Are Wireless Services Part Of Your Total Solution?
VARs with wireless wide area network (WWAN) expertise are finding a new source of profit from wireless carrier activation fees.
These days, a lot of VARs and integrators talk about how their companies are unique because they sell a total solution. Riiiight. C'mon folks, wake up. Touting the total solution concept is about as unique as developing a new reality TV show. Everybody is doing it, and more viewers are starting to switch the channel in search of something more ... well, just something more.
Your customers have heard the total solution spiel before and are looking for anything to trigger the dormant part of the brain responsible for the "That's-interesting-and-makes-a-lot-of-sense" reaction. Of course, you want to stimulate that part of their brain responsible for the "I'll-buy-that" reaction.
But choosing whether or not to offer a total solution is a no-brainer. People like the one-stop-shop concept. After all, when was the last time you didn't buy some kind of value meal at your local fast food chain? Instead, what I'm suggesting is to redefine what comprises your particular total solution. For instance, if you are a VAR or integrator selling wireless wide area network (WWAN) solutions, do you also sell the wireless service plan the customer needs to use your solution? Chances are, you don't. But if you want to add this service to stand out in the crowd, time is running out.
Do Your Wireless Service Plan Homework
Adding wireless carrier services to your portfolio should be evaluated just as you would consider selling a new technology. "VARs should focus on two areas when selecting a wireless carrier: product and program," stated Ryan Slack, senior director, business solutions program at Sprint's PCS division (Kansas City, KS). "In the product category they should consider attributes of the carrier's wireless data offering. These attributes include coverage, average speed, pricing, device selection, brand strength, and latency. In the program area, VARs should evaluate how well the carrier supports indirect channel partners. For example, they should research compensation programs, hardware margin support, sales support resources, restricted or off-limits accounts, and channel conflict with direct sales reps."
Know Which Network Is Best For You
Remember, you are adding wireless service plans to your total solution. In other words, this isn't a freestanding product; it's part of the whole puzzle. Thus, you need to understand the intricacies of a WWAN for your solution to sell (and work). According to Michael Lang, president and CEO of Airfinity, LLC (Warminster, PA) (a wireless data hardware and network service activation provider), VARs commonly underestimate the complexities involved when deploying their WWAN data solutions. "How the network behaves in regard to a VAR's specific hardware and/or software application is something that shouldn't be overlooked," he said. "In fact, the network should be under scrutiny simultaneously with the application."
Tom Lehn, VP of technology for RACO Wireless (Cincinnati), a division of RACO Industries, agrees with Lang's assessment. In fact, Lehn has experienced firsthand the problems VARs encounter with WWANs since RACO (a solution provider specializing in wireless communications, data collection, and vehicle tracking) added its wireless division (a national premier dealer for T-Mobile wireless services). "The most common mistake I see VARs making is trying to force applications onto a wireless network that is not the best choice for the applications," he explained. "This usually happens because the VAR only has a relationship with a single carrier or only has equipment that runs on a particular network. Another common mistake is signing an exclusive agreement that prevents the VAR from using the network best suited for an application."
Activation Commissions = Profit
Obviously, wireless communication isn't a fad. Your potential customer base isn't going to go away soon; it's going to grow. In fact, in a recent study, IDC concluded that the number of mobile workers will increase by 12.7 million in five years and that 2/3 of U.S. workers will be mobile by the end of 2006. True, some of the hardware for wireless applications is already being offered with slim margins. But, that is all the more reason why VARs should consider becoming a wireless service provider.
"Selling wireless service can be profitable but requires a change in the way VARs look at their business," observed Lehn. "The profit comes from activation commissions from the carrier. For most of us who have not been involved in the wireless industry, this is a different business model and one we have to accept if we want to be able to provide a complete wireless solution. VARs that choose to provide wireless devices and services will find new reasons to call on existing customers. For instance, VARs will be able to build new wireless applications or new modules for existing applications, generating additional profit."
Slack also said selling wireless carrier services takes a different sales mentality. He stressed that VARs need to understand the differences between selling WWAN and selling typical IT hardware. "The majority of the value of a wireless data solution comes from the service plan, not the hardware," he said. "In order to unlock this value, the VAR must become proficient in some of the complexities associated with service plans [e.g. monthly charges, coverage maps, network technologies]."
Consolidation, 3G, Shorter Adoption Cycles
The wireless carrier market is constantly in flux with consolidations and mergers expected to continue over the next few years. "We can expect fierce competition between the carriers for both consumer and corporate enterprise customers," predicted Lang. "I also think we're about to see some new hardware that should provide easier and shorter adoption cycles for wireless solutions."
All of the experts interviewed for this article predict future wireless networks will offer better speeds, coverage, and reliability. However, the hype surrounding the creation of 3G networks (which promise 2 Mbps [megabits per second] speed) has now become like white noise, always present but never distinct. And although 2.5G networks have been deployed, the largest use of these speedy data thoroughfares is still e-mail. Nevertheless, Slack is convinced 3G networks will open the door for enterprise WWAN applications (e.g. sales force automation, customer relationship management). "A large portion of enterprise workers are mobile for a considerable percentage of their day," he said. "These people have the same basic information needs as when they are tethered to a desktop. VARs are a logical group to lead this adoption cycle, as they are the firms that often deploy both the IT hardware and the enterprise applications that people already use in a desktop environment."
In short, VARs with WWAN solution expertise are in the right field at the right time. Wireless carriers are looking for VARs to become authorized dealers. The WWAN technology is getting better each year. And, enterprise companies are seeking total solutions that simplify their purchasing processes by having one VAR or integrator provide all of the components of a system - including airtime. But this opportunity won't last long. Many integrators like RACO have already developed separate divisions for wireless carrier services.
So, keep your total solution pitch, but just add to it. After all, there are profits to be made with wireless services, and you might as well be the one collecting those checks.