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Endpoints Still Matter for the Channel

As device margins get thinner, solution providers will make money only by upselling IT services delivered via the endpoint.

As endpoint devices became less expensive over the years there has emerged this notion that the “consumerization of IT” means that everything from smartphones to PCs are now essentially disposable. But as management software gets more sophisticated inside and out of the cloud, the endpoint device being deployed soon may make all the difference to the channel.

Case in point is Hewlett-Packard (HPQ) recently unfurled an HP TouchPoint Manager cloud service aimed at small-to-medium businesses (SMBs). The idea is to allow SMB organizations to invoke a broad swath of device management services that not only span HP notebooks and desktops, but also mobile computing devices running Apple (AAPL) iOS and Google (GOOG) Android operating systems.

Michael Park, vice president and general manager of HP's Mobility and Software Business Personal Systems group, said HP next year plans to reward its partners for getting customers to turn on the HP Cloud service once they buy an HP device.

While HP is a little further along in terms of making the endpoint device used by the end customer more relevant to their channel partners, other PC vendors are heading down the same path. Dell, for example, is crafting a broad range of integrated IT management services. Sean Wisdom, director of Global Mobility Solutions Marketing for Dell, said Dell won’t pre-load any software on its devices that are tied to a specific management service. But as part of being an end-to-end provider of IT infrastructure, Dell will provide management software that can be more easily downloaded on to a device regardless of who owns it, Wisdom said. That way the internal IT organization can guide end users toward a specific class of devices without necessarily having to actually buy that device for them, he noted.

In both cases Dell and HP are trying to leverage the endpoint ultimately to upsell additional software and services. For solution providers, owning the relationship between the endpoint and the backend services that support them are critical to their profitability. As margins on the devices get thinner, the only way solution providers are going to make money is by upselling IT services that are delivered via the endpoint.

It’ll be up to individual solution providers to determine whether they want to resell those services or build and deliver them on their own. The only certain thing is whoever sold those endpoints that consume those services will have the inside track when it comes time to selling and delivering them.

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