Solution Providers, I'm Betting That Your Product Mix Is Out Of Whack

ROBERT FALETRA

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Can be reached at (781) 839-1202 or via e-mail at [email protected].

There is no way to accomplish that other than to constantly evaluate new products that can offer you and your customers new opportunity to leverage technology. You need to look beyond the traditional vendor set, and that takes work.

This is something that used to happen all the time in the early days of the industry when no single company dominated any category. It's also the key to better margins and innovation.

Traditional vendors are just that, traditional. They tend not to be the most innovative. They are more concerned about protecting their turf than staking new ground. Hewlett-Packard in the printer space is an exception here. Most companies that had a dominant share of the laser printer market would never have come to market with low-priced inkjet models. HP did just that, and by doing so, it expanded the market and now dominates in both areas.

But that's unusual, and in most cases, traditional vendors tend to be followers. Emerging vendors by necessity have to have something that's markedly different or they get no attention. That means no attention from venture capitalists, solution providers or customers. Part of that difference has to include margin for the channel. That should be one of the first questions you ask if you get interested in a product from an emerging vendor.

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This week's CRN special report on emerging vendors is part of an ongoing effort from the CMP Channel Group to help you become more aware of what's available. Our XChange conferences also offer a wealth of opportunity to find new vendors, as do our Web sites.

Historically, I've found the solution providers that are best at finding and adopting emerging products and vendors are the most profitable, while those that get bogged down with a staid set of offerings find themselves fighting for thinning margin.

The profitability that generally comes with newer products or vendors used to be because there was lots of mystery around the product set. Today that's less true, and in fact, the better margins tend to be because the product set is more competitive and just does more at a lower price.

In addition, newer vendors tend not be overdistributed and are easier and more likely to have a direct relationship instead of using distribution until they get to a significant run rate.

'Traditional vendors are just that, traditional. They tend not to be the most innovative. They are more concerned with protecting their own turf than staking new ground.'

One of the other interesting trends right now is that new, interesting products are coming in high growth areas. If you look at this week's report, for instance, you'll see a high concentration of storage and security possibilities. There's nothing better than having an emerging competitive product offering in a growing market. It's a sure recipe for gaining share.

The other thing you will find in the emerging product category is that the differentiator is often the lack of complexity. That cuts down on deployment time, which translates into a moneymaking proposition in itself.

In the end, finding, evaluating and signing up new products and vendors is a lot of work. It may even require a dedicated individual or team. At the very least, to make it happen with any regularity, it must be a major focus for the solution provider and someone's responsibility.

Don't take it from me—just read this week's report to see how other solution providers are building profits with emerging products.

Make something happen. I can be reached at (781) 839-1202 or via e-mail at [email protected].