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Products that Drive Profitability

With all the focus on profit these days, it’s little wonder that most of the conversation in the channel seems to focus on IT services because this is naturally the most profitable segment of the business. But without products, there can be no services and, arguably, it’s the people that sell the products that have […]

Written By

Michael Vizard

Jul 18, 2007

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With all the focus on profit these days, it’s little wonder that most of the conversation in the channel seems to focus on IT services because this is naturally the most profitable segment of the business.

But without products, there can be no services and, arguably, it’s the people that sell the products that have the inside track on delivering the profitable services that those products enable.

The key thing for solution providers is to identify emerging technology sectors that not only tend to drive high margin product sales, but also pull with them high margin services that customers are willing to pay for. With that goal in mind, the editors of eWEEK Channel Insider pulled together a list of the biggest opportunities for solution providers in an easy to peruse slideshow that highlights technologies such as network access control, virtualization, VOIP (voice over IP) and IP video.

Click here for the 7th Annual eWEEK Excellence Awards Winners.

The next significant product-focused editorial package that should get the attention of solution providers is the eWEEK Excellence Awards where the analysts of eWEEK Labs have aggregated the testing results and identified the most compelling products announced in the last year.

There are a lot of familiar names on this list, including IBM, Adobe, Sun, Microsoft, Intel, BMC, RSA and Lenovo, which was crowned the overall winner because of its tablet PC offering. But there are also many unfamiliar names on the list. And to be quite frank about it, many of them don’t have the most robust or proactive channel programs, so that puts the onus on solution providers to seize the opportunity that many of these smaller vendors represent.

Those products from smaller vendors include: the Skytide business analytics software; Sugar CRM; the MessageLabs Archiving Service; the Zimbra collaboration suite; storage arrays from EqualLogic and LeftHand Networks; the Shunra IT Quality Assurance tools; wireless networking technology from Xirrus; the Centeris Likewise application management suite; the Finjan Web security appliance; and the BigFix vulnerability assessment tools.

Many solution providers shy away from smaller vendors because they want to limit the risk associated with supporting smaller vendors that could be acquired by a larger company at any moment. But being in the channel is all about risk, so don’t complain about profitability on the one hand without having an appetite for risk on the other. And with the winners of the eWEEK Excellence Awards, you can be assured that the products have at least been properly vetted by a third party.

We’ll be exploring the relationship between risk and profitability at our Ziff Davis Channel Summit, Sept. 19 in Chicago, which we encourage you to attend.

Click here for more information on the Ziff Davis Channel Summit.

At the end of the day, the characteristics that make one organization more profitable than the next involves the ability of a solution provider to define and master cutting edge technologies that solve real problems for customers.

That doesn’t mean that solution providers need to be on the bleeding edge of technology. But if you are only selling what everybody else is selling, you’re going to find it harder and harder to stay profitable.

Michael Vizard

Michael Vizard is a seasoned IT journalist, with nearly 30 years of experience writing and editing about enterprise IT issues. He is a writer for publications including Programmableweb, IT Business Edge, CIOinsight, Channel Insider and UBM Tech. He formerly was editorial director for Ziff-Davis Enterprise, where he launched the company’s custom content division, and has also served as editor in chief for CRN and InfoWorld. He also has held editorial positions at PC Week, Computerworld and Digital Review.

Products that Drive Profitability

Michael Vizard

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