Services Offset Decline in Product SalesBy eChannelLine | Print
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The recession continues to put pressure on hardware and software sales. While this is bad for vendors like Cisco Systems and Microsoft, solution providers are findg more than enough work in professional services to make up the difference.
As toplines continue to drop, channel partners should be turning to service contracts to make up for some of that lost revenue, said the head of MaintenanceNet.
When it comes to service and maintenance contracts, it's money being left on the table. While that's bad enough in good economic times, in a poor economy, changing the focus of the business to capture more service contract dollars is something that can minimize the impact the economy is having. The channel is selling less product these days, and customers are looking to extend the use of already purchased products by another couple of years, explained Scott Herron, CEO of MaintenanceNet.
Topline revenue is dropping, and while selling services won't necessarily reverse the trend entirely, it can lessen the impact the economy is having on a partner's business, he said.
"It's easier to sell something into an existing customer, which we all know, but they're able to reach out to that customer with something that they're truly going to need at this time that's high margin and a highly sought after service," Herron said.