CDW's Game Changer

It is not overstating it to say that if CDW does it right and gains the trust of a good chunk of the 150,000-plus solution providers and consultants rearchitecting businesses of all sizes, the program will forever alter the channel landscape.

In this week's cover story and accompanying interview with CDW Chairman and CEO John Edwardson, CRN Industry Editor Craig Zarley examines what CDW is calling its SolutionsEdge program, which granted is still only a pilot. Make no mistake: CDW is serious about converting some of its fervent channel competitors into CDW partners.

The CDW proposition is simple: offload huge costs associated with low-margin product business and put this money to good use in the highly profitable services segment"where VARs are already making the lion's share of their profits. For solution providers, the program is about getting rid of perennial product pricing, shipment and delivery headaches, opting for an agent fee and focusing 100 percent on delivering mission-critical IT services.

There are big risks and big gains in CDW's proposition. Each partner will have to decide what works for them. The upside is the ability to partner with a multivendor selling and logistics powerhouse in a new business model that could clearly drive more services revenue. The downside: CDW could end up changing the terms and conditions of the agent model, granting solution providers a shrinking piece of the product business or, worse yet, cutting them out altogether. Of course, that risk is no different than that posed by an agent program from any vendor.

The CDW SolutionsEdge program sets up what can only be billed as the ultimate showdown: CDW vs. Dell, or Freddy vs. Jason. The two longtime antagonists are slowly but surely courting the channel. Both CDW and Dell see some of the steam running out of their beat-all-comers-with-the-lowest-price product game. IT solutions are delivering solid return on investment and in turn are driving the industry forward. Both CDW and Dell want a bigger piece of this. Whether they will get it depends on how well they proactively partner with solution providers in a wide-reaching, clear, visible and forceful manner.

What do you think of CDW's new proposition? Let me know at (781) 839-1221 or via e-mail at [email protected].