Cashing in on Convergence: A Survival Guide for VARs

Cashing in on Convergence: A Survival Guide for VARs

A converged technology solution can be made up of on-prem products combined with as-a-service options.

VARs that fail to sell a converged set of technology functions, accompanied by an optimal ongoing customer experience, will face diminished revenue streams and difficulty landing new accounts—a stark reality that can be avoided by forward-thinking channel companies.

For VARs looking to survive and thrive in fiercely competitive times, “convergence” means selling services, hardware capabilities and software as one integrated technology solution, eventually from the cloud, with a customer relationship overlay.

This approach goes against the long-running practice of selling hardware, software and services individually. Thanks to the as-a-service model, elements from the hardware and software categories are increasingly available as managed offerings, without on-premises gear and capex spends.

At Your Service

Convergence isn’t just about how things are sold. Another trend of great importance to VARs is the changing mix of elements in a single, integrated technology solution. That’s thanks to the cloud, which enables functionality once only available with on-prem gear, to be sold as a service. This grabs the attention of businesses looking to avoid capex and free limited IT staff to work on strategic, business-oriented projects.

A converged technology solution can be made up of on-prem products combined with as-a-service options. And that’s just today, with much more to come. Looking ahead, the trend is toward VARs selling a converged package made up increasingly of traditional telecom services as well as software-as-a-service options such as desktop-as-a-service, hosted Exchange, managed storage, router and firewall offerings.

Win the Business, Build a Relationship

Teaming with a master agent with a long track record of meeting business’ needs, a huge roster of service provider partners and the opposite of the all-too-common hit-and-run approach to sales, brings VARs the recipe for building a lasting and profitable relationship with any size business.

Allying with a master agent to address businesses’ converged IT needs is clearly preferable to handing leads off to service providers that don't include VARs in any resulting business with the customer.

In that scenario, customers often lose as they get caught in a squeeze play between increasing technology demands and limited IT staff resources. They need a loyal entity that can provide candid advice, guidance, support and more. Creating this relationship with customers helps VARs boost revenue in the long run and insulates both of them from outside influences, such as competitors.

Master’s Degree

Master agents have both the knowledge and resources that many VARs, especially those focusing on hardware and software sales, lack when it comes to traditional communications and the fast-growing list of as-a-service offerings.

Master agents have experience and offerings that span hardware, software and service silos, enabling them to understand and provide converged solutions. But there’s more: They also provide a long-running customer experience that positions the agent as a savvy, customer-focused, trusted adviser without the common out-of-sight, out-of-mind post-sale mindset.

The hands-on approach that includes building an ongoing customer relationship clearly requires more than companies selling narrow, point solutions frequently provided today. By teaming with a master agent with deep resources and seemingly countless partners, VARs can provide the administrative, maintenance, troubleshooting and problem resolution help required to build a strong and trusted relationship that leads to follow-on opportunities and revenue.

Well Beyond Hardware…

It’s no secret that VARs pushing hardware purchases are facing an uphill battle akin to climbing a tall ladder with a backpack full of rocks. That’s because one-time, equipment-centric approaches have been cut into by the as-a-service models that require minimal, if any, capex spending and management offered by the service provider.

Again, though this is not a new phenomenon, it’s picking up speed quickly. The fast-growing list of hardware-based options available as-a-service covers more and different on-prem technology products than ever before.

Consider some of the staples and some of the newer entrants: off-prem phone systems with or without phone sets remaining, managed Exchange server, managed firewall service, managed router offerings, videoconferencing as a service, PCI as a service and desktop as a service.

… And Software

The bad news here is that there are around 84,000 software-focused VARs out there. The good news is that the way software is being sold (as a service) doesn’t exclude others from joining this emerging services market.

Software-based solutions also can be sold and supported using the as-a-service model, whether it’s Office 365, Salesforce, Microsoft Exchange, caching from Akamai Technologies or NetSuite’s integrated business accounting, CRM, e-commerce and ERP suite.

For those VARs seeking to climb up the software food chain, it’s important to remember that software platforms are rarely used off-the-shelf, with businesses large and small tailoring them to meet the specific processes and challenges of their vertical industry.

Thriving with Convergence

It’s tough to break into such specialized industries stuffed with long-established software VARs. But teaming to provide businesses converged technology solutions ahead of the wave not only means you don’t have to, it also means there is plenty of lucrative, long-term business to be had.

While many VARs prefer to focus on one or two categories—hardware, software or services—those that team to provide a converged and integrated technology solution with a great customer experience stand to survive and thrive as the overall market evolves and expands.

The days of VARs providing point products individually and without an enduring trusted-adviser relationship are clearly numbered. So, too, are the days of VARs who ignore convergence.

Ken Mercer is vice president at TBI, a communications master agency offering cloud, Internet and communications services.

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