Borman: The first priority is a financial priority, and it's to gain market share and have IBM and/or partners mutually profitable. And this is more important than ease of doing business or making sure that our partners view one IBM. Profitability is very important. But look what happened in 2000: The whole industry was oversupplied. The partners suffered in their margins, and our companies all suffered in terms of revenue growth. But look what has happened: Margins are less than they were 10 years ago, and in another 10 years, the margins are going to be less again. The model has to change. These margins are going down.
VB: Is the worst over? Are happy days here again?
Kafkarkou: Two words,cautious optimism. I think there is ample room, ample scope for our partners to provide complete value and be less threatened. The market is also getting more sophisticated. I think that's reflective of [each vendor] becoming more than just a storage or a security or an enterprise management vendor.
Borman: The industry will grow faster in 2004. The enterprise space will grow the slowest; the medium-business space next, and the small-business space the fastest.
Grimes: I have an entirely different approach to the midmarket than I do to the enterprise. There is an entirely different partner community. The traditional Sun partner doesn't have a cost structure that will allow [it] to chase the midmarket any more than GE has a cost structure that allows [it] to satisfy a volume world.
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