The IT industry is marked by change. Existing technology is continually evolving and new technological solutions are regularly released. For IT solution providers, like value-added resellers (VARs) and systems integrators (SIs), this is both an opportunity and a challenge. The opportunity lies in being able to solve a customer's problem. However, solution providers must first learn about the technology. And therein lies the challenge.
In fact, learning new technologies ranks among the top 10 (of 25) VAR business challenges, according to a recent SearchITChannel survey of 279 North American solution providers. And the problem, like many others solution providers face, may boil down to money.
"When a VAR is taking on a new technology, they're taking time out of selling. Anytime you're taking away from the amount of time a VAR can be in the office or in a meeting with customers, they are losing money," said Heather Margolis, president and founder, at Boulder-Colo.-based channel strategy consultancy Channel Maven Consulting.
Building expertise takes time
When offering new technologies, it's critical that VARs not just learn about them but be seen as experts on them. "The VAR wants to be as well versed on the technology as possible when they walk into the customer. It's not just sign the contract and get three people trained. They want to come across to the customer as incredibly intelligent about that technology," said Margolis.
Steps to take before committing to a new technology or product
- Assess demand for the technology among your customer base.
- Assess profit potential of the technology, including vendor partner margins.
- Assess the lost-opportunity cost of dedicating staff time to education.
"There's a tremendous amount to know. The industry changes really fast. There are always new offerings and stuff we have to be on top of. When we talk to a client we want to offer them a solution and expertise," said James Dowd, director of managed services and special projects at Flexible Business Systems, a Long Island, N.Y.-based full-service IT company.
Glen Jodoin, vice president of marketing and operations of Kittery, Maine-based GreenPages, a virtualization and cloud consulting and integration company, agrees. "The big challenge I think is sifting through it all. There's a never-ending supply of companies that have great ideas and solutions. It's finding the one that has the most support for your clients," he said.
And it's not just a matter of finding one product to address a particular problem. "You always want your a and b [options], your market leaders, then bleeding edge or niche. We want to have more than one option, generally. But that's still hundreds of certifications. It's ridiculous," said Jodoin.
The sheer volume of technology products and companies means that solution providers have to be careful about where they spend their time. "You have to strike a balance between serving the existing client base and at the same time learning new technologies. Technology, especially in this industry, drives innovation. It gives businesses new opportunities, so if you're at the forefront and understand how it adds value to the business, there's value in and of itself. But you balance serving the account and adding these new things in," said Dowd.
Motivation and the competitive advantage
Customer demand is often the impetus behind pursuit of a new technology. "When I was working at Dell, a lot of the time the new VARs came to us because the customer required it," Margolis said. "It's very unlikely a VAR would take on a new technology until the customer asked for it."
And the request from a customer can give you clues about where a particular market is headed. "Part of the … challenge is trying to look ahead and predict where the industry is going, really understanding the trajectory of your industry," said Matt Vlasach, director of mobile integration services for Mesa, Ariz.-based Unwired Revolution, a mobile solutions integrator. "It's a matter of looking at the nature of [a customer] request and extending that out and thinking if there are a lot of companies doing X then problem Y is inevitable to follow."
But taking too much time to decide on new technologies can mean a missed opportunity. "You have an advantage as a first mover and getting educated on the item," said Vlasach. "If you understand and know a technology well but your competitors don't, that gives you a huge competitive advantage. That may be a little scary, but what you offer your customers is a point of differentiation."
No matter how big a particular technology is, you need to analyze what it means for your company and how much effort is involved in developing the expertise before taking any action. Margolis advises VARs to "assess the demand that's out there for the new technology before you take the time away from what you already sell and are selling well to learn how to sell something else."
Similarly, Dowd said, "Weigh how much time is it going to take to figure out how to sell that technology; how profitable is that really going to be. If they're looking to take on EMC, they want to know they're going to have a large margin so it was worth it taking the two weeks to go through the classes, get the marketing materials and figure out how to use them."
"It's a staggering amount of work, so it means you can't represent everybody. But we'd like to think that everybody we recommend we are experts in," said Jodoin.
This was first published in July 2013