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17 Disruptive Forces that Threaten the Channel

Look at the IT world today and it’s very different than it was 10 years ago. Cloud computing, hosted software, smartphones, the consumerization of IT, and a vastly different economy are all disruptive forces that potentially threaten solution provider business models. But there’s a silver lining to that disruptive cloud. Here are seven disruptive forces and the opportunities they represent.

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Vendors increasing professional servicesWhether it’s consulting or professional services, as vendors look to strengthen their earnings reports with higher-margin businesses, it cuts into the business that many VARs have carved out for themselves.Opportunity: Point out to customers that you can offer vendor- neutral advice, best of breed technologies, and superior integration services.

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Vendors offering hosted SaaS and managed servicesThis poses a dual threat to channel partners. First, it cuts into a business they could offer to customers. And second, it cuts into software license sales.Opportunity: Solution providers can aggregate more than one SaaS offering from more than one vendor, providing a more complete solution. For example, Blackberry integration on a hosted Microsoft Exchange offering. Vendors just aren’t going to include the technology of a competitor.

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The rise of smart phones These smartphones are becoming the mobile client of choice, but the go-to-market strategy for manufacturers is in partnership with carriers, not VARs.Opportunity: Hardware doesn’t offer any margins anyway. If you can integrate your customers’ smartphones with their compute environment and support that infrastructure, you’re getting the best part of the mobile business.

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Consumerization of IT According to Gartner, 10 percent of enterprises say that their workers are using employee-owned notebooks as their primary work PC in 2009. Are those sales going through, you, the channel partner, or through Best Buy?Opportunity: Again, hardware sales are a commodity. The real money is in getting those systems to work with the infrastructure, and that’s higher-margin services and your area of expertise.

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Cloud computingAs more functions are pushed into the cloud, they are less likely to be owned by the VAR or solution provider.Opportunity: VARs have the opportunity to become cloud providers themselves or else serve as the trusted advisor and expert helping customers who are looking at potential cloud providers. Consider offering infrastructure as a service or software as a service yourself.

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High unemployment This past year’s deep recession has increased unemployment to the highest level in many years, sending many former IT workers out to start their own solution provider companies and increasing competition for incumbent VARs.Opportunity: Tout your experience, your high level of customer service, and your ongoing relationship with customers. And use the opportunity to trade up your workforce.

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IT Budget StagnationExperts say that IT’s biggest goal for 2010 is to contain costs which means less spending on what you have to sell.Opportunity: But IT will be considered more strategic in 2010, so if you can help customers use IT to reduce costs, increase revenue or have some other positive business impact you are more likely to win those scarce 2010 IT dollars.