Mobile Technology

According to the 2007 CRN Profitability Study, solution providers have seen an average top-line sales increase of 15.6 percent in the past 12 months and an average gross margin of 15.4 percent. Close to three-quarters of solution providers report that mobile technology is of at least moderate importance to their customers, up from 69 percent in 2006.

Why the upswing? "People are talking about it now. Health care and banks and all those customers that weren't talking about it before because everybody was worried about security, everyone seems to be comfortable with security now," said John Gunn, president of ISG Technology, a Salina, Kan.-based solution provider with nine locations in three states. "It was something new for everybody to get used to."

Now that customers are willing, however, it's the size of the deal that determines whether a mobile technology deployment is profitable, Gunn said. "Somebody wanting three access points is pretty tough. You just spend an enormous amount of time making it work, and it's hard to make any money doing that."

The average size for mobile deals in the 2007 CRN Profitability Study was $11,100, down slightly from the previous year. The sales cycle, however, also shrank to two months, down from three months.

Dave Gilden, partner and COO at Acuity Solutions, Tampa, Fla., agrees that the size of the deal determines how profitable it will be for the solution provider. "[Margins] really vary depending on the size of the opportunity. Enterprise and government deals can get quite large, but this problem extends across most business segments. Margins typically fall in line with the rest of our product portfolio at about 12 [percent] to 18 percent," he said. "Certain segments have become commoditized and margins are thin in those. Typically when services are involved, we see good margin."

Next: Mobile technology profitability, by the numbers