VARs Should Go Vertical in 2008

VARs will find the best growth opportunities in telecom, healthcare and professional services in 2008, according to the results of Ziff Davis Enterprise research.

Of the 190 VARs who participated in the research study, 45 percent said they saw IT/telecom as an area they would focus on for 2008 growth. Unified communications could play a huge role in that growth, along with VOIP (voice over IP), said Steve Tepedino, president and CEO of Channel Savvy. “This is very much an emerging technology and vendors are all coming at it from a different angle,” Tepedino said. Cisco, he said, is the most recognizable name in unified communications. Microsoft has also developed applications and Avaya is changing its model to prepare to be more of a software and services company, he said. VARs must understand who the players are and educate themselves on the opportunities available, he said.

While traditional, horizontal markets such as storage and security will remain important, being able to use those technologies to specialize will help spur growth. “If VARs are not already focused vertically, it’s going to be critical to at least speak in terms of business issues and solutions and apply them across different verticals,” said Allan Adler, Engagement Partner, Crimson Consulting.

In the healthcare space, for instance, large vendors such as Intel and IBM already create products designed specifically for that sector, but opportunities are available for smaller solution providers and ISVs to craft customized, highly specialized solutions based on more generalized business issues. Hospitals have very unique needs around clinical application integration, user provisioning and workflow, Tepedino said, which keeps healthcare at the top of the “hot” list year after year.

Tepedino said healthcare will stay hot for the next couple years, “as long as VARs can build solutions on sound infrastructure and are able to speak [health professionals’] language and solve their problems using industry-standard technology,” he said. While the integration of technology and healthcare is slow, it will eventually happen, he said, but it will come from the ground up. “It’s going to take the ‘next wave’ of younger medical professionals who bring their techie lifestyle into the workplace,” he said.

Ziff Davis Enterprise research showed that VARs would also focus on professional services, and Adler stressed enterprise content management as particularly important. In vertical markets such as financial services, end users demand round-the-clock access to information. Adler said that traditionally, companies used CRM and ERP applications to create information silos with limited accessibility and that while those applications provide companies with a controlled data storage environment, it didn’t do much to either help the company analyze the data it did have, nor did it provide the information to end users in ways they needed.

“This has rendered IT powerless,” Adler said. “The notion of individual access is inconsistent with the investments these companies have made,” he said. The future will involve bringing intelligent content to users and to customers, he said, and figuring out ways to do that offers great opportunity for VARs.

Professional services, Tepedino said, continues to be a hot area for VARs. “Understanding customers’ business problems and making a vendor’s product perform,” is still the main way VARs will grow in 2008, he said. “Sure, the products work out of the box, but VARs have to make sure that the customer is getting the desired result.”