Innovating Your Way To Profitability


Although many fans see the new networks as not much more than a way to annoy those around them with cellphones and laptop PCs, stadium connectivity is here to stay. And with Minute Maid Park -- and more recently, the San Jose Arena -- under his belt, Shaw's wireless business is off and running.

"I never planned to get into the business of wiring stadiums, but even if we don't do any more of them, this shows what kinds of things we can do, and help us expand into new areas," he says.

Some might say that IT innovation is back after a half decade or so of slumber, but the truth is that it never went away. After the Internet bubble burst, vendors and solution providers still innovated, but did so more around keeping costs down and revamping their business models to better enable them to survive the economic downturn.

In the past two years, true innovation has been back in full swing, particularly in fast-moving sectors such as security and voice networking. But the new solutions can create dizzying choices for VARs who want to grow their business but don't want to make a bad bet on a technology that might end up on the scrap heap. The truth is that there's no foolproof way to avoid this, but by employing a few key strategies, resellers may be able to make their gambles less risky and turn the newly adopted technologies into long-term revenue streams.

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Make Sure It's a Fit

These days, almost all solution providers have a security aspect to their business; it's an increasingly crucial component that touches upon all aspects of IT systems. This doesn't mean, however, that all solution providers are security specialists. Like any other technology, security specialization requires having the right people with the relevant skills. You can hone these skills through training to some extent, but most industry observers agree that hiring people who already have the desired skill sets is the quickest way to flesh out a new business unit.

When VARs do start out selling a hot, new product, it doesn't mean that they will be permanently moving into that technology area. Shaw says sometimes VARs have to walk away from what appears to be good technology if it doesn't fit their business long-term model. This comes up a lot with security technologies that solution providers add to solve a particular problem without trying to become full-fledged security resellers.

"It is hard for the owner of a business to walk away from a situation where it looks like you can make some money, but if it's no more than a one-off opportunity, you have to tell the manufacturer that," Shaw says. "You don't always have to say yes."

Look For Alternative Vendors

It's a widely held belief that the most innovative technologies come from smaller companies trying to make a name for themselves. Large vendors are preoccupied with hanging onto their market share to take risks, so it falls to less established ones to make the widgets or application that might put them on the map.

Companies like these often come up with brilliant solutions that are just what resellers have been waiting for their larger partners to produce. The risk for VARs in this scenario is multifaceted. Before taking the plunge on the new technology, they must ask numerous questions: