VARs Merge Talents For More Complete Offerings

For example, Norcross, Ga.-based Optimus Solutions, whose bread-and-butter has been selling new and refurbished midrange servers and storage technologies, launched a rapidly growing consulting arm 18 months ago to shore up its ability to diagnose customers' business needs. Building on the operation last year, the $123 million company added a security and infrastructure practice that helps customers assess their security environments, create internal security policies and even hire a security officer.

What's more, Macquarium Intelligent Communications, an Atlanta-based developer and integrator of portals, Web sites and other online technologies, last year snapped up Aperio, a consulting firm specializing in advising businesses on content management. Meanwhile, Green Beacon Solutions, a 12-person CRM consulting firm in Watertown, Mass., is primed to join the VAR ranks this year by offering Microsoft's forthcoming CRM package. Green Beacon Solutions will be branching well beyond its consulting roots to also sell a set of in-house-developed software products, including a Web-based lead-capture tool.

It's inescapable: Dual competency is becoming de rigueur. To get there, some technical VARs are hiring MBAs, while business-oriented VARs are adding developers. Companies such as Green Beacon Solutions are cross-training existing employees, while others are partnering externally to expand their reach. Still, others such as Interland are harnessing new competencies through acquisition.

Regardless of the means, VARs who are embracing both worlds say it allows them to appease customers that are demanding a single point of contact for strategic business advice, products, and application development and systems-integration aptitude,all tied to fast ROI.

"[Customers] are no longer telling us that they want SAP put in," says Peter Dupre, chief technical strategist at Edgewater Technology, who was hired last year to help the packaged applications integrator develop business-analysis skills tailored to its vertical-market customers. "They want you to approach a project in pieces, figuring out their actual business requirements to mitigate IT risk, and then make the case for building a piece of software."

In Interland's case, the Trellix acquisition, which closed last month, catapults it from a managed-infrastructure provider of Web hosting to a company with many more technical capabilities. Trellix's set of Web-development and e-commerce tools will offer a range of new business opportunities for both the company and its network of VARs, according to Don Bulens, senior vice president at Interland, who hails originally from Trellix. "This is an opportunity to deliver an integrated suite of tools to SMBs, as well as to leverage that suite of solutions as weaponry for [our] channel," he says.

Tending to that channel of 4,000 VARs is Tiffani Bova, who joined Interland six months ago as vice president of channel sales and marketing, and general manager of shared hosting. Bova is in the midst of beefing up incentives, programs and other value-adds to drive more revenue through the channel. As it stands today, 80 percent of Interland's revenue is derived through direct sales, with 20 percent coming from the channel. Bova aims to flip-flop that ratio.

Brandishing a technology gem like Trellix's toolset is one way she hopes to help VARs make a better business case for selling outsourced Web-hosting services to its end users. Because the Trellix tools are non-technical in nature, she contends, users can make minor changes to their Web sites or online catalogs without IT intervention,a big plus for SMBs that can't afford to depend on their VARs or hosting companies every time they need to tweak something. Conversely, the VAR is relieved of day-to-day maintenance and can concentrate on adding higher-end value.

"The thing to remember is that the VARs get a recurring revenue stream from their customers through outsourcing hosting to us, and they don't have to service every minor Web-site need," Bova says.

In making a case for a marriage of technical and business skills, Bova argues that if more VARs hired business analysts on staff, the benefits of outsourced hosting would be more clearly understood. "Rather than moving more hardware, VARs could see what the best answer is for a particular customer, which might be hosting, and realize the benefits of contracting and consulting services," she says.

Destined To Partner

Interland's Bulens sees a convergence of the technical and business worlds as an inevitability across the solution-provider landscape, driven mainly by the need to be a more complete provider. He expects more acquisitions like that of Trellix, as well as a spate of partnering among VARs on both sides of the tech/business equation.

"At the end of the day, each provider has a certain core competency...If it walks like a duck, then it's a duck, so to speak," Bulens says. "But then they partner up with equally smart practitioners in other domains, working together for maximum return."

Meanwhile, officials at Tigris Computing believe the key is to infuse the right kind of blood internally to drive a more well-rounded practice. The 7-year-old firm has always espoused a hybrid approach to its employees' skillsets.

"We combine a business background with technical proficiencies,basically the strengths of an engineer with that of a well-heeled MBA, if you will," says David Camp, CMO at New York-based Tigris Consulting, a supply-chain-oriented consulting firm that made the leap into technology-oriented services.

Camp says the company has done a fair amount of "tinkering" over the years to cultivate a multidimensional staff. It hasn't been easy to find people skilled technically and also adept at business-process evaluation and strategic consulting. Tigris' 100-person staff is steeped first in technology know-how, but they must also understand business fundamentals and be comfortable dealing with and advising clients.

At Green Beacon Solutions, which is adding a software reselling and development component to its existing consulting business, employees specialize in one of the two areas but are cross-trained so they are conversant in both, says Benjamin Holtz, the firm's president and CEO.

Acknowledging that it's hard to find people with both sets of skills, Holtz says his company provides internal incentives, such as bonuses, to encourage consultants to become Microsoft-certified on its CRM package, for example.

In the government sector, convergence is calling as well. GTSI, for example, has been broadening its repertoire beyond straight product sales to deliver more technology-consulting expertise, according to John Spotila, president and COO of the Chantilly, Va.-based company.

GTSI has created a number of "technology teams" that are versed in the company's vendor products from the likes of IBM, Sun and Microsoft, as well as in technology areas that include wireless, security and storage. The technology personnel are set to work with customers that GTSI identifies as needing more than straight product-sales engagements.

"Our customers need solutions in the IT space and have a desire to capture best business practices from the private sector," he says. "We work to bring that to bear, whether they need a service provider or a storage product."

Finally, for many solution providers, branching out to a new discipline springs from seeing the market writing on the wall. In 1998, PayMetric opened its doors as a business-consulting firm specializing in SAP packages. By 2000, the company's founders saw margins for consulting engagements slipping and the field getting more and more crowded. So PayMetric began sinking money into research and development, eventually developing a proprietary enterprise-payment software product that it sells predominantly to Fortune 1000 companies. Today, the product comprises 70 percent of its revenue.

"It's been a fundamental evolution," says Jerome Patterson, vice president of sales and services at the Houston-based company. "We needed to distinguish ourselves."

Carolyn A. April (carolyn_april@excite.com) is a technology and business writer based in Nashua, N.H.