Insight Eyes VARs In SMB Bid

The company has built a services infrastructure in five areas—security, storage, printing, mobility and IT management—to target end users with 100 to 2,500 employees, said Insight CEO Rich Fennessy.

Insight, which inherited a strong enterprise services business when it bought midwest regional integrator Comark in 2002, plans to partner with national service providers and local VARs to deliver the services, leveraging its own enterprise integration capabilities to serve as developer and project manager in small businesses and midsize accounts, Fennessy said. "Our classic value proposition is price, availability. The focus now is partnering with a client to help them solve a business problem," he said.

Insight is investing $1.5 million to retrain its sales force to address SMB customer issues as opposed to pushing products. Its marketing budget has increased to $20 million from $13 million to get that point out, Fennessy said.

Insight, Tempe, Ariz., currently partners with about 40 companies to deliver services to customers, said Mike Yates, director of service development at Insight Services, a division of Insight. The company does not have a specific number of partners in mind, he said.

Insight has 13 branch offices in the United States where local relationships with VARs will be fostered, Fennessy said. "If the opportunity is broader than local needs, we will tap into someone who has nationwide capability. Otherwise, we will do a lot of work with local VARs," he said.

Insight pays "millions of dollars every year" to services partners on the enterprise side, Fennessy said. When it comes to serving smaller customers, the company will choose large service providers or local VARs depending on the scope of the work, he said. Preference will be given to solution providers that buy products from PC Wholesale, Insight's distribution arm.

Insight will rake in most of the revenue for the design and engagement part of projects, passing on fees to partners that deliver on various aspects of the engagement, Yates said.

One area of specific need is security experts, he said. "We are particularly interested if they have experience in regulatory compliance, penetration testing, repeated vulnerability testing. In those areas, there is good margin to be made for everybody," he said.

SMB solution providers took the news in stride, noting that CDW and PC Connection also are trying to provide services to SMB customers in tandem with VARs through their SolutionsEdge and ServiceConnection programs, respectively.

Insight's success with SMB services will hinge on the relationships it builds at the local level, said Joe Balsarotti, president of Software To Go, a Clayton, Mo.-based solution provider. "The problem up until now [with national companies servicing SMB customers] is you never know who will show up the next time. That's not how small business works," he said.

Darren McBride, president of Sierra Computers and Training, a solution provider in Reno, Nev., is skeptical that Insight can make its partnership proposition attractive enough. "My concern is that these big corporations never structure things as a win-win. If my normal billable rate is $150 an hour, I am not interested in them contracting with me for $80 an hour," he said.

STEVEN BURKE contributed to this story.