Tomorrow's New VAR

The channel's next generation won't call themselves VARs. They won't call themselves solution providers. They may even reject the technologist moniker. Microsoft channel chief Allison Watson doesn't quite know what to call them, but she sees the next generation as more akin to online marketers and advertising agencies. "The whole world is moving to influence, while reselling still happens," said Watson in her first channel interview in months.

Lawrence M. Walsh is editor of VARBusiness and GovernmentVAR. He also writes the Tidal Waves blog.

All this year, VARBusiness has been working on its Channel 2.0 project, talking to VARs, vendors and industry-watchers about how the channel will evolve over the next five years. The way Watson sees it, two channels will operate in parallel: the traditional reseller/solution provider channel and the new breed of VAR that acts more as an influencer and evangelist of technology and services.

"Traditional VARs may be relegated to the back room because [companies] need to cut costs and [these players] don't add value," she said. "We have young, smart people who have skipped this entire generation of infrastructure."

Think about it: The evolution of services isn't just about remote management of infrastructure; it's also about the delivery of applications. Reflecting on Microsoft CEO Steve Ballmer's remarks that Vista would be the last major software launch, Watson explained that software vendors have to become more agile, providing upgrades and feature sets as they become available. The advent of software-as-a-service, or SaaS, makes those updates more transparent to the end user.

Following last year's unveiling of Microsoft Live services at the Microsoft Partner Conference in Boston, many solution providers asked what role they would play in delivering services. Even though Microsoft showed three paths to market--reselling, referring and selling direct--traditional solution providers didn't see the immediate connection to their existing businesses. Following Watson's thinking, it's probably because there is no connection yet.

Just as Salesforce.com is demonstrating that SaaS still requires the support and collaboration of the ISV community, Watson sees a new class of solution provider that will enable and support software services through purchase influencing, configuration management and add-on support.

One of Watson's prime missions is finding ways to build programs within the Microsoft channel to support these new upstarts. But what about the existing channel base?

"The good ones will be as busy as they've ever been," mostly since the need for product sales and support isn't going away, Watson said. But a key difference between the VAR of today and the solution provider of tomorrow is the approach to the customer. Since the advent of the channel, solution providers have evolved from mere resellers to systems developers, then to service deliverers and now to managed service providers.

While the channel of the past responded to client problems and pain points, following a reactionary model, the future channel will be about helping customers better understand their businesses and enabling them to grow. As entrepreneur advocate Carl Schramm of the Ewing Marion Kauffman Foundation said, "When everyone has access to the same technology, the technology has no value."

The challenge for the channel as it moves through this evolutionary period is making technology a competitive advantage for their customers. "We need to leave customers' pain points and focus on customers' gain points," Watson said.

And Speaking of 'Gain Points'
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