What's Next For ECM VARs?

Like any mature industry, ECM has seen its share of vendor consolidation recently. OTG/Legato/Captiva and Documentum were gobbled up by EMC, Stellent was acquired by Oracle, and Filenet was merged into the IBM empire. "In some cases, consolidation has pitted many resellers directly against vendors' direct sales forces that have seemingly unlimited resources," explains Joel Port, VP of sales for NewWave Technologies. NewWave is a VAD (value-added distributor) serving resellers, integrators, and service bureaus, distributing products and programs to the imaging, storage, and duplication markets. However, vendor consolidation is not the only trend VARs should be aware of.

Scott Slack is the VP and GM for Cranel Imaging. Cranel is a VAD of document imaging and storage products and services in North America. Slack sees four major trends driving the ECM space: "consolidation, Microsoft SharePoint's increasing presence in the market, improved understanding that ECM is a comprehensive discipline involving a broad range of data types and the entire document life cycle  [capture, manage, store, preserve, deliver], and an increased promotion of overall ECM concepts by industry associations such as AIIM [The Enterprise Content Management Association]."

Wendy Linsky, VP, peripherals product marketing for Tech Data Corp., says, "One of the latest trends we're seeing impact our VARs is the growing demand for imaging and content management solutions related to increasing awareness about regulatory and compliance issues surrounding document retention, privacy, and disclosure." Let's address some of those trends in detail.

Vendor Consolidation
Some say that with all the changes in the industry, it has become increasingly difficult for ECM VARs to navigate in the right direction. But with change also comes the opportunity to shine. So what about vendor consolidation? It is natural in any mature industry. Why should this be any different than before consolidation? VARs should be looking to become the 'go-to-guy' for their vendors — consolidation or not. For instance, when was the last time you had a strategic planning meeting with your ECM vendor or VAD? Are your sales goals aligned? Do you know what your vendor is trying to accomplish? Does your vendor know who you are? The point is that ECM VARs have to be proactive in getting the attention of their vendors. The same thing is happening right now in the network security space, and the successful survivors are those who are working with their vendors to develop a common vision. One safe bet is to get on board with the biggest vendors affecting the ECM space.

Microsoft SharePoint
Speaking of the biggest of the big, Microsoft Office SharePoint Server 2007 is a server program that is part of the 2007 Microsoft Office system. Companies are using Office SharePoint Server 2007 to facilitate collaboration, provide content management features, implement business processes, and supply access to information. Is SharePoint a threat to your business or a complementary technology opportunity? Business Solutions ECM Editor Ken Congdon answers, "While SharePoint offers some basic content services, it lacks more advanced ECM functionalities such as records management controls and business process integration." SharePoint is designed for the SMB market. The threat comes in the form that your SMB customers may wait to see if Microsoft will add more ECM functionality to SharePoint. "That 'wait and see' approach can delay your sales of actual ECM applications," adds Congdon.

On the opportunity side of the argument, most ECM vendors are jumping on the Microsoft SharePoint integration bandwagon. At the very least, that integration will provide VARs with a connector to SharePoint from ECM applications. On the other end of that spectrum are companies such as Clearview that are designed to be an ECM extension of SharePoint. If you're a Microsoft partner, this can be a win-win situation — where you sell and install both SharePoint and Clearview — offering a complete ECM and portal solution. Also, there's no doubt that ISVs (independent software vendors) will develop applications to integrate SharePoint with other brands of ECM software.

Even if you aren't a developer, VARs can customize the role-based My Site templates within SharePoint. In addition to the role-based templates for SharePoint My Sites, Microsoft has also released 40 new application templates for Windows SharePoint Services 3.0. Application templates are out-of-the-box, custom scenarios tailored to address the needs and requirements of specific business processes or sets of tasks within organizations of any size.

Document Life Cycle
Earlier, Cranel's Slack mentioned the document life  cycle (capture, manage, store, preserve, deliver). That life cycle should be a framework for ECM VARs to grow sales. For instance, by inserting each of those words into the following: "How will you _____ your data?," you have developed five critical questions that should be asked during the presales conversations. Be prepared with answers for each of those questions.

Capture, manage, and deliver are directly related to ECM hardware and software. It's the 'store' and 'preserve' words that can lead to complementary sales such as storage systems. This is a bit of a controversial topic. Tech Data's Linsky says, "ECM VARs should definitely look at selling storage. As ECM solutions broaden and become more complex, a scalable storage and infrastructure component is increasingly critical. Imaging VARs that provide total solutions will benefit from the additional revenue and will also ensure that the customer sees the total value they're delivering."

Cranel's Slack agrees, "Storage technologies are a necessary component in an ECM solution. The opportunity to sell storage and archival technologies and related services in an ECM implementation are significant and should not be ignored. The storage and ECM markets are blending, driven by interest from storage-centric manufacturers." StoreVault is one such storage vendor that is really promoting the concept of ECM VARs selling storage — even to the point of targeting Webinars to ECM VARs. The company believes there is an addressable market opportunity for VARs in the SMB segment.

NewWave's Port has a different opinion. "ECM VARs who sell plain vanilla 'spinning disk' storage will have a difficult time competing against traditional storage VARs," he explains. "They will also have to compete against vendors that sell direct such as EMC and IBM. Plus, the decision maker who determines the ECM solution is usually not the person making the storage decisions. That person typically resides in the IT group. We feel the growth opportunity for ECM VARs is in solutions such as DVD publishing systems, optical archive appliances, and enterprise network search and index file servers. These are products that can be intrinsically part of the ECM solution."

Port makes a very good point regarding the location of purchasing decision makers within an enterprise. VARs may not have this problem when bundling their ECM solutions with storage and selling into the SMB space. However, if you are equipped to sell and service ECM products in an enterprise environment, you may very well be able to influence the decision maker for storage. If you can't provide storage, contact your VAD and find a pure storage VAR that you can partner with. By offering a more complete solution, you can add revenue while building trusted advisor status. Whether it's realigning your company with new vendors, jumping on the SharePoint bandwagon, or looking for complementary technologies such as storage, there are still plenty of growth opportunities for ECM VARs that are willing to keep their minds open.