and for IT resellers offering a better storage and data protection performance solution.

Allen pegged Intel Canada’s channel at just under 7,000 resellers. This group accounted for 98 per cent of boxed CPUs sold in the first quarter. This number does not take into account units sold by the 600 non-members who buy from authorized distributors.

Of that 7,000, Intel Canada has 49 premier providers, the subsidiary’s top channel tier. The company also has 1,000 active Intel product dealers in its second tier and the remainder are in a third tier called IT resellers. Allen said there are also a small number of consultants, strategic VARs, ISVs and others whose business is not integrating hardware.

“”We have 42,000 partners in the U.S., and Canada’s activity rate is higher, while the U.S. market is plateauing,”” Allen said.

Doug Cooper, president of Intel Canada, said based on population its resellers here should be doing around eight per cent of the overall business, but instead they’re doing 14 per cent.

Intel Canada’s second tier program, which is targeted mainly at system builders, is free to enter and offers a one to two per cent rebate based on certain volumes. But Allen said the key element of this program is the advanced warranty replacement. It ensures resellers receive chip and motherboard replacements overnight.

The system builder or white box market, whether it is desktop or notebooks, is growing, according to Michelle Warren, a market analyst at Evans Research Corp. in Toronto.

“”Desktops still represents the lion’s share of the market in white boxes, and servers stay the same, while there is a steady increase in notebooks,”” she said. (For more on the Evans report read Evans Report Says It All in CDN This Week)

The reasons for the increase, Warren said, is based on more product availability and the fact customers are more knowledgeable about whitebooks and are willing to accept alternative brands.

Cooper also said price elasticity in the whitebook market has led to more acceptance.

Resellers and corporations are also facing the same challenges, according to Warren.

“”The challenges facing business end-users and IT resellers are similar. The three challenges are cost reduction, improving customer loyalty and improving productivity. Not only are business end-users (and IT resellers) looking to address and minimize these three challenges, but IT resellers can also help end-users through the use of IT tools, such as PCs, to help improve productivity and reduce costs. Through these practices, customer service will be improved, thereby contributing to improved customer loyalty.””

Allen said that Intel is making available a product reservation tool along with demo and evaluation units for system builders. The company is willing to co-sponsor marketing events with systems builders.

“”A hallmark of the Canadian program is buying from resellers in the neighbourhood or local community. Whereas in the U.S. they are much more comfortable buying from catalogues, for example,”” Allen said.

Intel wants WiFi to be another staple of its business in Canada. Cooper wants to bring more resellers to the telecom market and is in negotiations with companies such as Bell Canada and Telus to further that initiative.

“”Broadband is an opportunity for Intel’s IT reseller base. They can sell wireless wide-area capabilities with whitebooks, for example, or a server that comes with broadband or DSL service,”” he said.

Cooper expects to have more details on this plan by the end of next month.

Channel bundles is another way Intel wants to bolster its channel. Recently, the company partnered with Intuit specifically for its Intel product dealer program. Through distribution resellers are able to offer free Intuit software to corporate customers who are pondering refreshing their PCs.

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Jim Love, Chief Content Officer, IT World Canada

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