VARs Find Strength in NumbersBy John Hazard | Posted 2005-11-22 Email Print
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Separately, the small Southern California VARs had trouble getting vendors to pick up the phone. Together, they have them coming to them and on their terms.
A little more than a year ago, Jim Locke, president of J.W. Locke and Associates LLC, had trouble just getting past the call center at Sonic Wall, a vendor with which he sold small-business backup and security solutions.
Locke had been a partner for several years and had a good relationship with the SMB (small and midsize business) security vendor, but as a one-man operation selling to businesses with fewer than 50 seats, J.W. Locke and Associates, of Pasadena, Calif., barely registered on Sonic Wall's radar screen.
Just beyond a year later Locke has serious clout with the companyaccess to sales executives when he needs it, market development funds and a 10 percent discount on Sonic Wall's product lineand he hasn't added a single employee or larger clients.
By leveraging the combined membership of a VAR group, the Small and Medium Business Technology Network, which he helped found last year, Locke and other members speak for more than 250 VARs and some 2,800 customer accounts when they interact with vendors.
"When we pick up the phone now, it's not like we're the little guy. We get calls back from high up the food chain, we get sales representatives coming out to talk to us, we get discounts and training and attention not meant for us as individuals," he said. "You can afford to ignore one guy with a half dozen customers; you can't ignore an entire block of resellers without some [negative] consequences."
The group, which began as a rag-tag gathering of Microsoft Corp.'s Small Business Specialists in Southern California, has developed into a consortium of independent businesses working together and sharing strategies to drive business for each other. The group incorporated in May and began accepting nationwide VARs in September.
The SMBTN remains mostly a Southern California organization but has added VARs in Florida and Virginia and intend to deliver a global organization in coming years. The group even held its first conference this summer, attracting some 60 VARs and 15 vendors to Orlando, Fla.
And their numbers make them a force to be reckoned with, members said. In terms of Microsoft alone, the group represents more than 10 percent of SBS partners nationwide, Locke said.
The SMBTN has used its newfound weight to negotiate discounts with vendors, gain access to executives, and come up with its own brand of training that is cheaper and easier for member VARs. Sonic Wall and other vendors now send instructors to SMBTN locations and on their terms.
"We've set up a training regimen whereby they come to us on Saturdays, so we don't lose a business day, and teach us in small groups and hands on," said Eric Adkins, president of Adkins Technologies, of Lake Forest, Calif. "It's cheap [$35 with lunch included], and it wasn't just technical training. The vendor brought in one of their largest sellers, who taught us how you do it, how you use it and how you make money off of it."
The nontechnical aspects of the programcollaboration, camaraderie and business strategyare among the group's most useful resources, members said collectively.
"It's not just a 'let's talk tech' group," said John Rubino, president of Rubino Network Consulting, of Laguna Negal, Calif. "I've been in too many of those groups. This is focused on business and building business and thinking smart, not just individually.
"You meet a lot of people here, and you focus on building the relationships. You say, 'Here are some vendors that may help you,' 'Here are some tools to be more successful,' 'This will make your life a little easier.'"
Out of several trusted relationships, the group has recently spawned another benefit: partnering. Through an informal agreement among each other, members may share work under a 70-30 arrangementone VAR sells a service and bills the customer for 30 percent, while the provider receives 70 percent.
Locke leveraged one relationship with another VAR to pull in an extra $100,000 this year, he said.
"I took on a client I didn't have the bandwidth to handle," he said, "but I didn't want to turn down the business. So I asked for some help, and I got it. I do the billing, and I pay my partner. I'm going to make an extra $100,000 from that customer this year."
For Greg Blundell, president of Integrated Systems Solutions, Orange, Calif., the collaboration is even more basic.
"We're sharing a level of experience you won't find in any other arena," he said. "Between all of us, we have a great level of experience, and to be able to post a message or make a call with a question about a problem and get four calls back in 20 minutes saying, 'I saw that problem just last summer,' and the like is just fantastic."