Channel Chatter: 10 Highlights From CRN's Solution Provider 500 Roundtable

Channel Chatter

At the 2013 Best of Breed Conference, held by CRN parent The Channel Company, CRN editors sat down with several of the top Solution Provider 500 members to discuss the latest trends, shifts and concerns in the channel. Here's what they had to say on a wide range of topics, including mobility trends, finding the right salespeople, and moving to the cloud.

Future Growth For The Channel

Harry Zarek, president and CEO of Richmond Hill, Ontario-based Compugen, No. 58 on the SP500:

I tend to be an optimist because I always look at things half full, and what I'm seeing is more customers understanding that there is a limit to what they can do on their own internally and wanting to look at people who can help them quickly move to the newer world of IT. And it's not only within the IT organization, but it's also in the line of business. I think we're all now very much in the heart of the machine, in the heart of the customer's business [in the midmarket]. They know they don't have the capacity to do a lot of the stuff that is coming at them and they really need a lot of help because there's a shortage of good, experienced people. And they're the ones that are moving quicker. Even the big ones, the large enterprise ones, they're slowly saying there's a limitation in what we can do ourselves, and I think it's good news for us.

Finding The Right Salespeople

Majdi "Mike" Daher, founder and CEO of Redmond, Wash.-based Denali Advanced Integration, No. 116 on the SP500:

We've had over 70 percent turnover, by design, this last 18 months from the sales guys we had to the sales guys we have today. And we're requiring them to be highly technical. So we've actually taken a route where we've hired a lot of manufacturer's sales reps from Cisco, EMC, those kind of guys because they are also technical and that's the kind of talent that we're attracting. Because we know the whole idea of, 'Oh let's just go take them golfing or whatever and go hang out,' that doesn't go anywhere.

Moving To The Cloud

Ron Dupler, president and CEO of Kittery, Maine-based GreenPages Technology Solutions, No. 154 on the SP500:

Three years ago when this [Best of Breed] Conference started, there was a lot debate around people making bets on where this market was moving and whether those were smart bets. I think today, it's clear where we have to migrate our businesses, so you can talk about ROI all day long, but if you're not making these investments right now, you're dead man walking. It's just how long it's going to be. You can ride your business for another three to five years, but it's going to be a declining business and you're going to have trouble attracting good people in a world where you don't have a lot to say about the cloud.

The Worst State To Do Business In?

Denali Advanced Integration's Daher:

In Washington state, it's the worst state to do services business in. I used to pay 2 percent of my services revenue back to the state, regardless if I'm making money or not. It doesn't matter. They just fought, and we fought, and I became a politician, pretty much, a lobbyist and everything else, and we dropped it to 1.5 percent of revenue. But I'm telling you, I am actively moving a significant number of our people from a managed services perspective and we're delivering out of the state of Texas; that's one of the reasons I opened up in Plano, actually. So government impacts us from an obviously taxation perspective.

The Massachusetts Software Services Tax

GreenPages Technology Solutions' Dupler:

It's an embarrassment, it really is. What they did for everybody operating in the state of Massachusetts is made a short decision with a very small window to implement, causing a bunch of people to scramble and say, 'How do we respond to this new tax?' It was very confusing when the message came out, and then what, a month later, they say, 'We were just kidding?' And now we have to go out and issue rebates to all the customers? I mean, it's an embarrassment.

The Changing Sales Approach

Compugen's Zarek:

Our experience is that it is a transformation. For many years, a great salesperson who had a great sort of schmooze appeal, a good relationship with customers, was fantastic. Today that doesn't really count very much anymore -- I mean they don't care for the donuts or the meals or the golfing. No one's got time for that. It's about what value can that person bring to the customer, can he inform him, can he challenge him, can he introduce him to something he doesn't know. So that type of relationship that the sales rep has is very, very different and there aren't a lot of people who have that. So that's a real challenge.

Size Matters For Solution Providers

GreenPages Technology Solutions' Dupler:

Right now -- and I think we all made the point in different ways -- we're asking the customer to trust us more than they ever have when we really begin managing their IT environments and that becomes important to the customer. You've got to be big enough where you've got credibility that you're going to be around. That's what becomes important.

PCs And Tablets

Compugen's Zarek:

PCs are a big part of our business. I agree, Windows 7 is driving it. Ultrabooks and Haswell is driving sort of a competitive offering to tablets. That being said, they're not all going to be Windows. I do think you're going to see multi-OS now in the business marketplace. Our view is we're so small relative to the size of the market that we can continue to grow that part of our business and so we're not concerned about it. Tablets are an opportunity, absolutely. Tablets and smartphones are part of the ecosystem we have to support.

Android Growth In The Enterprise

Denali Advanced Integration's Daher:

Android is a product that I myself thought was not going to enter the enterprise. Because there were a lot of barriers for it not to enter the enterprise because of security and all these things, but what's happening is there are these ecosystems that are straddling around it that are making it work inside the enterprise. Today, we manage 10,000 Android devices for one of the customers that we have.

People are underestimating where Android is. Even myself, when it comes to the client in the enterprise, there is a tremendous interest in Android and the enterprise, despite the stuff that people talk about -- security and how to manage it and all these things. I think it's putting a lot of pressure on the Windows ecosystem as well.