MARKET RESEARCH.

The Internet Is Channel Partners' Friend, IDC Report Insists

Despite many predictions to the contrary, the Internet will work as a "powerful ally rather than a decimating nemesis" for channel partners, predicts IT market watcher International Data Corp. As companies move their strategic operations online, IDC says channel partners will see their resources increase.

"Because of the Internet's growing role in commerce, it is often thought that there is increasingly less room for channel partners and other types of intermediaries. But to say the middleman will disappear altogether is unrealistic," says Chris Silva, an analyst with IDC's Internet and eCommerce Strategies research program. "It is more accurate to say the role of the middleman will change over time, focusing perhaps less on the core product being sold and more on the ancillary benefits that the vendor has to offer -- such as expert support and product information -- and aftermarket concerns, such as repairs and add-on sales."

According to IDC, Cisco Systems, Compaq Computer, IBM, and Nortel Networks all have Web sites that were specifically developed to help support their channel partners. Features of these sites include online account status information, Net-to-phone contextual support, pricing/quoting features, collaboration forums, and a function that matches partners with aftermarket customers.

The vendors report most of their channel partners are enthusiastic about using the Web sites and often request additional functionality. "The vendors tell IDC that their channel partners are quickly becoming accustomed to the increased functionality and productivity that they experience and want more to be developed," Silva says.

RAID Sales Continue To Rise, Topping $14 Billion In 1999

The market for disk drive arrays is continuing the rapid growth pattern established throughout the 1990s, but some segments of the market are clearly more prosperous than others. Shipments of disk drive arrays popularly known as RAID ("Redundant Array of Independent Disks") are dominated by the broad open systems market, which produced 73.3 percent of the industry's 1998 sales revenues, according to a new DISK/TREND report on disk drive arrays.

Over 1.3 million of the network/midrange arrays were shipped in 1998, with 2002 shipments forecasted to reach almost 2.2 million arrays, growing to 87.4 percent of the overall array sales revenue total for 2002. Traditional mainframe disk drive arrays are not expected to do nearly as well, with the share for mainframe arrays sales revenues declining from 25.6 percent in 1998 to 12.0 percent in 2002, at $2.3 billion.

The worldwide market for all types of disk drive arrays topped $12.5 billion in 1998 and 1999's total is expected to be well over $14 billion. By 2002 sales revenues are projected to reach $19.8 billion, an average annual increase for the 1999-2002 period of 12.1 percent. Other highlights from the 1999 DISK/TREND Report on disk drive arrays:

* Disk drive arrays are sold in several product forms, including complete subsystems with disk drives, individual array controller boards, and software array products. Sales of complete array subsystems, at relatively high prices, generated 94.5 percent of the overall 1998 total array sales revenue, but only 41.3 percent of total unit shipments. Array controller boards, used by system manufacturers, integrators and do-it-yourselfers to assemble complete array subsystems, claimed 49.2 percent of the 1998 array total, but are destined to gradually decline as some arrays designed for PC applications start to use array chip sets mounted on system motherboards. Software array products held 9.6 percent of the 1998 total, mostly in RAID-1, or mirrored disk, applications.

* As the price per megabyte for high-end disk drives decreases rapidly, there is a major impact on sales revenues for mainframe computer disk drive arrays, which tend to use a large number of drives. 1998 sales revenues for mainframe system arrays were $3.2 billion, but the impact of drive pricing, combined with a gradual decline in mainframe array shipments, will lower the 2002 sales revenue total to $2.4 billion.

* DISK/TREND's list of manufacturers which make RAID controller boards, software products, or assemble complete subsystems peaked in 1995 with 179 companies, and has declined to 115 in 1999. The disk drive array business is growing at an impressive rate, but the environment is tough on manufacturers which do not secure a significant market share. The 1998 worldwide array sales revenue leaders have remained the same for several years, including IBM, Compaq Computer and EMC. 91.6 percent of the worldwide array sales revenue total was produced by companies headquartered in the US, and 72.2 percent of the array manufacturers are US companies.

Elec. Education & Training Technology Growing At 22.7 Percent AAGR 

According to a new Business Communications Co. Inc. study entitled Electronic Education and Training Technology Business, in 1999 spending on electronic educational and training technology will account for 2.3 percent of the total $743 billion spent on education and training on all levels. This total includes spending on physical plant, teaching and staff, administration, health, food, recreation, transportation and school supplies. Growing at an average annual growth rate of 22.7 percent between 1999 and 2004, expenditures for electronic education technology are expected to rise to $48 billion by 2004, accounting for nearly five percent of the total $1 trillion devoted to education.

Corporate training technology expenditures will take up the largest portion of total education technology spending in 2004 (35 percent), followed closely by K-12 institutions, which will account for 34.4 percent of projected spending totals. Post-secondary education technology spending will make up 27.14 percent of projected totals, with military and other government technology training expenditures accounting for 3.3 percent of the totals.

By the year 2004 networking and telecommunications will be the largest product category of educational technology spending, eclipsing educational hardware, which has historically led educational technology budgets. Distance Learning applications will be the third largest product category, moving ahead of software (the fourth largest category), and consulting and technical training.

Public institutions in all sectors are expected to account for 41.8 percent or $20.07 billion of total expenditures in 2004, while spending on private institutions, including corporations, passes 58.2 percent of totals, or $27.92 billion.

As educational institutions move forward from the 1990s into a new decade and new century, the key question they face, says the report, is no longer whether to employ new electronic educational and training technologies, but which ones to employ, and where and how to do so most effectively.