DENVER -- Profitability, or lack thereof, remains the top concern among VARs as the recession continues. And now, in that quest for profit, smart channel players are making a concerted effort to brand and promote their own value above and beyond any vendor affiliation.
That theme of VAR brand was a common discussion thread throughout Ingram Micro's VentureTech Network (VTN) Fall 2009 Invitational here this week.
In the past, many VARs stressed their vendor certifications first and foremost hoping that association with those multi-billion-dollar brands would win business. But many VTN attendees said that is no longer a priority. "Our customers don't even ask about our vendor badges," said attendee Guy Baroan, principal of Baroan Technologies, an Elmwood, N.J., solution provider specializing in small business accounts.
VAR branding is key
In short, it's more important for a VAR to align tightly to its customer base than to technology vendors that could change their sales model over time. "Why get in bed with a vendor that could go direct tomorrow?" asked one long-time New York City area VAR at the show.
Strengthening that customer bond could mean building a deep vertical expertise to serve a niche audience or providing above-and-beyond services for more basic infrastructure, attendees said.
The vendors keep pushing the value of their own brands, which is only natural. Most want their VARs to be more exclusive to them. Meaghan Kelly, Hewlett-Packard's vice president for channel sales, told several hundred VTN attendees that "status matters," so they should push for HP Elite membership. Microsoft and other vendors are likewise wooing VARs to train and test into their highest level partner tiers. Just two weeks ago, Oracle launched its revamped partner program, touting new Platinum, Gold and other designations. That training and testing requires a significant outlay from VARs whether in fees paid or in lost billable hours.
Smart VARs stress skills and value vs. vendor affiliations
But when push comes to shove, successful solution implementations -- not vendor badges -- win customers.
"Platinum, Gold, that's boring … but if you have a rapid deployment tool and you've deployed into healthcare customers 29 times, that's interesting," Tiffani Bova, Gartner Inc.'s vice president of research, told several hundred VTN member attendees Monday morning.
The new Ingram Micro business intelligence portal announced this week could help VTN partners, a select subset of Ingram Micro-affiliated VARs, learn more about their existing customers. The portal, to go live in the first quarter 2010, will enable qualified partners to see more of what their customers buy from Ingram Micro, but via other partners. A given customer might purchase security and other software from a VAR but get laptops and desktop PCs from CDW Corp. (ultimately also via Ingram Micro). Armed with that knowledge, the VAR might come up with compelling services and product offerings to win more of that business.
That data could really help VARs wanting to sell more into existing accounts, said Donald Nokes, president of NetCenergy, a Warwick, R.I., VTN member.
Many VARs are simply becoming better business people instead of relying on vendors for differentiation and business expertise.
"The vendor is not the VAR's identity. [VARs] now make sure they are their own identity backed by vendors," said Ryan Grant, director of channel programs for Ingram Micro in Santa Ana, Calif. "They have to be business owners, they have to know how to manage a balance sheet and people. They are more sophisticated."
Jane Cage, COO of Heartland Technology Solutions, Joplin, Mo., said VARs have to work hard to promote their respective brands. If the blinking red heart pins spotted all over the event are any indication, Heartland succeeded on that front this week.
To be sure, vendor relationships are crucial as long as they back up primary VAR expertise. "We jump through hoops to get these [vendor certifications] and they're worth it on the back end [in] rebates and margins," Cage added.
But do they help win business? Do customers ask or care about these designations? "Not really," she said.