Asking For Assistance

Amid consolidation and convergence, the once-tiny reseller is finding that, despite its size, it's no longer perceived by potential customers as a mom-and-pop shop. In fact, the majority of solution providers (64 percent) say they turn to partners to overcome resource limitations, gain technical expertise and work on larger-scale projects, according to SOM research.

It's no longer so much about market share as it is about efficiency and net profit, concurs John Sheaffer, CEO of Sysix Technologies, a Westmont, Ill.-based business technology solution provider.

"The smaller resellers are getting bigger and are moving into the consulting side," he says. "This has created a different class of reseller,a true solution provider. These new solution providers need to differentiate themselves with value-based offerings, such as 'productized' services solutions...Today, successful VARs will sell business benefits vs. selling technology."

As for whether to partner for or subcontract to provide services in demand, the decision should be born out of a candid self-assessment of a company's capabilities. Recognizing what are and, even more significantly, are not the company's core competencies should dictate the path.

"Some organizations' core is in selling IT services, but they are not good executors," says Oli Thordarson, president and CEO of Alvaka Networks, a Huntington Beach, Calif.-based network-management and security company, and chairman of the Global MSP Network, a consortium of managed service providers. "Others are great at performing the services, but not at selling. Others have gaps in what would otherwise be a full-fledged complementary set of services," he says. "When companies like these get together, they can have real positive synergies that are great for the customer and for the bottom line."

According to the SOM survey, application development is the top service solution providers (46 percent) say they partner for or subcontract. That service is 14 percentage points ahead of a four-way tie between B2C e-business solutions; hardware/

software integration; LAN/WAN design and configuration; and Web hosting/site development,all cited by roughly one-third of SOM respondents. Software support nips right at their heels at 32 percent, according to the survey.

Despite the wealth of independent subcontractors, a VAR must proceed with caution in any engagement with a partner or subcontractor, some say.

"There are a lot of independent subcontractors today," says Michael Tsontakis, vice president at Eisner Technology Solutions, a New York-based systems integrator and ASP. "While that can be beneficial for short-term needs, the service is difficult to control from a quality standpoint. It's also not sustainable as people tend to move on quickly with the changing economy," he says. "It's analogous to the contractor who eagerly finishes the work on your house in slow times, but during boom times, either doesn't finish your patio or doesn't return your calls for a new estimate."

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