Coast Solutions Group Rides the Services Wave

Headquartered in Irvine, Calif., CSG was formed two years ago with the novel idea of becoming a value-add distributor that doesn't sell products. Freeman says the logic was simple: Plenty of distributors already sold products, so CSG needed to bring something entirely different to the table for the channel. Thus, the company supplies VARs with professional services, technical support, project-management consulting and other integration services for its customers.

For example, a solution provider working on a networking-integration project can leverage CSG's support staff, which provides technical and solution scoping for the reseller.

CSG now has approximately 100 solution-provider customers, including a few VARBusiness 500 members, such as Sanz (VB500 No. 315) of Englewood, Colo., and AimNet Solutions (VB500 No. 460) of Norwalk, Conn. Recently, the company launched an official membership program to help attract new solution providers who need additional resources for services and support. The distributor is hoping to attract dozens of small to midsize solution providers who can not only receive support from CSG's staff, but also leverage the skills of existing network members and even team with them on joint engagements.

Now CSG is making its boldest move yet with a new initiative -- ithe Coast Solutions Group ServiceBuilder Program, which will allow CSG to partner with vendors and deliver the companies' branded and packaged service offerings to CSG customers.

"We think there's a definite need for this type of offering, and there's a strong interest from the manufacturers, too," Freeman says. "A lot of vendors are trying to figure out how to help their VARs sell more services, and this is a great way to do that."

Freeman says the program is a way for his company to bring value-add to vendors' partner programs. With ServiceBuilder, CSG will team with vendors to make it easier for its resellers to sell the vendors' services.

"There's a lot of manufacturers that haven't optimized their service offerings for their partners," Freeman says. "For example, if a company has various certifications and partner levels, that may make it more difficult for a partner to sell services. But through this program, we allow them to turn their services component over to us and allow resellers to better leverage that suite of services."

ServiceBuilder will provide vendors with a host of resources and support to aid them in delivering services. For example, the program provides vendor partners with CSG solution architects that provide solution development, resource management, delivery management, and reporting and tracking services. CSG has already formed an alliance with one major vendor for the ServiceBuilder program, though it has yet to be announced. Indeed, there should be no shortage of vendors interested in leveraging CSG's model, considering the rising interest in providing high-margin services to channel partners. Top vendors such as Hewlett-Packard, IBM and Sun Microsystems have all increased their services presence for VARs in an attempt to increase partner profitability.

As for solution providers, Freeman says he has received positive feedback from his customers about ServiceBuilder, which will expand the opportunities around high-margin branded services for many VARs.

"We've already done some smaller offerings for individual vendors, so the network members know how it works," he says. "They're pumped up about the program because they want to develop more opportunities and demand across the board for services."

In addition, Freeman believes the program can help smaller, lower-level partners move up the ladder in their vendors' partner programs and sell more sophisticated solutions by adding enterprise-level services to the mix.

Freeman admits that applying ServiceBuilder initially will be tricky. After all, it's a novel approach to distribution and vendor service delivery.

"It's a new idea," Freeman says, "so we'll need to have the proper execution and find the right manufacturers."

As a result, CSG plans on targeting a small, defined group of vendors for ServiceBuilder. The company would like to be fully engaged with at least three or four tier-one manufacturers by the end of the year, Freeman says.

"I think we'll have our best success with vendors that want to grow their midmarket businesses," he says.

If ServiceBuilder succeeds, it could change the fortunes of VARs and vendors alike in the services game.