The Channel's Edge

"The more complicated the system, the more likely you are to get value out of working with a partner," says Jeff Bell, administrative director of technical services for Baptist Information Systems at Baptist Memorial. The hospital's IT center includes hardware from Data General, Hewlett-Packard and Compaq, and it was all to be integrated by Pomeroy.

Even in an age when some vendors are gearing up their direct-sales operations, especially for Web-based sales of commodity items such as PCs (see "Direct Sales Don't Diminish VARs' Value," page 78), VARs and other channel partners still have an excellent chance to attract the dollars of major commercial and nonprofit customers. In fact, on average, businesses say they will likely spend about half (49 percent) of their IT budgets through the channel, according to VARBusiness' IT Spending and Strategy (ITSS) survey. Encouragingly, 17 percent say they will buy a greater percentage of their technology through the channel in 2002. Some respondents, however, say they plan to spend less through the channel, particularly those not currently satisfied with their IT providers (28 percent). But the survey results clearly show that whether they're in services or any other economic sector, VARs can increase their odds of earning end-user dollars by demonstrating they're an indispensable part of the solution.

Third-Party Perks

In a multivendor environment, a solution provider offers an objective perspective,the most important reason to use a third-party IT provider, says Elana Samuels, president of Storage-

pipe, an off-site data backup and storage solution provider based in Toronto.

"A number of players have popped up with homegrown solutions that haven't grabbed the attention of the top-tier manufacturers," says Samuels, a former VAR. Unlike a vendor, a VAR is in a position to evaluate those different technologies and give the end user an unbiased view as to which ones are viable, she adds.

Meeting aggressive time lines for implementing new projects is another reason to use a solution provider.

"Given time, we have the skills in-house to do almost anything, but the time lines were very aggressive on this project," Baptist Memorial's Bell says of his new data center.

IT managers such as Bell usually have the expertise in-house for day-to-day operations, but they need extra help when they upgrade their systems, and vendor support may be thin on the ground, especially in an age when many major manufacturers have announced thousands of layoffs.

If potential customers are used to dealing directly with their vendors, the challenge for the integrator, obviously, is getting them to make the switch to the channel. It's therefore crucial for a solution provider to establish a level of trust with an end user. That way, the solution provider can more effectively position his or her company as having the ability to do the job as well as,or better than,the vendor's own sales and engineering teams.

"What really makes or breaks success is the credibility of the relationship," says Steve Paris, director of IT for Ikon Office Solutions, a Valley Forge, Pa., solution provider.

Convincing end users that their vendors stand behind them is crucial to a VAR's credibility. That's when a call from the vendor can do the trick.

"I've had customers say to the partner, 'I love your solution, but how do I know IBM is really behind you?'" says Denise Buonaiuto, vice president of worldwide business partner sales for IBM's Storage Systems Group.

In those cases, Buonaiuto or a member of her team will make the sales calls with the partner to convince customers that partners have IBM's backing and support. But in other cases, a VAR's familiarity with the customer's business processes can make the difference in a decision to go to a third-party source for technology. A solution provider who already has vertical-market expertise or is willing to take the time to find out how the customer operates can bring much more value to the relationship than a vendor looking at business customers from 30,000 feet (read "Finding the Right VAR Was Providential," right).

Sometimes, using a VAR rather than going direct is a no-brainer: The vendor may not offer direct sales, or the vendor may not have sales and engineering staff in a particular area. In the latter case, a business partner increases the odds of customers getting the attention they need.

"We don't have the resources to cover every single opportunity and every single account," IBM's Buonaiuto says.

VARs also give end-user customers a second line of support, Storagepipe's Samuels says. She can turn to IBM for help, but she can also call on her Toronto solution provider, Maxium Solutions, which maintains an IBM Storage Solutions Center for expertise. In addition, the channel also offers greater product availability.

"When you deal direct with the manufacturer, you have access to whatever's in its warehouse, but when you deal with the reseller, you have access to what's in the manufacturer's warehouses and also in the distributor's and the reseller's warehouses," she says.

Be an Extension of the Customer

In general, the smaller the company, the more likely it is to depend on a solution provider for mission-critical technology.

"The average small business doesn't have an IT department, so it needs the ability to have partners," according to Rosa Garcia, Microsoft's general manager of worldwide partner sales and marketing. "Partners understand the business problems and become the virtual IT department of their customers."

Pricing and product availability are always crucial considerations, says Aaron Stranahan, director of data-center operations for Medibuy, a Nashville, Tenn.-based provider of health-care supply-chain e-commerce solutions. But he also points out the importance of having a partner who knows the business and is responsive to the client's needs. "When a crisis breaks, there is simply no substitute for calling a person with extensive knowledge of our business,and knowing you can count on him or her to correct the situation," Stranahan says. n