Solution Provider Shift Will Change The Game

Some recently completed research here at CMP Channel points toward some significant shifting in the channel over the next few years that will require solution providers and vendors alike to be on top of their games or risk being neutralized.

As the largest producer of channel-specific research, we here at CMP Channel are able to identify trends very early in the cycle. When we bundle up the view gained from multiple projects, the picture gets even clearer. We are now seeing some interesting trends in the churn of strategic vendors by solution providers and the adoption of new product sets.

ROBERT FALETRA Can be reached at (781) 839-1202 or via e-mail at rfaletra@cmp.com.

To be specific, solution providers are bringing on vendors at a clip that is nearly 40 percent more than in the past few years. The amount of new product they are accepting into the organization is north of 70 percent higher than it has been in recent years. Even more important, 50 percent of the channel views its relationship with vendors to be less than positive.

My take on this coupled with other data I have—and my gut feeling that comes from talking to hundreds of solution providers and vendors—is that the solution providers that are driving the bulk of the business for vendors today are going to change and change rapidly. Many of you are going to drop the vendors you now view as strategic as you shift your business.

Many vendors are light on management talent that truly understands the channel. As a result, they will find themselves out of position in a year or two with a channel that is not optimized.

There is a major repositioning beginning to take place in which solution providers are going to select a new group of strategic vendors to move forward into new markets. Solution providers also need to realize that what their customers are asking for may not be solvable with the current vendor set. To stay relevant with your customers—ultimately the most important thing you can do—you may need to find new solutions driven by a different set of suppliers.

Much like a quarterback has to audible on the scrimmage line, vendors and solution providers need to remain nimble or they are going to find it difficult to keep the business humming.

ROBERT FALETRA Can be reached at (781) 839-1202 or via e-mail at rfaletra@cmp.com.

What sihifts do you see taking place?
Make something happen. E-mail CMP Channel Group President Robert Faletra at rfaletra@cmp.com.