Adding Value through Reseller/ISV PartnershipsBy Jessica Davis | Print
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Looking for a way to pump up margins? Partnering with an ISV may be the answer. Solution providers who team up with ISVs find they add more value for end-customers -- value that end customers will pay for.
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.