Easing Customers Into Innovation
"The earlier a VAR adopts a new technology, the greater the margin because there is less competition," said Lubert, managing partner of SafeHatch, a solution provider in Wayne, Pa. "As a product or solution becomes a commodity, it becomes less valuable."
In the spirit of the technical innovation, and on the eve of CMP Media's XChange Tech Innovators conference next week in Huntington Beach, Calif., Lubert and other solution providers offered tips on how to ease the transition to new technologies -- for their staff and customers. Some key steps, they said, include choosing the right vendors, discussing proposed solutions with key clients and carefully testing any solution in-house before rolling it out.
SafeHatch's latest offering, for example, is a managed VoIP solution for small businesses. As with any new solution, Lubert and others said the first step to success is choosing the right partner. SafeHatch relies on Irvine, Calif.-based Broadcom for its communications hardware and software.
"You have to find a vendor that can actually implement, maintain and stand behind its channel program," said Lubert, who provides managed VoIP solutions to about a dozen small businesses and has about 15 more in the pipeline. "That sounds obvious, but it was a problem with VoIP providers because many come from the telecom industry, where the concept of a solution provider was an agent who typically worked for a one-time finder's fee."
More vendors, especially those new to the channel, are realizing that solution providers offer a lot more than customer information.
"They recognize that a properly installed solution requires remediation of the network, client hand holding, training," Lubert said. "We're not only the clients' trusted adviser, but we also provide the vendor with feet on the street and can reach out and touch the client."
Solution providers working with innovative or new technologies said they often look for vendors whose products aren't overdistributed and offer some type of exclusivity to ensure higher margins.
Birket Foster, CEO of M.B. Foster Associates in Chesterville, Ontario, focuses on upgrading companies' Hewlett-Packard's RS 3000 server platforms. He follows an NPOA, or new product opportunity assessment, to evaluate new products and vendors. The process ensures that Foster Associates asks a number of important questions to solidify a successful partnership. Key questions in the assessment include the following:
• How far along is the product in its lifecycle?
• What's the total investment, including the cost of ramping up sales and marketing?
• What are the terms of technical support, especially if the VAR prefers to offer as much first-line support as possible?
• How well does the product integrate with other products?
• What's the distribution strategy?
After solution providers address those issues, it's important for them to interview key customers about the total solution concept, according to Foster.
"The most important element of innovating is listening," Foster said. "There is so much to learn from listening to your clients, and it will help you understand what other customers can use. If customers like and trust you, they will help you get to where you want to go."
To maintain long-term customer relationships, Ryk Edelstein, president and CEO of Converge Net, a Montreal-based VAR specializing in compliance solutions, makes sure all new offerings are tested in the company's in-house lab before rolling them out.
"We do that for proof of concept, internal training, fault analysis and long-term support. We're not going to support a product blindly," Edelstein said. "We're not a product mover; we're a solution provider. Whatever we've done has been in the name of innovation."