What does a VAR or MSP have to do in today’s changing channel to remain relevant? Westcoast’s UK and Ireland MD Alex Tatham looks at how the market is evolving and how resellers can ensure they don’t get left behind…
“Hands up, who would start a traditional product reseller if they had the resources?”
I was struck by that question posed by Gartner to a conference of 300 resellers.
Not one hand went up in the room. This conference wasn’t last month – it was four years ago. I can assure you that the answer would be no different today, and yet I have failed to see Westcoast customers changing their business models dramatically – nor have I seen enormous amounts of companies winding themselves up in the past four years. So what IS actually happening?
Firstly, product supply has had plenty of business and still has. However, the market is diminishing and the end users are also different. The channel has improved its efficiency and relevance as its value has improved. And vendors have recognised the model’s success by moving their direct business to indirect – just look at Dell which had to go private to execute on this policy.
Secondly, traditional VARs are used to selling services, hence end users trust those incumbent resellers that were able to help them move to the cloud in some way. This means existing VARs are in a better shape to service an end user (as long as they are progressive).
Finally, the range of services offered by vendors and distributors has multiplied – and made more efficient by their channel engagement. This has allowed resellers to offer a broader range of services.
If this isn’t resonating with you, let me give you some ideas:
1. You must be clued up enough in cloud computing to talk to existing end users about their journey to the cloud.
2. You must be more efficient – make sure you are electronically engaged with your key distribution partners. Product margin is NOT going up, so your costs for this aspect of your business must be reduced.
3. Partner with other resellers and distributors to enhance your offer and range of services.
4. Talk to your customers’ senior decision makers. If your only relationship exists in the IT department of your end user, your likelihood of retaining that customer is reduced.
There are many ways to be relevant in today’s IT channel, but your biggest challenge in the future will be billing your customer. Reach out to your distributors and ask them how they can help.
Darwinism is as true in the IT channel as it is on the Galapagos Islands. Get fitter – as your survival will depend upon it.
Alex Tatham will be speaking at PCR Boot Camp North. The conference and expo is free for retailers, resellers and system builders. Sign up now at pcrbootcampnorth.com