In an age of squeezed margins for IT hardware sales, everybody is
looking for higher-margin value they can add to the deal, whether its
integration, services or even software as a service.
And one road that some VARs are traveling down to boost margins is
partnerships with ISVs (independent software vendors). It’s value that
resonates with end users who are increasingly looking for complete
solutions rather than single components of overall solutions.
“Customers we deal with are frustrated at the lack of cooperation
between hardware and software vendors,” says John Cannington, CEO, of
@hand Corp., a company that provides enterprise applications for
handheld devices in primarily industrial and energy industries.
Cannington served as one of the panelists talking about collaboration
between VARs and ISVs and how such partnerships can pay off for both
parties. The panel discussion was offered at the VSR Business
Optimization Summit in Philadelphia this week.
“We are educating our sales force on the various types of our hardware
our software gets deployed on,” says Cannington, who previously worked
at companies such as J.D. Edwards. “I’ve long avoided being in the
hardware business, but I want to actively partner in it.”
And that partnership is likely to help the VAR as well, he points out,
saying that his biggest customer just bought 5,000 handheld hardware
devices.
That’s a message that has resonated with Jeff Weidler, president of
WineWare Software Corp. as well. Weidler’s company provides software
for the tasting rooms of vineyards so that they can sell and ship wine
to visitors’ homes. But without a hardware component, the solution was
incomplete.
“Our missing solution was POS,” he says, and his company partners with
pcAmerica to provide that element. David Gosman, CEO of pcAmerica also
sat on the panel, and says that customers are more likely to go with
companies who partner because they don’t want to shop around to several
places to find hardware and software that works together.
As always, when partnering with a software vendor, solution providers
are likely to be cognizant of the potential for channel conflict.
Cannington freely admits that his company has both direct sales and
channel sales. Bigger customers like to buy direct from the company and
integrate solutions themselves while mid-market customers prefer the
kind of one-stop-shopping that solution providers can offer.
Cannington recommends that solution providers ask ISVs how they pay
their own sales reps and how they pay their partners and how they go to
market.
“There will be strategic partners,” he says, noting that some companies
just make better partners for each other in the long term, while other
deals may be one-off deals.
How can VARs find the right ISVs as potential partners? Mark Brown,
vice president of marketing at Lowry Computer Products, a solution
provider, says that he relies on distributor BlueStar to act as a
matchmaker.
Cannington recommends VARs decide what business they want to be in and
then ask customers who they are working with. Another strategy is to do
a Google search, he says, because the most savvy ISVs will make sure
they have good Google listings.
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