Opinion
The perfect storm
By Kelley Damore
I have been on the road talking to vendors and VARs for the past few months, and I have one observation: You are getting slammed from all sides. Never in my career have I seen so much turmoil in economic markets coupled with radical changes in technologies. Both are forcing you to rethink your business models and the investments you need to make in your businesses. In many ways, it makes for the perfect storm.
Being squeezed on price and margin is nothing new, but this hyperfocus on ROI is going to continue for quite some time. And while you expect it from clients, ROI seems to also be coming from the vendors as well.
As vendors look at their investments and their own profit margins, I have heard similar messages: They are going to pare back the number of solution providers they have. Other vendors are going to focus on making investments in much fewer SPs, and only the ones that they believe are giving them a real return on their channel investments. What's more, some vendors have said they are going to strip certification from VARs who don't make the proper investment in their technology.
The bottom line: If you are carrying a certification and making a small transaction here and a small transaction there, you may not be able to market a vendor's certification in the future. Partners will need to prove their worth to the vendor.
What's more, there has never been more competition in the market, especially around IT infrastructure. Some aggressive vendors are pressuring their VARs to sell their complete solution. Unfortunately, the vendors are forgetting that the value-add of the solution provider is pulling together heterogeneous solutions. And they forget that users want choice.
This economic storm is more than a tempest in an IT teapot. VARs are struggling with rising health-care costs for their employees, and many feel that while the stimulus package has reached Wall Street it still has to reach the Main Street. And while we've seen an uptick in enterprise spending, SMB spending has still not taken hold.
Furthermore, as states experience budget shortfalls, they, too, are trying to find potential revenue windfalls. One idea is to tax managed service providers. Traditionally, laws have stipulated that there are no taxes on services rendered by professionals, but many states are looking at changing the law.
However, after having highlighted the challenges which are stiff, let me also emphasize that there are bound to be more opportunities arising out of these challenges, as customers will have new business problems to solve.
The reason we are all in technology is the pace of change and the excitement that innovation brings to society. Change, yes. Boredom, no. |