By Channel Voices
March 11, 2013
As an increasing number of VARs add SaaS offerings to their portfolio, those without cloud services will find it increasingly hard to compete for customers -- and to maintain profitability without the margin-rich recurring revenue streams that SaaS services provide.
In North America, there are approximately 100,000 providers that provide IT services. Of this number, most are hardware VAR/resellers, and 15,000 to 20,000 would be considered managed service providers. The largest growth opportunity for hardware resellers is for those who can provide their customers with a full portfolio of hardware and managed/SaaS services. There are many reasons the market opportunity here is massive for those who offer both hardware and managed services:
1. A thicker managed services portfolio lessens the opportunity for a competitive VAR to move in and provide a unique service.
2. It helps hardware resellers remain relevant to their customers.
3. It provides the opportunity to grow business by providing everything a customer needs on one bill.
4. Adding SaaS services may serve as a disruptive advantage to gain access to new accounts.
5. Since SaaS services are "sticky," it will help the service provider to maintain a long and profitable relationship with the customer.
If the above reasons for offering SaaS services are not compelling enough, think of the opportunity for those services to provide recurring revenue. Recurring revenue grows over time with greater profit margin than hardware sales. As described in an article by Todd Scallan, vice president of products at Axcient, recurring revenue grows over time with greater profit margin than hardware sales. The result can easily be more than $700,000.
Channel experts agree that providing customers with more options through monthly services is a key to future success. New technologies, with scalable options for monthly service costs, are appealing to customers. The remaining challenge is in planning a strategy that will take a VAR business owner from today's hardware-centric business into tomorrow's SaaS business.
Hardware distributors also see an opportunity for growing SaaS revenue. They have a huge base of partners who purchase hardware. Why not offer a complete services portfolio to these partner bases and help them develop a SaaS business? Tech Data (TD Cloud), Ingram Micro (IM Cloud Services) and Synnex (CloudSolv) are all helping channel partners shift their businesses by adding SaaS services. They provide a complete hardware portfolio, plus a growing SaaS portfolio to become a one-stop shop for VARs who want to sell both. These distributors also offer resources to grow a managed services business, including training, thought leadership Webinars and events, and feedback from peer resellers/MSPs to help the VAR/MSP grow their services business.
Managed services continue to evolve. The move into SaaS services is a huge step, but a necessary one to thrive in a future where customers need and want change. VARs and distributors who plant the seeds of a services business now will have an easier time offering the next generation of services as well.
Andrew Alegria is senior manager of strategic relationships for Axcient. Though he lives in Boise, Idaho, he has been building channel partnerships and managing strategic relationships for Silicon Valley companies for more than a decade.
February 05, 2013
Success in the world of resellers is not such a lofty goal, especially if you have the power of two organizations working in tandem to bolster sales efforts. Using a combination of field and technical engagement, solid marketing planning and executive management relationships -- from both the reseller and manufacturer, of course -- channel partnership success is indeed within reach.
The following tips present some practical advice for ensuring a cohesive channel partnership derives great success.
1.) Create a Marketing Plan Together -- and Stick to It
Like a map used on a road trip, a comprehensive marketing or business plan is key to ensuring you get to where you want to be. When developing your plan, work with your manufacturer to identify the targets you want to hit within a particular period of time, whether it's a quarter, half-year or annual. Then determine what you must do to get there (i.e., hold five lunch-and-learns to generate 20 leads that yield $100,000 in revenue). This marketing plan will hold both the reseller and manufacturer accountable, and will set forth a predictable revenue stream. Of course, it must be reviewed periodically to make sure you're on track. If you're not, adjust accordingly.
2.) Encourage Communication among Field Staff
Communication among the field staff from both sides -- the reseller and manufacturer -- is key. Use account mapping to talk through which accounts each side will penetrate, and then devise a game plan to see it through. For example, figure out if existing contacts will be leveraged or if Salesforce.com, Jigsaw or the like should be used instead. Once the targets have been identified, determine the next steps, whether email, live appointment, conference call, etc. Engage both sides of the field in joint marketing activities like lunch-and-learns, customer hosting events and webinars. Communication is just as important on the sales engineering (implementation) side. Members of these teams can meet in the field at similar points and share in account mapping and marketing activities.
3.) Consistently Update Your Knowledge of the Product
It is absolutely imperative that members of each side are kept as up to date as possible on a product's new features and functionality. Channel sales engineers must, in essence, become product experts, and demand regular training from their manufacturer counterparts. Sales staff, for their part, must likewise keep up with the latest messaging, feature sets and solution updates. Remember: Although separate entities, the reseller and the manufacturer are representatives of the same product, so you both must speak the same language and have the same level of knowledge.
4.) Engage Executives from Both Sides
Although it may not happen very frequently, make an effort to bring together members of executive management from both sides. Depending on the size of each organization, these folks may be senior or mid-level managers. When relationships are established at this level in each organization, it makes for much easier resolution when an issue arises.
5.) Work the Channel Program to Your Advantage
It's been said before, but it bears repeating: Take advantage of all the manufacturer's channel program has to offer. This includes engaging in the registration process and staying involved with resolution processes through the close of the deal. Leveraging these tools will help ensure channel conflict is effectively avoided.
Despite best intentions, when two separate teams from different organizations come together, disorganization and miscommunication can impede an otherwise successful partnership. But armed with careful planning, communication and support -- as well as a laser focus on the objective -- a cohesive and successful channel partnership can emerge.
Chet Menzione is the vice president of channel sales at Quorum.
PUBLISHED FEB. 5, 2013
January 25, 2013
Today, business adoption of cloud computing is on the rise and expected to increase. In fact, Gartner predicts the worldwide market for public cloud services will experience 100 percent growth by 2016, significantly outpacing overall IT spending. The emergence of a variety of cloud models, like IaaS, SaaS and PaaS, in addition to the array of deployment models, including public and private, is accounting for the cloud's shift from a complex technical solution to a true business enabler.
Furthermore, with the cloud market maturing, enterprises are building new IT environments where software and infrastructure are consumed as services and exist next to on-premise virtualized environments. These hybrid cloud solutions combine public and/or private clouds and on-premise IT and will become the new cloud reality for enterprises looking to benefit from the best of both worlds.
Today's reality is that building a hybrid infrastructure and subsequently connecting private and public clouds is challenging, particularly when different technologies and vendors come into play. For this reason, enterprises are increasingly looking to systems integrators, whose roles will transition from IT configuration managers to service-based cloud migration agents.
Systems integrators will not only simplify the cloud deployment process for enterprises but also greatly benefit from the delivery of cloud computing to their customer base in order to maintain and grow a consistent revenue stream and achieve greater integration with customer business requirements. At the same time, system integrators will be tasked with difficult decisions, such as whether to build, buy or rent the underlying platform on which to build a hybrid cloud solution.
However, before reaping the benefits of a hybrid cloud, enterprises -- with or without the help of systems integrators -- must go back to the basics and carry out a series of tasks that will ensure they have a proper cloud connection in place.
NEXT: Seven Steps For Cloud Migration
To achieve an adaptable cloud model for business growth, systems integrators should institute the following seven steps as part of their cloud migration service:
1. Firstly, prepare virtual machine instances (VMIs), which will be the quickest way for a customer to get started in the cloud.
2. Then, load applications in the cloud in order to eliminate the overheads of software maintenance, management and support associated with running the applications locally. Additionally, enterprises should upgrade software to the cloud version of their applications, rather than simply migrating applications that are "cloud-unfriendly."
3. Upload data. To decrease the amount of time required to transfer data, customers could run logic and processing in the cloud and leave the database in the data center. If the customer cannot upload the data, there needs to be a mechanism whereby they can ship a disk or tape, which can be loaded for them.
4. Establish the right form of connectivity. When gathering information about the workloads that will be transferred to the cloud, one should also gather data about the bandwidth required by the application. This will guide a decision whether to use the public Internet or dedicated leased line connectivity.
5. It is also necessary to deploy federated management and logon systems in order to maintain proper access controls and compliance in the cloud. Where available, these should be installed with the first VMI, which will help ensure that, as other VMIs are created, they are picked up by the management tools. The federated logon process will ensure that access controls are in place from the first VMI.
6. In order to fully realize the promise of the cloud, implement security. Firewall security should be a part of all the pre-prepared VMIs with all ports locked down by default, and customers should be encouraged to use and synchronize the firewalls across all of the VMIs. Additionally, access to other security tools like intrusion detection and prevention systems will allow security to constantly be checked, and it can also be sold as a service.
7. Finally, implement disaster recovery services in the cloud to reduce the risk of business interruption. However, since there is always the risk of disruption on-premise and in the cloud, customers should deploy a hybrid model in which synchronous storage technologies write the data to both the cloud and on-premise storage solutions.
The benefits of a hybrid approach will create more diverse and heterogeneous cloud environments. A hybrid cloud environment allows enterprises to keep sensitive data that needs a high level of security in a private cloud infrastructure, while at the same time leveraging the public cloud when there is a need to take advantage of its scalability. In this case, cloud testing environments such as Cloud Test Labs would be ideal for systems integrators and enterprises looking to build hybrid clouds and test them in a carrier-neutral data center before launching their cloud services.
A successful hybrid cloud, which is the result of the public cloud working in sync with on-premise environments, will quickly become an IT standard. Particular elements will make this model attainable, including a properly laid infrastructure in a carrier-neutral colocation facility, coupled with carefully examined operations and performance metrics. Enterprises may not have the resources and skills to develop their own cloud environment or even perform the integration, which is why they frequently rely on trusted IT partners. For a systems integrator to become a cloud migration agent, it is crucial to simplify the cloud migration and allow enterprises to seamlessly grow into the cloud. And, by following the steps laid out above, systems integrators will have the opportunity to deliver an adaptable cloud deployment that will enhance their relationships with their customers and create new revenue opportunities.
Jelle Frank van der Zwet is the Cloud Segment Marketing Manager for Interxion.
PUBLISHED JAN. 25, 2013
January 10, 2013
The federal government has slowly been undergoing a switch in budgeting and procurement from focusing on capital expenditures (CapEx) to operational expenditures (OpEx).
Why? In budgeting, OpEx costs are more predictable. With the current problems in the federal budget, contracting officers, program managers and CIO staffs are putting a premium on cost predictability and ease of provisioning.
As a result, there is a real dichotomy developing now between how the government wants to buy and how the manufacturer needs to sell. In particular, because of the increasing preference for cloud-based offerings within government, we're starting to see a gradual transformation from point products to services. This is clearly evident in the federal move to cloud computing. The latest report from the Office of Management and Budget, for example, shows that 40 of 78 projects targeted for movement to the cloud already have made that shift.
The desire among government professionals to spend OpEx instead of CapEx dollars means that budgets will increasingly be geared to existing programs. Any new projects or programs will be harder to get off the ground.
So it's time to rethink demand generation and channels of distribution in light of these new customer requirements. Companies selling into the government have to take a hard look at how they position their products, channel and direct sales strategies to go after operations and management dollars.
Technology vendors should redouble their efforts to show why their solutions offer the best value in the current climate while making it easier for the benefits of their products to be delivered in alternative models. These companies are increasingly looking to the channel to provide that translation from product to service.
It's also time to take a harder look at compensation. Despite this shift in federal budgeting and procurement, manufacturers have neither changed the way sales reps get paid nor the way companies recognize revenue. There must be a new way of recognizing revenue, especially for large companies.
Technology vendors need to create a multipart strategy to figure out how they can bring their products to the market space from a business, sales and technical perspective. An important part of this strategy is having answers to some fairly specific questions:
* What sales activities are required to bring the technology to the market?
* What types of partners are necessary in this new budgeting and procurement ecosystem?
* What activities are best suited for the manufacturer to perform?
* What are the go-to-market plans that compensate the partners for performing these activities?
The upshot of this is you need to not only refocus how you’re promoting your products to the government -- namely, as services that can be tied back to existing programs and objectives for mission fulfillment -- but also be sure you’re fairly compensating the partner that will get you there.
Keep in mind also that there are new partners in the game. Cloud brokers, service providers, carriers, managed service providers and even leasing companies may have a play in your new strategy, because alternative financing models need to be considered in getting to these operational expense dollars.
Channel partners have an opportunity to take a new look at the space they play in and how they sell point solutions into that new space. A huge opportunity exists for the companies that can figure it out fastest. Companies that can better market and position the move to the cloud will be better set up for success.
Skip Liesegang is vice president of the government channels division of immixGroup, which helps technology companies sell to the federal government. He can be reached at Skip_Liesegang@immixgroup.com.
PUBLISHED JAN. 10, 2013
December 19, 2012
Selling products through a wide array of IT channels means channel conflict is an inevitable -- simply the necessary friction of a competitive business environment. For vendors, while a small amount of channel conflict indicates adequate market coverage, it spells trouble for resellers. So much time is spent vetting opportunities that a loss to a competing reseller means time and resources were wasted.
Most vendors have in place a registration process to manage this conflict, which resellers should leverage to the fullest extent possible. But, resellers shouldn't rely solely on registration. Adding a few extra steps -- along with a dash of common sense -- can ensure resellers come out on top when vying for the all-important new prospect.
[Related: How To Partner Successfully]
1.) Stake Your Claim
Many vendors have implemented the aforementioned registration process for new opportunities, be it via email or through a partner portal. Unfortunately, resellers often fail to register their prospect, leaving it wide open for another partner in the same region to claim. Therefore, immediate registration should be the first order of business for a reseller.
2.) Confirm Your Registration
As soon as you finish typing up that email registering your opportunity, reach for the phone and call your vendor's sales rep. The reasons for doing so are threefold:
* It allows the reseller to share as much information as possible about the prospect with the vendor so a plan of action can be created.
* It serves as a backup in case the registration didn't make it through. Technology hiccups are far too common and occur without warning, so it's best not to leave a coveted opportunity to their whim.
* It builds a good relationship with the vendor's direct field (if applicable). When the direct rep recognizes you as a trusted partner with whom he has a relationship (and not the competition), he will be more willing to share leads rather than fight over the same ones.
3.) Get a Meeting On The Books
Step three is likely the most important element in solidifying an opportunity. Once a reseller has registered and confirmed the opportunity, arrange a WebEx, phone or face-to-face meeting with the prospect and vendor. This step ensures an indelible claim by the reseller on an opportunity in all parties' minds.
4.) See Your Sale Through
Managing your opportunity from soup to nuts is a professional touch all resellers should aim for. Seeing it through the entire sales process not only helps build a lasting business relationship, it can also open doors for upselling, future sales or recommendations for other new opportunities.
5.) Don't Overextend Yourself
At first glance, offering a wide swath of products may seem like a great way to broaden your appeal, but try to resist. Resellers that sign up to represent too many products can find themselves spread too thin and unable to spend an appropriate amount of time learning about each product and cultivating promising leads. With so many products to cover, overextended resellers can hardly find the time to register prospects properly (or at all). Worse, they may ignore those that have been registered, potentially sullying a business relationship.
Instead, select products to resell from vendors based on the strength of the product and how it fits into your product portfolio. Your selection should also be based on the vendor's partner program.
Certainly, vendors do what they can to keep a level playing field among their resellers in any particular region, most often by offering specific tools (e.g. registration) as outlined earlier. Only by making these tools a permanent part of the sales process will the reseller gain an advantage in the channel.
Chet Menzione is the vice president of channel sales at Quorum.
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