Services VARs In Demand
Networking, storage, and other technology vendors are lining up to court resellers who see the value of the recurring revenue stream.
Technology vendors are always clamoring for reseller partners, but lately they've been asking for one variety - services-oriented VARs. Why? These resellers form long-term relationships with customers that enable them to sell more vendor product over time. They don't just sell the end user a box and walk away. These VARs develop service programs that put them in regular contact with customers, provide recurring revenue streams, and help uncover the need for more technology solutions.
Services VARs Proactively Protect Systems
At VARVision Spring 2002, an event designed to match technology companies with reseller partners, many vendors stressed their desire to court VARs whose businesses are built around services. One of the strongest pleas came from Darrek Porter, director of corporate communications for Oculan (Raleigh, NC), a provider of remote management services and network management appliances. In less than a year, Oculan has aggressively built its channel to more than 100 resellers. However, the company has discovered that services VARs drive more revenue and cultivate better customer relationships than other types of partners. Other networking and server companies, like Net Integration Technologies (Markham, Ontario) and SGI (Mountain View, CA), have made similar discoveries. Both offer network performance and diagnostic software with their servers that are ideal for services-oriented resellers. With a regular view into their customers' networks and systems, these VARs can proactively address client technology problems and needs.
Storage, Security, Wireless Need To Be Monitored
The networking market isn't the only segment seeking out this special type of reseller. In the storage market, services VARs are ideal candidates for storage resource management (SRM) software from companies like Precise-WQuinn (Reston, VA), BMC Software (Houston), or Computer Associates (Islandia, NY). SRM software provides a view into the allocation of data on different storage devices and pinpoints any wasted space. This allows the services VAR to recommend ways to better utilize existing storage resources, as well as the need for more storage devices. (Imagine how much of an ally you'd be to your customers if you showed them how to do more with what they already had!) Security is another technology where VARs have a great opportunity to sell a services model. Celestix (Fremont, CA), for example, offers SecureAir, a device that gives VARs the ability to monitor and provide wireless communications on networks.
Building Your Business Around Services
In this issue, we feature a networking VAR that has completely built its business around services. Founded only a year ago, Symetriq (Bloomington, MN) expects to reach revenues of $5 million in 2002. What's the secret behind this rapid growth? Surprisingly, it is that Symetriq sells no product - rather, customers pay a monthly fee for the equipment and monitoring services. This is an appealing proposition for small- to medium-sized businesses that don't have the resources to pay for a networking solution up-front or an IT staff person to regularly monitor the network. Symetriq President and CEO Kojo Benjamin Taylor modeled his business after the likes of KPMG Consulting (McLean, VA) and IBM Global Services (White Plains, NY). While the networking market is a good fit for the services-oriented approach to reselling, it certainly isn't the only one. Opportunities for VARs to restructure their businesses around a services model are endless. All you need to do is imagine the possibilities.