Hardware sales are increasing for a good number of VARs and integrators, which at this point may be the worst thing that could happen to them.
While that may strike some as paradoxical, it isn’t quite as hard to comprehend as some of the current economic mixed signals, which one day indicate the economy is slowing and the next day say job creation is up.
Many customers, having put off IT projects through the dry years following the dot-com bust and Sept. 11, finally are opening their wallets. They are refreshing aging equipment and adopting new technology, fueling the increase in hardware sales. This is the first major refresh since the Y2K and Web-development boon of the late 1990s.
Sure, hardware sales increases will boost top-line growth for VARs and integrators that close enough deployment deals. VARs might even get a bottom-line boost if they manage to squeeze enough profit margin out of those deals.
But such gains most likely will be short-term.
Short-term gains are always tempting but not necessarily best. VARs and integrators with a sober eye on the future must think strategically. And these days thinking strategically means finding viable alternatives to product sales, especially hardware.
Not that VARs should turn their backs on large hardware deals, unless of course the margins are so tight to the point of voiding any potential profit.
But taking those deals without simultaneous strategic business planning is perilous. VARs and integrators should be looking at ways to de-emphasize hardware sales in favor of a more consultative approach around service and solutions.
This is a reality that presumably most VARs understand, even if perhaps not enough of them yet have acted on it. But those who have started to shift to a solutions and service orientation must keep their focus, despite the current hardware demand.
A temporary loss of focus may have long-term repercussions. It could even prove fatal.
As it is, IT trade association Comptia, of Oakbrook Terrace, Ill., has concluded that not enough VARs have shifted from a product-focused model to a solution orientation.
The organization considers the situation dire. It has resulted in a great number of VARs at risk of going out of business and an overall channel that lacks the necessary know-how vendors need to sell and service their solutions and services.
As technology entrenches itself in business processes and our overall modern lifestyle, it is imperative that VARs know how to sell, maintain and service it.
Selling a couple dozen PCs and a server to a customer will only get you so far. Those PCs and servers truly meet customer requirements, be they the automation of backroom functions, the ability to run reports that distill mind-boggling amounts of data into simple readable form, or the safeguarding of financial customer information.
Clearly, VARs and integrators cannot be experts on all things technological. It’s important to have core competencies, so long as those core competencies aren’t just about selling product.
Smart VARs like Future Vision Inc. of Raleigh, N.C., and Heartland Technology Solutions, of Joplin, Mo., understand the current realities of the market. That is why both have taken great pains in recent years to grow their services portfolios and continue exploring new revenue generators.
Heartland is planning a move into managed services, and Future Vision has been getting into things like security surveillance over IP.
PMV Technologies, of Troy, Mich., leads with the overall solution, according to Executive Vice President Scott Goemmel. The hardware is just one component in meeting the customer’s business technology requirements.
PMV, as well as Heartland and Future Vision, know that selling product alone does not a future build. More VARs and integrators must follow their example if the channel is going to remain healthy when the current product refresh cycle draws to an end.
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