VARs: 10 Steps To Business Growth In 2008

With the new year fast approaching, it's critical that VARs keep savvy on the upcoming technologies and business trends reshaping the landscape. Here are what VARs say will be 10 key steps to grow in 2008.

1. Embrace software-as-a-service

As customer relationship management, Web conferencing, security services and a host of other implementation opportunities for software as a service (SaaS) grow in the near future, understanding the new possibilities SaaS is opening up is important. While adoption has been slow, SaaS is predicted to be a $1.4 billion business by 2011. For VARs that provide personal productivity applications with on-premises software, SaaS will increasingly cut into business in the coming years.

Tom Ruffolo, president of eSecurityToGo, Irvine, Calif., said SaaS helps reduce time-to-market because it is simple to integrate and reduces infrastructure requirements. Ruffolo said that while some companies are unfamiliar with the benefits of SaaS or worry about a perceived lack of control, explaining the benefits on a company-by-company basis can be an effective strategy. So is knowing which clients need the service most.

"Smaller-to-medium-sized companies are more likely to go for [SaaS]" Ruffolo said. "Many of them don't have on-staff IT people, so the simpler you can make it to implement the better. Ruffolo lists ease of maintenance, lower risk of downtime and affordability as the top selling points of SaaS. "This is just sort of a better fit for some companies -- and it will seek its level," he said. "And that level is certainly going to be higher than it is now."

2. Get creative in technical hiring

The quality of your technical hires is critical. For 2008, all projections say that technical staff will be in high demand and short supply. Rachel Coburn Johnsen, recruiting team leader at Boise-based Intermountain Technology Group, said in IT the talent pool is driving the market rate, and offers are aplenty. "Each candidate is reviewing 70 opportunities and will receive seven offers within seven days," Johnsen said. "The biggest key is being very prompt, getting people in for interviews and being prepared to make a decision fast -- don't get into a bidding war."

Johnsen recommends focusing on unique employment perks and benefits -- everything from increased vacation time to profit-sharing benefits or even little perks like membership to a local gym. When it comes to finding qualified applicants, be prepared to search outside the box. "The most success we're having right now is through social networking -- mostly LinkedIn," she said. Johnsen said she's "absolutely" happy with the results so far, but that building that social network can take quite a bit of time.

3. Go Web 2.0 for marketing

YouTube, blogs, viral marketing: You've heard all the terms, you've seen corporations successfully implement them, and you can be sure Web 2.0 marketing techniques are going to play into your branding strategy. While some VARs have begun experimenting with blogs and interest in social networking grows daily, security concerns and an unfamiliarity with Web 2.0-centric marketing plans hampers real action.

Pam Wiese, director of customer relationship management with LOGOS Communications, Westlake, Ohio, said the company will use a cost-effective marketing plan employing applications such as blogs and YouTube to get closer to clients. "Web 2.0 has impacted the ability for VARs to listen to their clients," Wiese said. "It has also decreased marketing budgets, since many of the technologies are free or low cost compared to traditional advertising and marketing." Wiese also acknowledged that Web 2.0 marketing requires a different mentality than past advertising channels. "It is more collaborative and interactive as compared to one-way marketing of the past," she said. "It is more about engaging and entertaining, while also adding valuable content."

4. Build managed services

Managed services was a hot topic in 2007-- and it will be getting hotter in the coming year. Backup, storage, network and systems management are all potentially lucrative areas for managed service providers (MSPs), but some VARs say it's now or never for those who want a piece of the action. Rory Sanchez, president of West Palm Beach, Fla.-based SL Powers, describes his company as "managed service-focused" since 1998, when he began providing flat-rate service contracts. "Then we started adding additional tools to it, which became remote monitoring and administration, et cetera," Sanchez said.

"If you want to get into this business you've got to drop everything and do it," Sanchez said. "I think a lot of people try to preserve their margins in the product business and I'm telling them -- give the hardware away." Sanchez said companies moving into the MSP space need to do "whatever they can" to bring managed service customers through the door. "It's about process, not the tool," he said. "I could switch tools on a weekly basis and my customers wouldn't care -- build that process and have faith in that process."

5. Maintain vendor support

Active vendor support is a critical part of a solution provider's success, but early partner support can dwindle if it isn't nurtured. That's why Arlin Sorensen, founder and CEO of Harlan, Iowa-based Heartland Technologies, said he spends half his time deepening the relationship between his company and his vendors. "Maintaining vendor support is critical from our perspective," Sorensen said. "We treat our partners like a customer. We keep them informed of what we're doing, update them on our success stories."

Sorensen said he believes VARs need to be proactive when cultivating long-term relationships with vendors. "We make a huge investment with our vendor relationships," he said. "The training we participate in to get our teams up to speed is critical for us to support the technologies. We do a lot of joint planning with our vendors." One aspect of that strategy is a yearly business-planning meeting with Heartland's four major vendors and distributors gathered together to plan out 2008. It's a business strategy that's evolved over time. "We used to do [the meetings] one at a time, and we were ending up with multiple plans," Sorensen said. "Now we lock all the vendors in the room together and pound out a plan."

Sorensen added that it is important to remember vendors are short-staffed in the field and it takes active communication to keep your company on the radar screen. "We would not be close to where we are if it wasn't for the relationships we've cultivated with our vendors," he said. "Investment precedes return. That's never more true than with a vendor relationship."

NEXT: 5 More Steps