Our list of the most innovative executives of the year spotlights the people that are pushing the envelope with new products and channel programs to bring solution providers to new heights.
Find out which executives made the grade and held their own, despite the great IT downturn of 2009.
Most everyone loves Thanksgiving turkeys. But IT industry turkeys? Not so much. We look at 10 examples of 'turkeys' that have disappointed the tech industry this year.
CRN and the power of a world-class editorial team that drives more and better content on issues that matter to you is, and always will be, a key element. The editorial team spreads out across the industry every day and unearths relevant content that you absorb through print, video, online, mobile and any other distribution mechanism that makes sense. We ask questions and see things no one else sees because we are the only company focused solely on sales channels.
But to truly serve the need to accelerate technology sales on the part of solution providers and vendors alike we have added hundreds of other capabilities. Let me touch on a few of the bigger services you may be able to take advantage of.
We drive demand. You may not realize it, but thousands of solution providers are knocking down sales by using our demand-generation capabilities either through direct engagement with us or through vendor partners. We believe we generate and deliver better and more qualified sales leads than anyone in the business, and we are doing it every day in North and South America as well as in EMEA. Much of this work is on behalf of the top manufacturers in the market, which take our leads and redistribute them to their top partners. We also build custom lead-generation programs that solution providers use MDF to pay for, and offer database management services, custom events to drive demand, telesales, etc.
We recruit the right solution providers and match them with manufacturers that have a product and program that fit their business model. We know solution providers' needs and capabilities, and top-tier manufacturers often ask us to find the right partners for them. But we don't stop there. Once we have the right match, we help solution providers ramp up on the vendor's products and programs.
We build custom content for education and other uses. We have a large education business here for solution providers looking to build better businesses but also for manufacturers that need to teach their channel-facing employees how to execute in the market. Beyond that, we are building custom Web sites around specific topics for manufacturers attempting to help partners understand how to build sales practices in vertical arenas. We can do this because we know content and we can customize and deliver it in whatever form needed.
To finish, let me list some other things we can do: Event management; database cleansing; list rental; sponsored communities; online micro-sites; partner program development and other consulting services; partner benchmarking; competitive partner program analysis; partner capacity planning; advertising services both online and print; deal-registration services; Webinars; virtual online trade shows both custom and open market; live events for solution providers and end users.
In the end, Everything Channel is designed to help solution providers and manufacturers execute in the market. If you need more information, drop us a note at getinfo@ec.ubm.com.
I'm not against VARs getting an understanding of customer satisfaction levels. In fact, I believe they should do more to understand the customer and its perception. Fact is, we here at Everything Channel do lots of perception studies, so I understand their validity and benefit.
The trouble with Microsoft's approach is that it's highly unlikely to return much usable data.
What Microsoft should be surveying for is the total customer experience through its channel partners when its products are included in a solution.
Given where the future computing model is headed (I'm talking cloud computing), it's going to be a lot more important to understand the total customer experience in a solution sale than it will be to understand customer satisfaction levels of a VAR.
Let me use myself as a far-too-simple hypothetical example but one that will illustrate my point.
I have a Lenovo Reserve Edition laptop that I own personally. It's a wonderful machine encased in a leather cover with wonderful support. Trouble is, the operating system is Microsoft Vista. If I were to be surveyed as to my satisfaction with the reseller I obtained the machine from, it would score highly. Ask me about the hardware itself and I also would be raving. If I were to be surveyed about the total customer experience with this product, however, it would result in much lower satisfaction numbers. Those numbers would be dragged down exclusively because of Vista. I don't need to go into all the reasons why Vista is an ugly dog because we all know them. We can only hope that Windows 7 is dramatically better.
So my total customer experience here is abysmal because of a single element that makes up the total experience -- that's important to note.
I'm not arguing that it isn't important to understand how solution providers perform in the market. In fact, if a VAR consistently falls short any vendor ought to think about the value in working with that partner. If all Microsoft is trying to accomplish is development of a system that will weed out partners, then perhaps it should proceed.
But if what it really wants to do is understand what is happening in the market when a Microsoft product is baked into a solution -- and how it can be sure that all the gears that must mesh to result in a great customer experience are well-oiled -- then I think it needs to look at this a bit differently.
So here are a few suggestions: First, Microsoft needs to state clearly what it wants to accomplish over the long term. If that is trying to determine which portions of its partner base are poor performers, then say it and expect to take some heat.
If what Microsoft wants to do is help partners determine what they can do to improve their customer satisfaction levels, then it should develop an ongoing system that regularly and specifically surveys the VAR's end user base about the VAR's interaction with the customer.
But if what it really wants to do is determine the real skinny as it pertains to the entire engagement and experience a customer feels, then I think it needs to go after the total customer experience. That will also give it some benchmark data it can use for comparison as we move further along the path to cloud computing.
BACKTALK: Make something happen. Robert Faletra is CEO of Everything Channel. You can contact him via e-mail at robert.faletra@ec.ubm.com.
But regardless of when cloud computing will be the dominant delivery of computing resources, it is going to reshape much of what we know today over the long term.
The groundwork for cloud computing has been set by all the trends of the past -- most recently the managed services play. Many businesses and even home users have been using cloud applications for years. Salesforce. com is a good example as are any of the mail or banking applications that home users boot into daily.
But cloud computing, or the ability to simply purchase more computing power much like we buy electricity today, is the future step and is going to require many different approaches to sales models both direct and indirect. Today we readily use cloud applications; the future claims are that we will one day hook into the big computer in the sky and satisfy our computing needs just as we hook into the electric grid today.
This movement will spawn new competitors and kill off some old ones. The reason Cisco is picking a fight with HP and IBM while entering the server business is because it sees itself having to be a more complete solutions answer in order to deliver in the future cloud era.
Some new suppliers are already emerging, Amazon being an example of a company with vast computing resources it has opened up to others beyond its firewall. What's Google thinking long term?
There is certainly going to be a remaking of channel programs as we move through this in the coming years. Already the value and role of distribution is being questioned -- as if we haven't heard that before. Certainly the channel as a whole will face pundits claiming it is going away in the cloud era—again I've never heard that prediction before. But, realistically, there are some core business challenges that need sorting through. Here are some of them:
How does a vendor stay relevant when its products are sold as a part of a utility that carries another brand and is sold by someone else?
If all I need is a connection to the broadband pipe -- be it hardwire or wireless—to get access to whatever computing power I need, will the Telcos be the real winners?
Will all suppliers to business and home users need to have a cloud solution or risk being disintermediated by those that may not have best of breed but do have a cost-effective bundle?
If we are headed toward a world where most distribution will be in the form of digital property and a declining amount of physical distribution of product, what is the role distribution will play and will it force consolidation of the category -- especially outside of North America?
How do today's channel program elements help or hinder the movement and how do they need to change?
In the end, as always, this is a long-term trend that may take more than a decade to be realized. But it's hard to argue that it won't play out in some fashion or that there are not going to be many changes and challenges over the short and long term as a result.
BACKTALK: Make something happen. Robert Faletra is CEO of Everything Channel. You can contact him via e-mail at rfaletra@everythingchannel.com.
We are now at that breaking point and unless we begin to see some real economic improvement we are going to see really difficult times in the next few months for partners.
The recent example of the MIS Group, a Sage partner of the year two years running, shutting its doors is not a good sign.
I'm having far too many conversations with partners and vendors alike where cash flow issues in the channel are coming up as a growing problem.
In some cases partners are closing deals and then having difficulty getting the financing to pull them off.
The only reason this hasn't become a bigger issue is that the credit available through distribution and the vendors has been holding the tide back. With earnings season upon us it's obvious that there is not a lot of improvement. Even in those cases where suppliers are reporting improved profit it's generally a result of cost cutting, not revenue growth.
With a difficult economy showing no real signs of improvement and an unemployment rate heading toward double digits, are you expecting things to rapidly improve? Of course not.
Some solution providers I've talked to recently believe they can get through the next three to six months in the current economic environment, but if it goes much beyond that they are not sure. Others are, of course, well-financed and fine.
This scenario means we are headed toward a period in my opinion where a lot of vendors are going to find their partner base is out of balance. There has been a lot of emphasis on getting more from better partners over the past few years and not enough effort on purging, recruiting and refreshing channel makeup.
Take the MIS example. When your partner of the year two years running goes out, that partner had to be sitting in the 20 percent area we all refer to when we talk about the 80/20 rule. What this goes to show you is that vendors' best-performing partners are not always financially sound.
And direct marketing resellers are being particularly hard hit given the dependence on hardware and not solution sales for this category of partners. Customers are still saying if it isn't flat-out broken we are not replacing it.
For solution providers the trick to remaining solvent during the six to 12 more months it is going to take to see real improvement in the market is going to revolve around cash flow and managing costs. Your distributor is a key element in this but so too is the vendor lineup you represent and whether those vendors are helping with creative cash flow enhancement deals that allow you to stretch payment on deals sold.
For vendors navigating the playing field, it is going to get more difficult. It's always about having the right partners and the right capacity in the right places not only in North America but around the world.
That's a big task in a stable market but as we see more bankruptcies, consolidation or the inability of solvent partners to close some deals because of the financing needs, more work is going to have to be done around maintaining a balanced channel.
My opinion is this is going to force vendors to get deep into the weeds around channel financial stability and it will spark a larger effort for many of them in recruiting.
There is going to be a major change to the health-care system in this country. The Obama administration is committed to dismantling the current system in favor of a government-controlled health-care plan. With the Democrats firmly in control of all branches of the federal government, there is no stopping it.
So it's time to think about whether you want to try to benefit by the shift.
First realize that there is going to be a lot of government money thrown around, much more than we will be led to believe. Anytime the government gets involved, it costs more than expected. The government drug program instituted under the Bush administration was supposed to cost $200 billion a year, and it has already ballooned to $600 billion.
The $650 billion being touted as a down payment to get the government-controlled health-care system rolling is going to be chump change before the feds are finished. We are talking trillions of dollars here annually once it gets rolling. Whether you are for or against government-controlled health care, there is going to be a lot of money spent on this. All of your vendor suppliers will be chasing this, so why not join them?
There is no doubt in my mind that once the government controls the health-care system it is going to force the digitization of health-care records, forms, payments, etc.
The government-dictated health-care IT network is going to become enormous but, more importantly, it is going to be regulated. And we are talking recurring revenue, being generated backed up by the full faith and resources of the U.S. government. That's some sugar daddy.
So how do you get ready for this?
First, if you haven't built a health-care practice yet, get moving. There are lots of specialties/niches to choose from, so spend some time exploring. Once you've decided on a concentration, look to the vendor community to help you access the right solution stack. Government control will likely mean government standards, so you will need to watch this unfold and pick vendors that are on top of the changes as they come down from mountain (oops, I mean Capitol Hill).
Get better at financing and cash flow management. The reason for this is simple. Government bureaucracy and speed are not synonymous, so you are going to be looking at receivables being stretched out. It may make sense to explore a relationship with banks and other financing organizations that purchase receivables. You'll take a margin hit, but your cash flow will be consistent. Vendors will be willing to help but that comes with a different price -- including required minimum attach rates of the supplier's equipment.
I hate to say it, but you are also going to have to "get connected" politically. Government control is anything but innocent. Having the ability to get your local congressman to place a well-timed call to a particular government body or private entity that depends on government approval to shake something loose can't hurt you.
Lastly, if you have any elective surgeries you have been putting off -- like a little bit of work on that knee or perhaps a hip replacement -- it's best to get that out of the way this year before the government waiting list gets too long. (I figured I'd throw out that last true statement to generate some hate mail, so have at it.)
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