Thinking Out Of The Box Gives VARs, Vendors An In

If innovative technologies can be described as non-commoditized offerings that clients need but don't have, then things are looking good for many solution providers.

Stephen Leedy, a network administrator for Electronic Business Machines in Lexington, Ky., is feeling especially optimistic.

At CMP Technology's XChange Tech Innovators conference last week, Leedy joined hundreds of other solution providers who explored and discussed the new products, technologies and services that will increase revenue, profits, customer loyalty and incremental business. High on the list were managed services, VoIP, backup and disaster recovery; client-based Web monitoring; and voice, data and video convergence.

With most hardware margins in the gutter, Leedy realizes that now is the time to change his business. Lexmark International's Fleet Manager, a new managed services offering the Lexington-based printer manufacturer launched at the show, is a good starting point, he said.

"We're trying to make managed services our next offering. We think the recurring revenue stream will helps us out," Leedy said. "Fleet Manager seemed like something we could easily manage. This gives us a good, solid tool to work with. And we wouldn't get into something like this if we didn't think we could make money at it."

Fleet Manager, open to all Lexmark partners, includes free sales and technical training, operational support and customized sales and marketing tools, as well as free hosting through 2007. The package includes asset, billing, consumable, availability and optimization components and can be integrated with most major managed services platforms.

Overall, it's designed to increase solution providers' revenue and profit by helping them transition customers to digital environments; sell more toner; discover and track assets; proactively service printing devices; and generate recurring revenue streams.

"We're making sure our partners get the full benefits that matter to them," Paul Rooke, Lexmark's executive vice president and president of the printing solutions and services division, told solution providers at the launch. "This offers you opportunity and growth in the SMB and enterprise, opportunities to reduce costs and optimize fleets, opportunities to double revenue in key accounts."

Solution providers greeted the news with enthusiasm, saying they expect many similar vendor offerings during the coming months. Those innovations, however, pose a concern to some solution providers.

"It begs the question of how do we upwardly integrate all of those into our CRM and other managed services platforms," said Mitch Feather, vice president of Creative Associates in Madison, N.J., adding that the Lexmark application could spur him to offer more printing solutions, which his company does not currently focus on. "Every vendor is coming out with some managed service offering so you're going to be dealing with 10 of them."

Dan Wensley, vice president of partner development at LPI Level Platforms, an Ottawa-based developer of the Managed Workplace integrated service platform, said the key is to aggregate those disparate tools into a single dashboard.

"You can't look at these as a separate Lexmark, SonicWall, Cisco or Xerox tool," he said. "You need to manage those together through a single source. Our value is to enable solution providers to aggregate best-of-breed remote managed services and make them customizable on a client-by-client basis."

VARs said they are seeking more products and technologies that are both customizable and easily replicated, easier and faster to install, provide some type of sales exclusivity and generate deeper services. Vendors at the Tech Innovators show and throughout the channel are delivering.

NEXT: Products and technologies for gaining an edge.

"Our value proposition is reliability, scalability, flexibility, compatibility, ease of use and addressing implementation risks," said Ron McCabe, president and CEO of MiraLink, Portland, Ore., referring to the new MiraLink 400 and 4000 remote data mirroring appliances for small and medium businesses. McCabe also promised that when implemented with the right solution the appliances can help generate $3 worth of services for every $1 in product revenue.

Kerry Grimes, vice president of midmarket and global channel sales at UGS, Plano, Texas, introduced the Teamcenter product life-cycle management tool with his eye squarely set on innovative solution providers. "We're at the point where we want to broaden our sales, and these types of solution providers are the ones we have to partner with to achieve that," he said.

Grimes and other vendor executives said niche products like Teamcenter fit well in today's channel because they cater to a VAR's core competencies by giving them chances to sell more training and integration services, optimized workstations, sophisticated display and printing products, as well as to deepen client relationships.

"Solution providers are augmenting their businesses with innovations, not wiping out everything they did prior to that," Wensley said. "They're able to sell more hardware, more services because of new remote management and other types of software that help them to identify opportunities and justify those to the client."

Solution providers that successfully deliver innovative technologies say they follow specific processes to identify and carefully test the proper technology, target the appropriate markets and clients, choose the right vendor partner, maintain and monitor the solution and prepare it for a wider implementation.

For example, Birket Foster, CEO of M.B. Foster Associates in Chesterville, Ontario, which focuses on transitioning companies from Hewlett-Packard's RS 3000 server platforms to updated platforms, follows what he calls an NPOA, or New Product Opportunity Assessment.

"After we identify the product that we think will fit the client's needs, we ask how far along the product is in its life cycle; what's the profile of the current customer; what's our investment going to be, including how much will it take to ramp up sales and marketing," he said. "We ask about the vendor's terms around tech support. We also look to see how well we can integrate another vendor's product into it and what's the channel of distribution."

Vendors in emerging market are often new to the channel and lack the resources and knowledge of how to support their solution provider partners, VARs said. "You have to do your homework and due diligence to make sure the company is not running with rubber bands," said Howard Lubert, managing partner of SafeHatch, a Wayne, Pa., solution provider that focuses on VoIP. "No channel program will be successful from any company that can't implement and stand behind it."

Ryk Edelstein, president and CEO of Converge Net, a Montreal-based VAR with a niche 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," he said. "We're not a product mover; we're a solution provider. Whatever we've done has been in the name of innovation."

Even though Amit "Sunny" Sahni, vice president of Evron, Ontario, focuses on accounting and field services verticals, he says part of his sales process is taking a holistic view of his clients' needs to offer whatever makes sense.

"We always ask them what their costs are, what their pain points are and then offer them a solution that takes those away," Sahni said from the XChange show floor where he was impressed with Lexar's JumpDrive Secure II USB encrypted flash drives. "We'll manage their entire infrastructure for them through different applications and managed services."

Sometimes, however, innovation has nothing to do with technology and everything to do with how solution providers run their businesses and treat their customers.

"The most important element of innovating is listening," Foster said. "There is so much to learn from listening to your clients and they will help you to understand what other customers can use. If customers like and trust you, they will help you get to where you want to go."

Steve Harvey, vice president of sales at Adtran, a Huntsville, Ala., manufacturer of networking gear, also follows that philosophy. The company generated some buzz at the show with its Netvanta 7100, an all-in-one networking appliance with optional VoIP capabilities and also released some details of its upcoming channel partner program. Both product and program were based on suggestions from solution providers and end users.

"There are all kinds of areas that can help solution providers and their clients innovate," said Harvey. "Technology is just one of them."

NEXT: A rundown of some new, innovative gear.

STEPPING UP: NEW GEAR TAKES CENTER STAGE

In between the panels and networking opportunities at the CMP XChange Tech Innovators conference, solution providers took time to talk up several new products.

1. Adtran's NetVanta 7000 series IP PBX: Described as an "office in a box," the 7000 is aimed at small businesses and includes an IP PBX, voice-mail, auto attendant, router, 24-port switch and VPN firewall. The company also plans to roll out a comprehensive channel program by year-end.

2. Great Bay Software's Beacon: The Beacon system uses end-point profiling to identify all network-attached end points by type and location for the deployment and management of authenticated networks.

3. MiraLink's 400 and 4000: The series provides realtime data mirroring and disaster recovery, while meeting legal compliance needs.

4. Lexmark's C530 series: Lexmark's new Fleet Manager printer managed services program stole most of the thunder, but the company did introduce its new line of color laser printers—scaling from small businesses to the enterprise—with faster print speeds and higher color performance than earlier models.

5. HyperOffice: The developer of hosted e-mail, document management, file storage and online scheduling applications is now trying to build up a channel program. The suite is fully customizable and generates recurring revenue.

6. Lexar: The company recently released its JumpDrive Secure II USB flash drives with encryption. Amit Sahni of solution provider Evron swears he can sell a ton of these to his accounting and other vertical customers.