Solution provider takeaway: Use these tactics to secure storage installation service contracts with your customers.
Despite recurrent customer opinion to the contrary, in most cases, value-added resellers (VARs) are better equipped to provide storage installation services than the manufacturers of those solutions. Those customers often default to the vendor's installation services. So how do you convince them that your organization is more qualified than the vendor to provide installation and support services, so you can win the installation contract?
When I'm working with a VAR to increase their installation and support revenue, I frequently feel like I need to convince them that they're in a better position than the vendor to deliver installation and support services. It's true, they are. And the first step in actually having better installation and support services is to be realistic about the breadth of services you can offer. Many times a VAR does not have the resources that a vendor does, and as a result they have to focus on what they can do well and consistently, time after time. There's demand for many types of services; you need to resist the temptation to take them all on. Instead, focus on those that will allow you to get the solution installed as promised, make the customer happy and be able to move on to the next installation, good reference in hand.
It's important to focus on your core competency. I can't tell you how many times I've seen a VAR step outside their comfort zone -- even slightly -- and have the whole installation go wrong. They end up spending unbillable hours fixing the problems -- costing them both the profit potential of the project as well as the opportunity for future projects as they lose customer confidence.
When selecting an area of focus, be sure to pick one that requires integration. This may seem obvious, but installing one vendor's products, even if you do it well, makes it more difficult to differentiate yourself from the manufacturer in the customer's mind. A possible exception to this rule is when a manufacturer's offerings are so wide and varied that it's obvious to everyone involved that the vendor is no longer the expert. I won't name names, but I think we all know who I'm talking about here.
You should also make sure not to hinge each of your service offerings on one engineer. Quality engineers are one of the most critical keys to the success of a VAR, but having only one who can do one thing presents several problems. The obvious problem is that if that engineer leaves, you're in trouble. Your services practice will be left in the lurch, and you'll need to scramble to find another engineer. Also, having one engineer for each service offering doesn't look good to your vendor partners or potential customers. They also know that the engineer could leave. Lastly, there's the issue of scalability: What if the service you're focusing on takes off? You can only have the engineer work so many hours a week before they get testy. And how do you work in ongoing training, lab time and, well, vacation?
The number of engineers also has to be balanced against the need to make a profit. You're no cloud computing startup here; you actually have to make money to stay in business. My recommendation is to always start with at least two engineers for any new service offering you take on. Then, obviously, grow the headcount as you can find quality people and as demand for the offering grows. You'll notice I listed finding quality people ahead of demand growth -- I always do. Engineers are everywhere, but great engineers who can help you grow your business are extremely hard to find.
So, with those cardinal rules out of the way, let's talk more specifically about how to beat manufacturers to the storage installation service contract. First, you should make sure that some or all of the products you support are from vendors that have either a small or nonexistent services organization. Some manufacturers simply get the channel; they understand that a large service organization is in direct competition with the channel, and they purposely keep their service organization small. In fact, some go so far as to have a service organization that is only available to the channel. These are the kinds of companies you'd do well to align yourself with.
It's also important to select solutions for which no single vendor supplies all the components. For instance, a perfect scenario is to work with a switch from vendor A, storage from vendor B, software from vendor C and of course services and integration from your own company. This approach is becoming harder to achieve because many big vendors are essentially offering everything, including services.
An alternative to this approach is to go right into the lion's den: Offer the exact same products and services as the major manufacturer and win installation business. How?
First, while it's not as scintillating a conversation, you can win on price. You're more than likely leaner and meaner than your manufacturer partners, or you better be. They have a lot of headcount to pay for. But price, as always, is a dangerous cornerstone. In an effort to get a project, vendors have been known to drastically reduce price or even give services away.
Second, you can win an installation contract on speed and ease of doing business. Most VARs deploy local resources, have a flat organizational structure and a relatively simple engineer-planning schedule. Some manufacturers, on the other hand, have built a labyrinth of bureaucracy to deliver professional services; that, plus all the legal forms they require, means they're very slow to respond. It might take a vendor three or four weeks to respond to a service request.
Third, you can have a lower headcount per project -- which helps achieve a price advantage -- by having more broadly trained engineers. While I am a big believer in focus, overspecialization is also a problem. Given the right training and lab time, there's no reason why a single engineer can't be fluent at installing a server virtualization solution, a storage solution and a backup application. A manufacturer will likely send, at a minimum, three people to do that installation. Big vendors also have a high administrative overhead. In addition to the on-site engineers, many manufacturers also have a manager, a director and a VP of engineering involved somehow. Some will also have a dedicated project manager. There is certainly a need for some of those resources when you are managing 100 projects at a time, but most VARs don't need or want that many active projects. Remember you just have to win this one installation contract.
Fourth, you can indeed be demonstrably better. Most manufacturer engineers don't get enough lab time or training, and, ironically, many manufacturers don't have local labs! They do tend to keep their engineers very busy; they have to pay for all that staff overhead. As a VAR, you can slow the clock down a little to give your engineers more time to become more proficient at your solutions. And you can examine each project and determine what you need to do better.
At the integrator where I spent a number of years, this strategy worked so well that vendor salespeople actually started quoting our installation services instead of their own internal professional services, even though they lost commission dollars by doing so. They were convinced that we could install the project on time, for the same or less money and deliver a satisfied customer. These guys had figured out that their customer wouldn't buy more storage until the initial project was working -- so their recommendation worked for both them and us.
I find that customers are more impressed when projects are installed quickly and efficiently rather than stretching on for, say, three weeks. Many customers find greater comfort in dealing with a locally based organization rather than a larger faceless entity, but there's one other important factor: your reputation. One of the most effective statements to make to a potential customer is, "We are local, our reputation is very valuable to us, and you have my personal commitment that we will do a better job than the manufacturer."
About the author
George Crump is president and founder of Storage Switzerland, an IT analyst firm focused on the storage and virtualization segments. With 25 years of experience designing storage solutions for data centers across the United States, he has seen the birth of such technologies as RAID, NAS and SAN. Prior to founding Storage Switzerland, George was chief technology officer at one of the nation's largest storage integrators, where he was in charge of technology testing, integration and product selection. Find Storage Switzerland's disclosure statement here.