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For some solution providers, the problem for many VARs isn't so much video hardware margins evaporating as it is they've failed to understand that video, for the channel, is now a services game.
"We have not been a box sell, and I know a lot of Cisco's sales model is push the box: they work with reseller partners, and they cut the margins very low," said Bin Guan, CTO at York Telecom, an Eatontown, N.J.-based solution provider. "So there's a lot of people pushing the box, but there are a lot of customers who don't fully understand how to use the system. There is still expertise needed."
Guan's argument was shared by a number of veteran video VARs: don't blame Cisco and it's narrow-margins approach for the fact that you haven't converted your video practice into a services piston.
"There is a lot of money in services in video, and that's got to continue for the health of channel partners," said Annese's Healy. "The phrase we've been using is 'margin pressure,' which will begin immediately, and it's going to be problematic for partners to reach a good services model if they don't have that already."
Beyond basic integration, Healy and Guan cited hosted video conferencing, advanced integration with UC communications and data center infrastructure, and other services, from managed to maintenance, that can help solution providers develop a compelling video practice.
Moreover, solution providers still offer a value-add between truly integrated, truly secure video services and a collection of video end points with a pipe in between.
Skype, for example, may be a powerful force in the consumer IP world, but for many businesses, video communications for employees and Skype are two very different things.
"A lot of businesses, especially in the size we deal with, immediately discredit something like Skype," said Dane Martin, principal consultant at Dimension Data. "They say: it's in the cloud, we have no control over it, we're a huge organization and we don't want to delegate too much to our user community. It might be a conversation starter, but for our customers it's about providing a consistent experience, with operational support. The bigger the company, the more process and control they have in place, and the more security."