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Having base-level product skills isn’t cutting it any longer. Not for
vendors. Not for end-users. So what do you need to go beyond these base-level technical
skills to differentiate yourself and continue to grow in today’s market? The
prescription: specialize.

As the IT market continues to mature, access to highly focused technology
“specialists” is becoming a more attractive concept for both vendors and their
channel partners. In Amazon Consulting’s recent channel study, “How Special are Specializations?,” 400
solution providers and 40 IT vendors were surveyed to gain insight into why
channel specialization programs matter, which type of specializations vendors
and solution providers should invest in for the future, and how to get the most
out of these specialization programs. The study indicated

most solution providers are looking for revenue impact, higher
profitability, new customers and better market differentiation, in that order,
when investing in specialization programs.

Despite their immaturity, these programs have proven so far to help
make these goals a reality. The challenges for solution providers of varying
sizes has been the time, money and number of staff members these specialization
programs require, along with the timing required to realize an ROI.

Given the current economic environment, all parties involved in the IT
food chain are thinking hard about where to invest to drive growth and market
differentiation. Specializations are the new “vogue” of value-based channel
programs. But are they really driving incremental results for channel partners
and their suppliers?

Cynthia Borland manages the professional services organization for XTG
Global, an international company based in Canada that owns value-added reseller
BlueRange Technology, Inc. “Specializations are absolutely a top priority for
us. The only reason we would engage in any sort of specialization program is to
gain market share and align with our clients’ long-term plans for their
business growth, no question. At the end of the day, you need to put numbers on
the board. Having a specialization that doesn’t grow market share means nothing
12 to 24 months later.”

VMWare is a good example of a vendor that is using specializations to
advance the role and credibility of partners in the hot cloud and
virtualization markets. Many partners are either selling or enabling customers
to move towards virtualization and cloud solutions. So how does a VMware partner
then differentiate itself in the marketplace? Is it through desktop virtualization,
or one of their new vertical market specializations? To figure out the best way
to make an impact in the market, organizations such as XTG Global are currently
assessing these options.

Ultimately, a well-designed specialization program should benefit all
tiers in the channel with a focus on the end-user. If the end-user receives
better architected IT solutions with higher quality surrounding services, they
will drive the value back to the vendor through the right quality and quantity
of partners into that track. More IT vendors are now formally tracking end-user
satisfaction and/or services delivery effectiveness as a measure of partner
value in their specialization programs

Solution providers are challenged by the rigorous requirements
involved with these advanced programs. However, wMs. Borland believes that with some key adjustments,
vendors can make a world of difference for partners who have an international
focus, claims Borland.

“Eliminating geographical restrictions or lifting specialization
limits in certain borders would change the landscape for a company like BlueRange.
This is the single most negative impact for the specialization business. Making
specialization assets transferable across borders would be huge for our
business as we address the growing global market place.” Borland also suggests vendors
limit the number of partners within a specialization to make it easier for end-users
to seek out specialized partners over their competitors.

Partner expectations for ROI are also becoming more defined in our
current economic environment. Most partners rank revenue and profitability
impact nearly equal as their top two ROI measures. Nearly half of the solution
provider respondents from the study said they want ROI within 6 to 11 months –
though for most, that may be just a line-of-site to an initial sales pipeline. For
others, it might be profit on initial deals and a few new customers. Larger
providers were willing to wait for 18 months.

However, for some companies, the ROI may have to build over
time. Greg Magee worked for various Value-Added Reseller companies for 13 years
and is now the Director of Business Development for System Design Advantage, a
$35 million  third party
supplier of parts, repair and logistics services to major IT equipment service
providers, small and medium businesses and Fortune 500 corporations.

Magee suggests, “What makes specializations worth the investment is
their rarity. With product lifecycles compressing so rapidly, to become trained
as an expert on a specific technology before it has been replaced is extremely
difficult. And that’s the problem that most service providers and even OEMs
face. A benefit of becoming an expert, however, is that those technologies typically
dovetail. The next or subsequent technology is based on the prior one. So even
with some change, it’s not so significant that all of your floor knowledge is
obsolete. Investing in the short-term may not achieve significant ROI, but over
time, it will help you become one of a very few experts in that technology genre.
That’s where I think the payoff is.”

In an economic environment that requires solution providers as well as
vendors to scrutinize their investments, it’s more important than ever for
vendors to organically integrate specialized partners into their corporate
sales and marketing models. If these programs simply act as a new way for
vendors to leverage increased technical training without holistically looking
at partners’ skill sets and readiness to effectively penetrate a market, partners
won’t invest in these programs, and they will fade and remain unleveraged. Solution
providers interviewed by Amazon
for this study echoed their expectation from vendors for strong
end-user marketing visibility to make their specialization investment have real
teeth with customers.

“If the specialization aligns with our type of customers, whether it’s
the right size of customers (an example being mid-market for us), and addresses
our vertical market space, then we take a look at if that program might benefit
us,” adds Borland. “We evaluate when we can correlate the increased skills sets
we build from the specialization program to when we can charge a premium for
those services.”

But specializations can often have drawbacks of rigid entry requirements
and sometimes incoherent program details that the average partner can not make
sense of alone. In their haste to announce a new program to the market, some
vendors do not have their backend programs ready to drive easy adoption.

“Some specialization programs are really difficult to interpret,
digest and execute. So by the time a VAR has investigated the program, made the
decision to move forward, and actually invested, they are often faced with
changes within six months of beginning the initiative. And they are under the
gun to produce immediate results in what is an emerging market,” notes Borland.

Solution providers have an opportunity to help their leading
suppliers get the most out of specializations, both by investing in the general
program and more importantly, leveraging that skill set and credential with not
just their target end-users, but also locally with the vendors’ own sales,
technical and marketing teams. Rather than sitting back and waiting for vendor
support to drop in their laps after the training is complete, we recommend
solution providers consider the following tactics to get the most from their
specialization investment:

  1. Track the Money – Before investing in the specialization, you should have a thorough projection of what the investment would be and how long it might take you to recoup. But, as you go to market using your new credentials, you should be tracking the revenue, profit and customer satisfaction impact of these new skills (or vendor endorsement) to give you leverage with the vendor on an ongoing basis about ROI. These programs are new and the vendors are as interested as you are about how (or if) they are adding value for everyone in the food chain. Keep those stats visible, both internally and with your primary channel sales manager.
  2. Drive a focused and collaborative marketing plan – Partners need to demand marketing support and expect to be integrated into the vendor’s go-to-market approach, especially after a significant commitment of time, training and staffing. Talk with the vendor field team to ensure you are going to be “special” in the program and the field.
  3. Make local reps work for you – Corporate-based channel programs can sometimes get lost in translation as they make their way to the field teams. Go out of your way to build local relationships at the sales, technical, services and marketing levels to make sure the field teams know of your investment and profile. Be intrusive in their quarterly planning meetings and their local events. Ask for preferential placement or leads or support by virtue of your investment. Use it as an opportunity to understand their local challenges and goals and figure out how you can help them.
  4. Leverage local events and field-driven activities —Do a bit of shameless self-promotion with the specialization credential. Don’t just slap it on your business cards, but use it to leverage your status and inclusion in local events, activities sponsored by the vendors’ product groups, and media coverage. Channel reporters are always looking to talk to highly specialized solution providers for a “real world” view of channel programs.

Borland adds, “I would challenge solution providers to take
a look at what they are selling successfully today and know their market share.
The key thing is to make sure you are partnering with an organization that is
committing to some long-term plan associated with that specific

If you’re already heavily vertically oriented, vendor-sponsored
specializations may or may not add value to your sales and marketing process.
It doesn’t matter how enticing the corporate specialization programs promise to
be if the vendors’ field teams do not readily embrace the partner and provide
local deal-level support where required. Many vendors are attempting to make field
teaming with partners less subjective and more in-line with partner investment.

If you choose not to invest in these next-generation competency
programs, many solution providers around you likely will. Then you’ll have to
reinvent yourself in other ways. Either way, make sure you’ve established very tight
customer relationships based on deep and consistent business process insights
with your customers – or others will attempt to use the vendor badge of
competency to create their own “special” relationships with those very

To learn more about Amazon Consulting’s “How Special are Specializations?
research study, click here.