Analysis: Convergence Trends Change the Way VARs Do Business

It's no accident that the top three spending priorities among midsize firms for the coming 12 months are security, networking infrastructure, and backup and disaster recovery. As solution providers are discovering, these areas are converging more and more all the time.

According to the 2006 VARBusiness Market Insight report, 49.2 percent of midsize companies ranked security infrastructure as their top spending priority in the coming year, followed by networking infrastructure at 45.8 percent, and backup and data recovery at 45.5 percent. The next-highest priority was another security-related field, regulatory compliance, at 33.2 percent.

These rankings show how closely security, networking and storage technologies are linked. The market agrees. From Symantec's merger with Veritas in 2004 to the more recent EMC-RSA deal and networking kingpin Cisco's numerous security-related acquisitions, vendors are realizing that you can't have expertise in just one of these business-critical technologies.

The convergence trend has solution providers adjusting their own business practices, often with positive results. Incentra Solutions, a provider of security and storage solutions in Boulder, Colo., debuted at No. 347 on this year's VARBusiness 500 list, largely because of the way it anticipated the convergence boom.

"We were doing well with storage, but we realized we were missing out on a significant part of the market," says Incentra president and CEO Shawn O'Grady. "If the customer wasn't interested in managed storage, we didn't have much to talk about, so we got into the systems integration business because it was a good opportunity to leverage our existing expertise."

Although getting into a new technology area might also require solution providers to get new certification training, going the services route may help them bypass that step.

"Because we do managed storage remotely, we've developed extensive networking and security expertise," O'Grady says. "Most of our employees are very knowledgeable about all the technologies, and when you're doing managed services versus reselling products, certifications aren't as important."

The blending of security, networking and storage technologies is so prevalent--and the regulatory issues around them are becoming so comprehensive and stringent--that VARs in any one of those spaces may have no choice but to get into the other ones as well.

"Information protection is much broader than traditional backup and recovery, so this is a super opportunity for VARs to sell solutions for software, hardware services and support," says Glenn Groshans, senior director of business operations and alliances at Symantec. "[A lot] of our security guys are working with storage now. People are tuned into the fact that you have to plug all the holes, and compliance requirements are a huge driver of that."

---

Read more articles based on findings from the VARBusiness Market Insight Report.