Changing the Channel

By Pedro Pereira  |  Posted 2007-03-23 Email Print this article Print
 
 
 
 
 
 
 

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Opinion: There is so much change going on in the channel, though some of it is subtle, that two years from now it will be a different place.

If you've been around the channel long enough, you'll recognize those times when the scent of change becomes so intense it is hard to ignore.

We are at such a juncture.

New channel models are emerging, vendors are adjusting their attitudes toward partners, technologies previously out of channel reach are no longer so, and consolidation shows no signs of stopping.

Not all of the change is necessarily good. Vendor consolidation has its downside, as it tends to reduce choice and cause disruption in partner relationships. Consolidation in the channel also carries potential ill effects for companies that grow too big too fast.

But most of the change taking place is positive, or at least neutral.

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Distributors, whose main function is to handle the logistics of stocking and moving inventory, have been looking inward to figure out what they can do to complement their core mission and help VARs and integrators redefine themselves to keep up with the changing needs of their customers.

This is why we see Ingram Micro and Bell Microproducts launch managed services programs, or, as in the case of Ingram Micro, outsourcing marketing services to VARs and integrators. Ingram Micro and Tech Data also are looking into implementing hardware as service programs that make it possible for solution providers to put their customers on fixed-fee plans not only for software and services but also for equipment.

Goading leasing and finance companies to embrace hardware as a service has proven a challenge, as attested by intrepid solution providers that have been looking at ways to adopt this model of selling hardware.

Accounts of these providers' experiences will feature prominently in a comprehensive analysis of the hardware-as-a-service model that we are planning for the April issue of eWEEK Strategic Partner.

New approaches to doing businesses, such as remote monitoring and management of customer networks, are creating new types of companies that make the channel a more dynamic—and yes, complex—place.

We see providers such as Do IT Smarter, of San Diego, and MSP on Demand, of Hickory, N.C., adopt hybrid business models that borrow elements from vendors and distributors and combine them with the business of providing solutions.

Do IT Smarter has effectively set itself up as a distributor of managed services, creating a layer between its provider partners and vendors such as SilverBack Technologies, MX Logic and SonicWall. Do IT Smarter hosts the vendors' technology, offering its providers a palette of on-demand services from which they can pick and choose.

MSP on Demand created a hardware-as-a-service package that it sells to other providers for $1,995 to $5,995 with tools to guide them through the adoption of the model.

Meanwhile vendors are getting wiser about how to partner. Many have realized they have to invest in partners to help them succeed, rather than simply making quota and loyalty demands. According to Amazon Consulting, a number of vendors this year are evaluating their partnerships, creating profiles of their solution providers to figure out what types of investments they need to make going forward.

Microsoft is looking at how to reward the influence of SMB-focused partners in sales that these partners do not close but play a role in steering customers toward the vendor's technology. It is a practice IBM already employs and is planning to refine.

Some of the ongoing change in the channel is gradual and subtle, creating the effect that not much really is happening in a particular area. But when you take a step back and observe all the moving parts from a distance, you get a sense of the interplay between them and the overall effect. Two years from now the channel will be a very different place.

Pedro Pereira is editor of eWEEK Strategic Partner. He can be reached at ppereira@ziffdavis.com.

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