From Reseller To Storage Solutions Integrator
Still moving boxes? VAR AMC Computer Corp. turned its business around to become a $90 million storage solutions integrator.
How much time do you spend reselling hardware versus actually building and integrating storage solutions for your customers? It's a question all VARs have to face, and AMC Computer Corp. (New York) was no exception. Two years ago, Michael Israel, senior VP of sales and professional services at AMC, felt his company was spending too much time moving boxes and not enough time integrating storage solutions. "A couple years ago, we could sit around and wait for the fax machine to ring," he says. "We did not have to do a lot of thinking or planning, and we did not have to worry where next month's opportunities would come from."
At that time, when it seemed every company was buying hardware, AMC made sure it was there to provide it. Israel states that 80% of his company's business was transaction-based (customers calling and ordering equipment they needed) and only 20% was project-based (AMC providing integration services for customers). "People would call up and say they needed 12 RAID [redundant array of independent disks] arrays or 500 disk drives," he says. "Very few of our customers needed help putting in a new storage farm."
Now, just two years later, 80% of AMC's business is project-based, and just 20% is transaction-based. "We have completely reengineered ourselves in the past two years," says Israel. "To make the change, we had to change everything from our sales philosophy to our delivery model. We have built storage solutions around our core product offerings, and those solutions now lead our sales initiative. We now engage customers in a conversation to find out how they are managing their data and what business technology problems they face. Then we recommend solutions based on those problems."
Identify Storage-Related Issues
To successfully implement its plan, AMC had to first identify those business problems faced by its customers. The company could then design storage solutions that address those problems and market them to multiple customers. "If we come across one law firm that has a problem with data in their satellite offices, more than likely other law firms are having the same types of issues," Israel cites as an example. "We are now taking one successful installation we performed, putting together a cross-vendor solution, and remarketing it to other companies in that vertical market."
To identify issues that were important to customers, AMC went directly to its clients. "When we did that, we started hearing the same stories from everyone," says Israel. "We heard about data corruption, server consolidation, problems with backup windows and data replication, and concerns over proper asset management. Many customers were also concerned that their security audits were not thorough enough."
Assemble A Team Of VAR-Friendly Vendors
After training its sales team to focus on customer pain points, AMC had to choose its vendors. "We wanted our salespeople to offer the best products our technical support team could service," says Israel. "It is difficult to support every product on the market, so we did not want to sell Quantum and ADIC drives one day and StorageTek or HP the next. We had to decide what were the best products to incorporate into our solutions."
To identify potential partners, AMC trained its professional services staff on all of the storage technologies and products. The company even ran tests on the equipment it received from various vendors. But in the end, the deciding factor had little to do with technology. "Realistically, the tape library companies have comparable products," asserts Israel. "Our decision really came down to the level of support and backing each company had for its channel partners. We mainly looked at what companies were supporting the channel, whether they could support us in the field, and what product training and support they offered." Based on that analysis, AMC came up with a short list of preferred vendors.
"We now have a list of preferred vendor products, and those are now the ones we are trained on and are able to support," says Israel. "It's no longer a question of what products are we able to sell. It's what products can we integrate into our solutions and into our client's network."
Sales-Partnering With Vendors
To make its sales force more effective, AMC went back to a management style that has not been seen in the channel in a while. The company looked at its sales force and its primary vendors and assigned individual salespeople to vendors. "I now have two or three salespeople mapped to the EMC New York small and medium business team," notes Israel. "We have the same thing in New Jersey and the other markets we serve."
Salespeople from AMC and the vendor companies work on account penetration and account planning strategies together. AMC might get a list of a vendor's prospect accounts in a specific area and cold call those accounts offering solutions that use the vendor's products.
Turn Vendor Products Into Storage Solutions
After deciding on its primary vendors, AMC had to take the hardware and software products and create solutions. According to Israel, any product by itself is not a revenue generator. "The first question I ask a vendor is what corresponding hardware and software products can be integrated with their product," says Israel. "I need to know what is the overall package."
Recently, AMC put together a storage solution wrapped around the Quantum DX30 (a disk-to-disk storage product). The solution incorporates the DX30, a tape library, and software from VERITAS Software. "This solution allows us to solve critical issues that we encounter around backup windows," says Israel. "The solution allows us to back up to disk and then archive off of the disk. This shrinks the backup window and is a big savings for clients that have very limited backup time."
AMC's new sales approach has put some restraints on its sales force, but has allowed the technical support team to become experts. "Our salespeople, who used to sell just about everything, are now fixated on a handful of solutions," says Israel. "But, because we are performing repetitive engagements, the employees on our professional services staff are now experts on these technologies. I no longer have to have my highest level engineer installing DX30s because we have done it so many times that our less experienced guys can be out there doing that type of work."
AMC believes having engineering support available to the salespeople is also very important. Twice a week, sales reps are in a conference room alongside engineers. The reps make cold calls into accounts to pitch storage solutions. If a customer has a question or wants more information, the engineer can be conferenced in right then and there.
Engineers Support Sales
AMC is also doing more outbound telemarketing. Focused marketing events are also a part of the sales mix. In the past, AMC had not spent much time pursuing these opportunities. The company will participate in technical seminars along with its vendor partners, such as roundtable discussions in the New York area. But the company is also taking part in smaller vertical market shows, highlighting solutions tailored to those verticals.
Two years ago, when AMC decided to turn the business around, the company downsized from 150 to 125 employees. Now it is back up to 150. Although revenue has dropped by 30%, profitability is now at the same level it was two years ago. "We are selling more valuable solutions," says Israel. "Those solutions offer much higher margins than just moving hardware."