The New Form of Competition

Chris Pyle, president and CEO of Champion Solutions Group (No. 227 on the VARBusiness 500), says competition is now coming from an unlikely source: customers. In the past year, he has seen alliances between vendors and large end users that either take away or block opportunities for solution providers.

Case in point, he says: a major software vendor that worked with Ford Motor's corporate IT department to provide services to its supply chain and downstream dealerships. From a business perspective, the Ford arrangement makes sense. Ford has a massive IT infrastructure and large support department. Scaling those resources to provide support and integration services to the greater Ford ecosystem -- franchised dealerships, parts suppliers, financing companies -- isn't too heavy a lift.

"When you talk with enterprise IT departments, they say their customers are their lines of business. So arrangements like this aren't out of the question," he says.

And it's not an isolated incident. Pyle says he's seen three similar arrangements in the past year.

To draw a parallel, compare this to the media industry I work in. A decade ago, I was still a newspaper editor, and the Internet was in its infancy. My colleagues and I would debate what it meant to us. We saw numerous opportunities and challenges for using the Internet as an information-delivery vehicle. No longer would we have to wait for the daily print cycle to break news; we could be our competition at the speed we typed. And our corporate masters struggled to figure out how to leverage this new technology as a competitive differentiator.

No one imagined the competitive media environment we have today. Anyone with a PC is a potential publisher and journalist. Everyone from CNN to Google to solution providers are providing news services, newsletters and blogs. We in the media can no longer look at our peers as our sole competitors; we must also look at our readers and advertisers as potential competitors. The landscape is far more dynamic.

What Pyle has experienced is something to which we all must pay attention. Competition is coming from every angle and in every form. The future of the IT industry and channel may have to cope with myriad challenges --from freelance labor forces to multinational integrators to offshore solution developers to new product and services delivery models.

While this far more competitive world raises many more challenges, it opens numerous opportunities for those innovative and bold enough to take advantage.

Solution providers will have to look for new partnerships with one another, vendors and customers to satisfy the needs and desires of the market. Solution providers will need to develop new services that demonstrates their "value-add" status. And everyone will need to become far more flexible in the terms that they do business.

Competition is often a change mechanism. Will you heed the call?