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May 2003

Pivital wins new 3000 sales spot

Firm expands from support to take over authorized HW channel position

Pivital Solutions CEO Steve Suraci hears the tick of a different clock than the one which HP has been counting down for 3000 sales. Less than six months before new HP 3000 sales will end at HP, Pivital is ramping up its efforts as the newest authorized reseller of the servers in North America.

Pivital has taken over the system integrator spot in HP’s 3000 hardware channel that’s being abandoned by Dimension Data. Suraci said that Dimension released much of its 3000-capable integration staff which Pivital was working with, and Pivital saw an opportunity emerging from the situation. It may seem to be late, but Pivital sees its entry as early in the lifespan of the 3000 customer

“Strategically, we know there’s going to be long-term homesteading customers on the HP 3000 out there,” the CEO said. “Even HP is attesting to a quadrant of the market where people will homestead forever. That is a big portion of the customer base which we deal in today.”

The company had built up a practice of offering application and then extending MPE support to customers using the GrowthPower ERP application, moving on in the late 1990s to expand its customer base beyond ERP sites. “We found we were becoming more involved in the other business aspects of these companies,” Suraci said, leading to partnerships with Minisoft and Cognos, for example.

But as of late last year, “we felt we no longer had Dimension Data as an outlet to move 3000 hardware to customers. We needed an outlet to sell hardware and get the deals done.”

National hardware partners couldn’t interest Pivital in becoming part of their folds, and HP was willing to let the 18-person firm with operations across several US states take over the reseller spot from Dimension Data. Suraci said selling 3000 systems to customers is only the start of what Pivital plans to do with its new prospect. Selling the last round of new hardware to sites which need to upgrade from older models lets Pivital position itself for support business in the future, as well as other hardware sales.

HP has announced it will continue to make N-Class and A-Class CPUs, IO and network cards, peripherals and memory available for new sales during 2004, though Suraci said the vendor hasn’t released specifics of how that aftermarket will work with the authorized channel. The support business that flows from hardware sales looks to be a more reliable prospect for revenues for Pivital. Suraci wants HP to see the company as a contender for any third-party 3000/MPE support partnerships HP may launch in the years to come.

“We’re trying to position ourselves not just as a reseller between now and Oct. 31, but we want to make sure HP understands we want to play a long term role with these homesteading customers, and support is a major portion of that. If and when the opportunity ever presents itself from HP to authorize a select group of companies to manage support for them, we want to make sure they understand we want to play a major role in that.”

In the meantime, Pivital is contacting HP 3000 customers to encourage upgrades of the server while the system is still available new. The newest 3000 system integrator is also pursuing a place in the HP 9000 sales channel, hoping to become a source of hardware when a companies begin to move off the 3000.

Suraci said that business interest has increased since the start of the year. “It’s been a trend we’ve noticed in this budget year. There’s been a significant rebound in the number of customers actively looking at new servers. We’ve made some significant sales already, and the pipeline is full of new opportunities. It may look like we’re getting in the game late, but to us it looks like we’re getting in at the right time. A significant amount of business is going to happen.”

On hearing about an estimate from the latest OpenMPE meeting that 50 to 80 percent of the customer base would be staying with the platform three to five years, Suraci concurred with the estimate. “Those numbers are realistic to me,” he said. “We see very few customers that are in an active migration who were not already migrating when HP made its announcement.”


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