Channel Evolution on Full Display at Synnex Event for Key Partners

Want a revealing snapshot of the VAR channel that captures its current look and feel?

Then consider the scene at Varnex underway this week in Anaheim, Calif.

Varnex is Synnex’s peer-to-peer community of resellers who cater to the SMB market and beyond. That’s what the boilerplate says anyway. In reality, the Varnex community is much more. It’s a group of progressive companies, mostly mid-sized VARs and managed service providers (MSPs), that have agreed to collaborate with one another under the egis of Synnex, one of the largest distributors of information and communications technologies (ICT) and services in the world.

This week in Anaheim, the Varnex community and supporting vendors—more than 650 in all—gathered for their annual fall conference where peer sharing, visionary presentations and business entertainment were in abundance. Bob Stegner, Synnex senior vice president of marketing and the man who oversees the Varnex community and events, opened this gathering dressed as Han Solo from the new “Star Wars” movie. (I was betting he’d appear as James Bond from the latest Bond installment, “Spectre,” but I guess it was hard to pass up a chance to play the sidekick to Chewbacca.)

As for why this group provides a snapshot of the VAR economy, consider its members. The collective community of partners that belong to Varnex generate $1 billion in annual sales. The company says they are on track to double that. How are they growing so quickly? Many are doing so by getting into promising adjacent markets and developing deeper capabilities in areas they already pursue. This includes vertical business segments such as education, manufacturing and healthcare, and horizontal technology markets including mobility, data analytics and the Internet of Things (IoT).

During one panel at Varnex, several solution providers showcased the ways in which they are expanding, diversifying or reinventing their businesses. Some of the approaches reveal the lengths that some companies go to reinvent their businesses. Others highlight the level of business innovation taking root inside the channel. Take Pete Zarras, founder and president of CloudStrategies Inc., a Cedar Knolls, N.J., provider of cloud solutions in the New York area.

CloudStrategies is a new “born in the cloud” company. At Varnex, Zarras told the crowd that his company has never sold a single piece of gear to its customers. Not one. But going forward, Zarras said, he might. A born in the cloud reseller looking to augment its business with product sales? It’s true. And not unique.

At the company’s awards banquet on Tuesday evening, I met the head of sales from Emagined Security, a security solutions provider based in San Carlos, Calif.  Since 2002, the company has focused exclusively on the security market. As you might imagine, business is good today. In fact, the company has literally as much business as it can handle. Its technicians, for example, are booked out at 125 percent of capacity. Despite its success, Emagined Security, like CloudStrategies, is looking to augment its core business with complementary sales. Its customers are literally begging the company to help them with other networking, data center and systems administration needs.

“When we satisfy a customer by taking one pain away, they ask if we can help out with other IT needs,” said Dave Zuckerman, senior vice president of sales and marketing at Emagined Security. Turning down that business, he worries, could put his security business at risk if customers bring in an ambitious third party that wants a greater share of that customer’s IT wallet.

Zarras similarly noted that his success in cloud services has prompted his customers to ask for additional capabilities.

Which brings us back to the Varnex event itself. One of the reasons Zarras said he was at Varnex 2015 was to learn from his peers how to handle product sales.

“Something as simple as charging sales tax is new to us,” he said. So is training employees versed in the art of transactional sales.

Other Varnex partners were similarly interested in expanding their horizons, which is a bit of a change from other events I’ve attended this year where “focus” was front and center. Varnex newcomer Bill King, CEO of Direct Dial, a Canadian reseller, said he came to Anaheim to learn how to develop service practices to augment his healthy product sales business.

As for Synnex itself, it, too, is looking to expand its horizons. Here in Anaheim the company made three announcements along this vein. First is a deal to distribute “client, enterprise, print and imaging” products from Dell to Canadian SMB resellers. Second is a agreement to distribute Commvault data protection and information management solutions. Lastly, Synnex announced a plan to provide the Dropbox Business’ platform to Synnex partners in North America through the Cloud Community and CLOUDSolv marketplace.

Thanks to these and other initiatives, Synnex is commanding greater attention inside and outside of the industry. On Wednesday, for example, it’s stock closed at $94.77—just dimes short of its 52-week high. In September, meanwhile, the company posted higher earnings for the third quarter ended Aug. 31, 2015.

While some in the channel are finding it easier to grow by narrowing their target market, others are growing in a more traditional sense. Broader capabilities. More products. Big dreams.

That’s the word from Anaheim.