Consolidation Puts VARs In A Power Position

I was one of the first kids in my high school class to receive my driver's license. For a few glorious months, I held the keys to sweet freedom for my friends and had complete control of how we abused that independence. Who knew such power could come from my parents' '86 Chevy Celebrity station wagon? VARs are now in a similar position of power in the IT industry, though they may not even realize it.

The past few years have been marked by several mergers and acquisitions in the IT industry, a trend that seems to be accelerating. While consolidation may evoke fears of lost jobs among smaller vendors, it is a situation that can be advantageous for VARs.

Vendors And End Users Seek VAR Support
For example, the consolidation wave has made VARs highly sought after by more small and midsize vendors as an avenue to sell and distribute products. Most of these vendors don't have the capital to invest in a direct sales force significant enough to compete with larger IT conglomerates. Even if they do have the means to sell directly nationwide, they are often at a distinct disadvantage, considering many of these vendors' products only provide a piece of a total solution and several end users have been charged to streamline internal efficiencies by dealing with fewer vendors. The VAR channel is viewed as a bastion by small IT vendors because it allows them to cost-effectively distribute their products nationwide as part of a VAR's integrated solution.

At the same time, the end-to-end solutions offered by IT corporate giants often aren't well suited to the needs of a small to midsize business (SMB). VARs are an attractive option to end users that seek a customized solution from a local, single point of contact without having to worry about a smaller vendor's staying power.

Keep Technology Simple
Perhaps the best way a reseller can provide customers with value in a consolidation environment is by helping them make sense of the technology. For example, I cover an enterprise content management (ECM) space that is already muddied by countless technology acronyms, and vendors add new ones to the mix every day. It is easy for a customer to become overwhelmed and confused by this terminology. This point was made painfully clear by a recent survey conducted by AIIM (The Enterprise Content Management Association). The survey asked more than 400 AIIM members if the benefits of ECM solutions were clear to their organizations. While 91% of the respondents stated that the advantages of ECM were clear to them, only 20% felt that others within their company understood these benefits.

Clearly, end users are looking for an IT partner that can speak their language and discuss solutions to business problems rather than technology for its own sake. VARs with specialized vertical market or line-of-business expertise are in a primary position to fill this need. These VARs have a thorough understanding of the specific issues their end users face, can communicate with customers using terminology common to the client's line of work, and clearly illustrate how technology can address customers' problems. A VAR can provide even more value to a customer by developing expertise in multiple technologies. This will allow the customer to address more of its IT needs — whether networking, storage, or ECM-related — through a single solutions provider.