Channel Strategies

How VARS and integrators are cashing in on the ARRA


Today’s technologies shape VAR offerings

Virtualization, open source and cloud computing are just some of the new options solution providers are pitching to save clients money and improve their productivity.

Doing more with less is the mantra of businesses today, and solution providers are quickly adapting their offerings to help corporations to live up to that creed. Responding to tight budgets, VARs are recommending and implementing technologies designed to reduce costs, enhance productivity and meet increasing government standards.

To satisfy these requirements, many solution providers propose technologies such as open source, virtualization, cloud computing and unified communications as a way to get more IT value for their buck.

Given the technology decisions facing businesses today, the future looks bright for solution providers that are prepared to guide clients through the maze of options that empower businesses to do more with less and do it better than before.

Here are some of the up-and coming technologies for channel players to follow:

Open source: Although open source is not new, this non-proprietary approach to computing is attracting more devotees from the corporate world. In addition to a lower cost of entry, open source solutions are not dependent on one particular vendor’s whims or future product directions, making IT professionals feel secure in the longevity of their software purchases.

Levementum, a business and software services consulting firm in Chandler, Ariz., predicted that the adoption of open source applications would mirror the success Linux has had in the business world. As open source gained momentum, it created tons of value for enterprises, said Geoffrey Mobisson, managing partner at Levementum, which saw its 2009 revenue increase 44%.

In today’s reality, enterprises that used to have $100 million IT budgets now have $50 million budgets. “Does that mean they can do less? No, it means they have to do more, but they have to do more with less,” Mobisson said.

Carnegie Technology Associates Inc., a professional services firm in San Diego, Calif., has seen the market shift in the last three years toward open source applications, said Lawrence Rich, partner and consultant at the firm. The poor economy encouraged large clients to consider alternatives to costly proprietary software, and that opened the door for small start-ups to buy leadingedge applications, he said.

“What changed for us is it’s a lot easier for us to sell into smaller start-up companies now than it was before. A 50-person start-up cannot afford $3 million, but they can afford $50,000,” he said.

Virtualization: Desktop virtualization is going to become the hottest technology in 2010 and 2011, said Larry Letow, president and COO of Convergence Technology Consulting in Bowie, Md. If CIOs have not implemented it, considered it or are in the process of already doing it, they should be updating their resumes, he said.

The idea of doing more with less has really opened up the world of virtualization and consolidation than ever before, said Bob Venero, president and CEO of Future Tech Enterprise Inc., a solution provider in Holbrook, N.Y.

“The majority of accounts have not only done a fast-track in adoption of virtualization but have really mandated it from the CFO down,” Venero said. “It has been very beneficial to us because a lot of times it’s not a technology discussion—it’s a business discussion,” he said. “Selling technology for the support of a business need or requirement— that’s been missed in the past.”

Customers seek licensing guidance, which can be a tricky proposition with virtualization. “Our path forward with them is to make sure they’re in compliance,” said Marc Barnett, senior manager solutions and services marketing at CDWin Vernon Hills, Ill.

Unified communications: When a company combines audio, video and voice on a secure network in a unified communications scenario, it can save money. With an array of options and price points, VARs are selling these solutions into a diverse set of customers, ranging from international conglomerates to small businesses.

“Unified communications technologies will be strong in 2010 as more companies come to understand the benefits and financial savings they receive from implementing them,” said Ken Archer, CEO of TriNet Systems, a Canton, Mass.- based networking and communications solutions provider.

Businesses have been using applications like email, instant messaging, mobile phones, faxes and videoconferencing for years, Archer said, but often IP-based systems are isolated and used as separate communications tools. “Organizations that are ready to go to the next level in terms of connecting people, information, coworkers, partners, vendors and customers to enable better collaborative experiences and improve productivity are turning to unified communications,” he said.

Tiny travel budgets have spurred adoption of unified communications, said CDW’s Barnett. “The economic downturn has caused many people to do collaboration rather than face to face via the web,” he said. On the network side, companies are investing in newer technologies to power up capabilities such as UC.

“Fibre Channel over Ethernet is one of the big pieces of tech that’s been talked about for a while that is starting to come to fruition, but I think we’re a couple of years away from full-scale adoption,” said John Legge, vice president of sales at Red Sky Solutions, a systems integrator in Sandy, Utah. “Voice over IP has been around for some time now but has really started to go mainstream over the past year,” Legge said.

Storage and data management: Budgets may have shrunk, but demands for storage continue unabated. “We’re seeing great opportunities for storage,” said Todd Swank, vice president of marketing at custom-builder Nor-Tech in Burnsville, Minn. “The demand for storage seems to be insatiable,” he said.

Laurus Technologies also sees an increasing need for storage as well as data management solutions, said Irwin Teodoro, director of systems integration at the Itasca, Ill.-based solution provider. If you look at some of these cutting-edge technologies, they’re not aimed at reducing the amount of data, Teodoro said. "It’s managing the amount of data,” he said.

Laurus Technologies helps customers choose the most cost-effective solution for a particular data type, said Teodoro. Some information, for example, is best suited for virtualization, while other data may safely be stored on tape, Fibre Channel or high-speed disk, he said.

Managing all that data is another growing challenge—and a growing market for VARs. Whether they provide on-premise solutions or hosting services, solution providers are enjoying a growth spurt.

“I think it’s going to be a slow, steady adoption over time,” said Bob Gleason, CEO of Westborough, Mass.-based RedTail Solutions Inc., a provider of hosted electronic data interchange and global data synchronization services to retailers. “Certain services are just natural and will get picked up and handled that way,” he said.

Security: Like storage, security is a technology that constantly evolves to meet the changing array of threats and regulations. “Businesses are demanding more from their existing security products and are starting to look to alternative technologies to provide increased visibility and control,” said David Titov, practice manager at reseller Trace3 in Irvine, Calif.

Growing corporate acceptance of social networking is spurring additional investment in security, said Michael Davis, CEO at Savid Technologies, a software developer and consulting firm in Tinley Park, Ill.
“Most companies traditionally have this castle-and-moat idea,” he said. The problem is that now many organizations are using social media, and employees are going online from remote locations using networks that aren’t secure, he said. “At the end of 2010, I think we’ll see zero-day vulnerabilities and a lot more in social media, and how technology needs to be integrated better,” he said.

The healthcare sector is investing more in general IT as well as in security to protect the industry’s mandated investments in electronic health records and HIPAA compliance. But industries long-seen as secure must keep enhancing their processes and technologies, said Ira Victor, director of compliance and forensics practice at Data Clone Labs in Reno, Nev.

“You’ve got organizations that are being diligent about following the right procedures, and you’ve got the overwhelming majority of organizations that are using the check-box approach,” Victor said. “Lack of knowledge is not protection [against lawsuits],” he said.

Cloud: Cloud computing continues to dominate many VARs’ conversations with customers. “Cloud computing connectivity technologies will be strong in 2010, as these services offer flexibility and cost savings for the consumer,” said Kirk Horton, vice president of channel sales at Telx, a global interconnectivity solutions provider in New York.

The cloud computing market is more mature now, and organizations are starting to explore what the technology has to offer. “The term ‘cloud’ doesn’t scare people anymore now—it interests people, said Michael Cohn, founder and chairman of Cloud Sherpas in Atlanta. “For the larger enterprise deals, a year ago we looked at a sales cycle of six months. Now we’re looking at half that time,” he said.

Hardware: Analysts predict an uptick in sales of desktops, notebooks and servers. Although many VARs now offer PCs or notebooks only as part of a larger, more profitable sale, some add-on technologies such as touchscreens are gathering momentum, particularly in certain vertical markets. Healthcare, for example, holds a big opportunity for touchscreen-enabled solutions, said Michael Starnes, CEO of The Smarter Practice, a healthcare solutions provider in Altamonte Springs, Fla.

Nor-Tech sees demand for its high-performing computers, said Swank. “It’s challenging, and the sales cycle is longer than in our typical PC business, but they tend to be larger opportunities with better margins,” he said. Other hot hardware technologies include digital signage and security-related solutions, such as video surveillance, Swank added.

The Smarter Practice sells a lot of super-light, 10-inch notebooks to physicians, Starnes said. “When you free someone’s mind that you’ve taken out the fragility of this device, then it becomes a truly transitive device. These 10-inch netbooks fit into the pocket of the doctor’s lab coat,” said Starnes. “The 40- and 50-year-old sets have picked up [on] multi-touch technology. I have a bunch of doctors asking me for the CSI technology,” he said.

About the Author

Alison Diana is a freelance writer and editor based in Merritt Island, Fla. She has reported on the channel, technology and business for more than 21 years.

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