By Lawrence M. Walsh,
VARBusiness
VARBusiness, Mon. October 02, 2006
Financially flagging Phoenix Technologies is betting
that dropping its channel program will help the maker of
BIOS and security and backup
firmware applications rise from the ashes. The move,
however, is burning its channel partners.
The company that once dominated the BIOS market has
suffered two consecutive quarters of lower earnings and
its annual revenues dropped more than $20 million from
June 2005 to June 2006. To stem the losses, Phoenix in
early September brought in turnaround specialist Woodson
Hobbs as CEO and president, and just last week hired
Richard Arnold to serve as executive vice president of
strategy and corporate development.
In a letter to partners, Eric Newman, the company's
vice president and general manager of North America and
EMEA operations, outlined in terse terms Phoenix's
precarious position and the need to return the company
to financial stability.
"After a period of diligence on products and
long-term strategy, we have determined that Phoenix will
focus on a vision that expands on our legacy delivery of
quality BIOS and embedded solutions," Newman wrote.
The strategy shift means Phoenix will only support
its OEM and ISV partners. Channel resellers who have
been pushing Phoenix's RecoveryPro and ImageCast
software packages are now without support for their
existing install base.
"These changes will allow Phoenix to focus additional
resources on the 'innovation at the core' mission,"
Newman wrote.
Calls to Phoenix for additional comment were not
returned.
Phoenix only recently launched a push to recruit
partners in the B2B and public sector channels. The
company made its presence known at recent XChange
events, also operated by the CMP Channel Group, and won
several awards. As recently as 15 days ago, Phoenix
issued a press release for its CMP XChange XCellence
Award as for Most Innovative Technology Category
stating, "Phoenix continues to impress channel
partners."
The company's partners are anything but impressed.
News of the Trusted Partner Network's cancellation
caught many off guard. Worse, the newly recruited
partners are left holding the bag for supporting scores
of Phoenix licenses.
"What's happening now? I've got customers that we
have sold maintenance agreements to that aren't going to
be supported. I'm going to support it in house," said Mark
Brown, CEO of Total Networking Solutions, a New
Jersey-based Phoenix reseller.
Brown was one of several solution providers recruited
by Phoenix last spring. Since joining the Trusted
Partner Network last March, he's invested more than
$40,000 in training and certification, and retooled his
white-box business to include versions of RecoveryPro
standard. He's sold more than 200 RecoveryPro and
ImageCast to date.
"All the stuff they sold us on has gone out the
window," Brown said.
As of this posting, Phoenix's partner Web site was
still live and providing information on finding and
becoming a Phoenix reseller. One of the tenants it
proudly lists as a reason for becoming a Phoenix partner
is "Channel Commitment: maintain confidence in a
partnership with Phoenix; the channel-only sales model
is dedicated to helping partners achieve their goals."
Phoenix is one of the oldest PC support vendors in
the business, and once claimed to be the largest
firmware supplier to OEMs. In recent years, it has
attempt to break out beyond its core by adopting
innovative security and disaster recovery applications
on the firmware level.
What the future holds for the company is difficult to
say, however the appointment of Hobbs may provide some
clues. Hobbs has a long history of leading troubled
companies—including FaceTime, Tradenable, BigBook and
Intellisync—either to liquidation or acquisition.
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