To put a new spin on an old adage, when IT resellers sneeze, the entire channel catches a cold. And right now partners are reaching for the tissues, cold remedies and chicken soup.
Channel partners who thrived during the 1990s boom and survived the bursting of the dot-com bubble today are doing business in a whole new environment. Weve returned to growth, albeit modest growth. In some ways modest growth is good. Its a signal that our industry is maturing and is not as susceptible to the roller coaster rides of the past. With maturity comes responsibility, and it is in all of our interests to look after the financial wellbeing of the entire channel.
Customers are more sophisticated in the way they buy technology products and services. Increasingly, they look to their suppliers to counsel them on technology solutions that solve business problems and demonstrate quick and quantifiable return on investment. Customers are increasingly disappointed with product-oriented answers provided by resellers operating under traditional business models. Significant numbers of channel partners are not succeeding because they are not providing the kinds of solutions, services and advice their customers need and want.
The consequence is that many partners will go out of business or fail to realize their full growth potential as the market opportunities expand around them. Distributors have a less reliable channel network. For technology manufacturers this means unrealized revenue growth and profit potential due to ever-widening coverage and competency gaps in the channel.
Earlier this year the The Computing Technology Industry Association Inc. (CompTIA) asked more than a dozen major technology OEMs to identify the areas where their channel partners needed support. Ninety percent said incorporating services into the offering, while 82 percent identified consultative solution selling. Clearly the transformation from box pusher to trusted adviser and solutions provider is critical to curing what ails our partner community. Its not enough for solutions providers to have product knowledge. They also need the knowledge to sell solutions and manage their businesses.
Owners of IT solutions provider businesses recognize their need to transition to more profitable models. Among the challenges they face are developing the skills to sell consultatively, identifying and securing service opportunities, and better managing expenses through variable cost models.
Peter Drucker, regarded as the founding father of the study of management by many experts in the worlds of business and academia said, The most valuable asset of a 20th century company was its production equipment. The most valuable asset of a 21st century institution, whether business or nonbusiness, will be its knowledge workers and their productivity.
Drucker believes knowledge workers have two main needs: formal education that enables them to enter knowledge work in the first place; and continuing education throughout their working lives to keep their knowledge up-to-date. Schooling traditionally stopped when work began. But in todays knowledge society learning can never stop. This same principle is as relevant to the business operator as it is to the individual.
Among the manufacturers surveyed by CompTIA, about 75 percent provide market development funds to encourage partners to take training, or provide self-paced training, such as Web-based instruction, CDs and books. About two-thirds host road shows and channel partner events or contract with outside consultants and vendors to provide applicable training. The manufacturers are spending anywhere from $15,000 to $10 million annually to educate and trade their channel partners. Clearly, technology OEMs that want to develop channel partners who have the right levels of knowledge to successfully sell and support their complex solutions also are preparing the channel with business education and skills.
The challenge for the individual partner, then, is to know which course, seminar or workshop is most appropriate for his or her business. In some cases, manufacturers are sending their partners to duplicate training, increasing costs for the industry, both in dollars and resources. If a reseller pursues continuing education with manufacturers A, B and C, does the same reseller also need to train with companies X, Y and Z?
The adoption of foundation-level skills standards for IT professionals that are widely recognized across our industry has removed millions of dollars in redundant training and hiring costs from the channel. CompTIA believes there is a similar significant opportunity for our industry to reduce costs in the area of business education for resellers.
To that end, the association has created a Reseller Transformation Advisory Council. Made up of representatives of leading OEMs of hardware and software products sold through the channel, this council is tasked with promoting economic success throughout the IT channel by improving the marketing, sales and delivery of technology-based solutions to customers. Among the councils goals:
The time is here for the entire industry manufacturers, distributors, resellers, systems integrators, solutions providers to come together to provide the basic business acumen training. By helping solutions providers build business models that make sense for their long-term success, the financial strength of the entire IT community is enhanced. Having a healthy channel means stability for all.
William Vanderbilt is vice president of Education and Training for the Computing Technology Industry Association (CompTIA), the global trade association for the IT industry. CompTIAs CT Pioneers are a group of convergence solutions providers, manufacturers, distributors and interconnect dealers who take an active role in shaping the convergence technologies industry.
Join CompTIA for these upcoming convergence events:
CompTIAs Annual Breakaway Conference
Held Aug. 3-5 at Caesars Palace in Las Vegas, CompTIAs Breakaway conference provides three information-packed days of cutting-edge business solutions, compelling educational sessions and valuable networking opportunities with leading executives. No other industry event provides this unique collaborative environment where you can gain insight on the latest industry trends, build strategic partnerships and discover new ways to grow your business. For more information, visit: www.comptia.org/events/breakaway.
The CompTIA Convergence Solutions Provider Forum
Held at the PHONE+ Fall 2005 Channel Partners Conference & Expo, from 10 a.m. to noon, Sept. 22, at the Hyatt Regency Chicago, this forum provides convergence solutions providers an opportunity to engage in interactive roundtable discussions on a variety of channel issues. Examples of discussion topics include state of the industry, emerging technologies, successful sales approaches, and new strategies for building the solutions provider business. These interactive discussions are designed to share best practices on how to more effectively sell products and services to new and existing clients. For more information, visit www.phoneplusmag.com/channelpartners/chicago2005.
The article, Extending VoIPs Lifeline, in PHONE+ July 2005, Pages 22-24, was subtitled incorrectly. It should have read: Earthlink, Covad to Trial Line-Powered Service. PHONE+ apologizes for the error.