Before 2007 even started, it was clear this would be the beginning of a major conversion in the business models of the channel. Customers increasingly demanded the ability to buy monitoring and maintenance services on subscription, and the idea of "buying" software the same way was gaining momentum.
A few vendors even risked the wrath of their channel partners by claiming VARs could make a good living selling only the contracts and relying on the vendor to host and maintain the software. That, many analysts predicted, could leave value-added resellers (VARs) with much less value to add.
Not so, VARs told SearchITChannel. There's always a need for solution providers, VAR after VAR told us. There's always a role customers want their VAR to play, though few VARs could articulate that role at the time.
But they were right. Rather than getting mired in chaos and upheaval, the channel just flowed along, absorbing the shift toward a services economy pretty smoothly.
No. 10: Suite-ification of security products
Normally channel companies are unhappy when vendors pile a ton of new features into an existing product or sink a handful of products (and potentially dozens
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No. 9: Enterprise apps get small, cheap and channel-ized
Once upon a time even thinking about ERP or CRM took a million dollars and two years for development. That approach doesn't work when you're trying to sell to small and medium-sized businesses (SMBs), but it's a lot easier to make a box easy to install than a multi-module enterprise application framework. Or is it?
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No. 8: A VAR's best friend is another VAR
Channel companies have been hooking up on complex deals for years. One lands a deal that involves an application it can't develop or a network it can't build, so it calls in another VAR in the same geographic area but a different technology market. In 2007 the practice turned into a discipline, as vendors launched formal programs to help VARs find partners the way online dating service customers find them -- at a distance, with a lot of trepidation and occasionally a really good outcome.
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No. 7: Dell is a channel company. No it's not. Yes it is.
Dell's acquisition of EqualLogic -- so the story goes -- compelled it to rationalize its ad hoc channel business and offer a formal support program. Actually Dell's been bringing in billions through the channel, and the latest switch let it admit that without dropping the sell-direct policy that has made it one of the most hated names in the channel.
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EMC partners mull Dell's iSCSI strategy following EqualLogic buyout
Dell launches partner program, will continue factory integration model
Dell partners: Program shows promise
No. 6: The rush to the SMB
There are thousands of enterprise-class customers out there, but there are tens (possibly hundreds) of thousands of potential small and medium-sized customers as well -- and it's the SMBs that are more likely to buy through the channel. So when it seemed like every IT vendor was racing to be the next to adapt its enterprise products and start selling to the SMB (often because the enterprise market was already saturated), it could only help the channel.
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Clustered storage is changing SMB channel conversations
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Novell steers partners toward SMB market -- not all are thrilled
No. 5: The rush back to the midmarket
There may indeed be a lot of SMBs out there, but most of them don't have that much money to spend, or any need for complex IT systems. So vendors headed back upstream, away from what they called the "S of SMB," and toward the medium-sized enterprise. VARs, who knew the difference between small and small, gladly took the simplified product lines and went off to sell high-end IT functionality to midsized customers.
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Dell/EMC midmarket storage strategy may cause channel conflict
CA to reduce channel conflict in battle to increase storage revenue
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IBM tries to reenergize storage with host of midmarket products
No. 4: Communications get unified -- amidst all the fighting
Putting voice traffic over IP networks isn't enough; in 2007, we had to put voicemail, email and every other form of communication together into one integrated package. Unified communications promised convenience to end users and riches to network vendors -- who immediately went to war over the brand-new market. Microsoft and Cisco got into such a tussle that their CEOs were compelled to go on stage together with nothing to hype or announce except that their companies would remain great friends and all their products would continue to work together. The rest of the market -- including the channel -- just sighed and got on with adapting the technology even to customers without 5,000 VoIP seats to convert.
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No. 3: VoIP (at risk) everywhere
What started out as a way for geeks to save money making calls over the Internet turned into a transformative trend in telecommunications. In 2007, VoIP took over the market so completely that it stopped being the hot new thing customers wanted to buy and started being the hot new target for hackers looking for vulnerable technology.
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How to build VoIP services
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Attacks on VoIP to increase
SMBs need to upgrade, but don't trust VoIP security
VoIP deals depend on answering VoIP security concerns
VoIP network security offers new challenges for resellers
Security weaknesses of VoIP protocols
No. 2: Managed services change economics of channel
Before online software became the defining characteristic of the software sales channel, there were managed services and the providers who, uh, provided them. Whether monitoring networks, storing data or securing the perimeter, managed services are more involved and demanding than hosting an application users can access through a Web browser, but it's still a lot less trouble than having to go out to a customer's site every time something goes wrong.
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After-sales service defines success for managed service providers
Spotting the next wave of managed services
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No. 1: The growing SaaS market
When it first cropped up, Software as a Service (SaaS) seemed like a much more direct threat to the channel than managed services, which was really just a refinement of existing outsourcing and support businesses. SaaS, though, promised to give customers access to sophisticated IT services without the intervention of anyone but the application host. Salesforce.com started out threatening SAP AG and other vendors whose software had to be installed at a customer's site, and ended up giving VARs a way to sell sophisticated applications without the cost of ramping up an internal specialty practice. You're a network integrator building a Voice over IP network for a customer who, coincidentally, also wants a customer relationship management (CRM) system? Sell them a contract for Microsoft Dynamic Live, let Microsoft host and maintain the app and keep a slice of the profit for yourself -- without having to learn CRM first.
Software as a Service market opportunities abound
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SaaS market leaves VARs searching for their niche
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Supporting Software as a Service: What VARs need to know
Channel Strategies for the CIO
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