The Channel Of The Future
Vendors are starting to seek a different breed of partners. They want solution providers who sell emerging technologies and target promising markets.
If you were to envision your future channel, what would it look like? This was a question Edison Peres addressed during a Business Solutions interview at the Cisco Partner Summit this spring. Peres is VP of advanced technologies for Cisco's worldwide channels and is responsible for building the distribution strategies for IP (Internet protocol) telephony, wireless, storage, security, and optical technologies.
Peres says the ideal channel partner isn't a VAR, a reseller, or an integrator. The channel businesses that will survive - and thrive - are solution providers who focus on key technologies and vertical markets. Cisco isn't the only vendor who sees its future channel this way. In recent interviews with EMC, Fujitsu Softek, HP, Internet Security Systems (ISS), and Symantec, channel chiefs at these companies said they are seeking a different breed of partners - solution providers.
Sell Solutions - Not Products
Solution providers are focused on solving customer problems - not on pushing hardware or software products. They have built practices in their business around high-margin technologies that their customers require. Today, a number of solution providers have built technology practices. Two good examples are Datalink (storage solutions) or Cadre Information Security (security solutions). Some larger solution providers have multiple technology practices, such as CompuCom (storage, networking, security, and document management solutions). And, if customers' business problems require technologies beyond the solution providers' practices, they often partner with other companies to deliver the total solution.
Build Services Into Your Offerings
Solution providers are often so closely tied to their customer businesses that they've developed service offerings to meet their needs. Some act as a customer's outsourced IT department providing services such as system monitoring, maintenance, and upgrades. CPI Network Solutions is an example of one company with a services focus. Faced with decreasing margins on networking and telephony products, CPI started offering services such as project planning and management, strategic technology planning, and security risk assessments. More than 70% of CPI's revenue now comes from services - the rest comes from hardware and software sales.
Targeting Promising Markets
Vendors are also targeting solution providers working in vertical markets that are rapidly adopting technology. Some vendors have developed alliances with independent software vendors (ISVs) working in healthcare, retail, banking/financial, government, and SMBs (small- to medium-sized businesses) to work with their channel partners. Additionally, vendors like Cisco are helping existing partners enter these markets. Cisco has developed educational materials to educate the channel about the products, applications, and opportunities in vertical markets.
For Business Solutions, these new channel strategies just reinforce the mission we've had in place for over a decade (see our mission statement on page 6). Every issue, we publish articles showing your channel peers selling new technologies, penetrating promising vertical markets, and integrating complementary technologies into total solutions. Are you following in their footsteps?