VARs Expect 2011 Growth, Still Not Comfortable With Cloud

Partner Pulse

About a third of Synnex's Varnex community aren't involved in managed services or cloud computing solutions yet, and nearly half of the group expects double-digit revenue growth in 2011. This is according to a real-time poll conducted by the distributor at its Varnex Fall Conference held Nov. 7 - 10 in Las Vegas.

Here's a look at the poll results, along with reaction from vendor executives given during a panel discussion at the show.

Cloud Contributions

Chris Frey, vice president of North American commercial channel and retail sales at Lenovo, was surprised by the number of solution providers still not doing any managed services or cloud business.

"Long term for all of your managed services is something that needs to be looked at. SMB customers need someone to manage their infrastructure," Frey said. "Cloud is a little bit longer out, but true managed services I think next year will move a little bit. People are going to need more help. I think your customers need someone they trust to manage their infrastructure."

Cloud Positioning

Marc Monday, senior director of U.S. distribution at Microsoft, said the capital expenditure to operating expenditure story is easy to tell, and VARs should go more in-depth with customers.

"When you're talking to them, talk about when and where they're ready to make the transformation. Customers appreciate choice and your advice. What they want to do today and do tomorrow is a unique opportunity to spend a little more time along with CapEx/OpEx," he said.

Business Outlook

Bob Stegner, senior vice president of North American marketing at Synnex, was pleased to see these results, joking, "That's a good strong increase. Maybe we'll be back here [in Las Vegas for the Varnex conference] next year. It was either going to be the Venetian again or Motel 6."

Cloud Challenges

Mark Bartig, director of midmarket sales at Symantec, said solution providers can look to their vendor partners to help them increase and improve their capabilities selling cloud to customers.

"All of us on the panel, our companies are heavily focused on that. Not just developing new technologies to deliver cloud-based [offerings], but more importantly helping partners deliver that message," he said. "Talk to us about cloud. We are great resources. As vendors we're making significant investments in it. We're studying it. We're talking with partners already in it. We all can bring more to the table to enable you."

Cloud Challenges

Lenovo's Frey said these results show that VARs still need help from vendors to understand cloud solutions.

"Are we communicating appropriately how it fits into a solution? Sometimes as manufacturers, we try to create solutions and say, "Go sell it" vs. asking, "What are you trying to accomplish, and how can we fit?" We can have some discussions on the financial model. All of us have some work to do," Frey said.

Mobile Business

Meaghan Kelly, vice president of channel sales development and strategies at Hewlett-Packard, was pleased to hear VARs' responses in this because mobility, she noted, is more than just a phone.

"It's about how to connect a laptop, phone, printers. The world is becoming more mobile, and connected devices show that people will conduct business and be more productive," Kelly said. "There are so many cloud technologies that allow you to be mobile and connected."

Business Drivers

Said Microsoft's Monday, "There needs to be an [answer] for all of the above. There is a refresh going on. Organic customer growth is an incredible focus for us. Renewal of license agreements, that's a place where you need to start," he said.

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VAR Focus

Symantec's Bartig noted that most VARs are small businesses too and face the same challenges their customers do.

"Profitability becomes key. That's what we hear from end users too. One thing we would encourage you to not do is don't chase the [extra] dime from vendors. Look at long term relationships," he said. "Are the [products you're selling] point products or can they grow with your company. If you buy a point product to make a little more money on, what happens to efficiency when you have to expand?"

Top Challenges

Lenovo's Frey noted VARs chose vertical markets as the top focus in the previous question but also voted it the top challenge for 2011.

"I think a drilldown is needed to give us more information on that," he said.

Marketing Budgets

HP's Kelly noted that these results are promising because marketing was typically the No. 1 line item cut in the last couple of years.

"[Even] if you don't have your own marketing expenses, it's also about how can you leverage our dollars better to market with our products," she said.