Magazine Article | May 1, 2000

VARs, Integrators: You've Come A Long Way!

Source: Business Solutions Magazine

Business Solutions' 10th anniversary issue finds the channel has gone through many transformations. But a recent channel event shows we've still got a journey ahead of us.

Business Solutions, May 2000
What technologies did your business sell in 1990? If Business Solutions polled its readers on this question, the answers would vary from copiers to electronic cash registers to mainframe computers to early personal computers. Readers also may have answered accounting software or business forms. In 1990, some readers of Business Solutions were just beginning to envision starting a reseller business.

The technologies and the channel have definitely progressed in the last decade. This issue marks the 10th anniversary of Business Solutions. In May 1990, Corry Publishing began its foray into technology, publishing Business Electronics Dealer. This first magazine was targeted toward dealers of office automation and business systems.

Business Solutions Changes With The Channel
Since its inception, the magazine has seen a number of name changes, including Business Systems Dealer, Business Systems, and, of course, Business Solutions. The terms used to describe channel businesses (our readers) are also different. Yesterday's dealers and resellers are now VARs, integrators, and solution providers. Business Solutions' technology coverage has evolved along with the market. Products like copiers, fax machines, and shredders have become mass-distributed commodities with low margins.

New technologies have been introduced that require integration, service, and other value-added VAR skills. In the last 10 years, Business Solutions added coverage of technology solutions, such as PC-based point of sale (POS) systems, bar coding, data collection, imaging, and mass storage. The magazine continues to expand its spectrum of technology coverage to include radio frequency identification (RFID), warehouse management systems (WMSs), enterprise resource planning (ERP), business intelligence, data warehousing, customer relationship management (CRM), portals, and e-business.

Business Solutions' Dedication To Channel Doesn't Waiver
It may seem hard to recognize Business Solutions from its early days as Business Electronics Dealer. However, the magazine's focus on the channel has held true since 1990. Business Solutions' mission is "helping VARs and integrators increase profits." Over the years, through countless interviews and stories with channel companies, we've identified these key business strategies of successful VARs and integrators, including:
  • integrating multiple technologies into a total solution to better meet customer needs
  • identifying new, high-margin technology products to add to their business' product line
  • pinpointing new applications for technology solutions
  • identifying new vertical markets in need of technology.
In every issue of Business Solutions, we include articles about VARs that use these strategies. These articles include actionable information to help your company implement these strategies.

Many Channel Challenges Still Lie Ahead
Our job at Business Solutions is far from done. Technologies continue to be introduced at a breakneck pace. And the Web and Internet companies have heightened that pace. A recent event, coproduced by Business Solutions, brought to light the Web's impact on the channel. The AIDC Channel Marketing Summit, developed by technology consultants Rick Bushnell and Karen Longe, was held Feb. 15-16 in Clearwater Beach, FL. Eighty executives from automatic identification and data collection (AIDC) hardware manufacturers, distributors, VARs, and integrators gathered to discuss the challenges of their industry. AIDC suppliers such as Intermec, ScanSource, Symbol Technologies, WhereNet, and Zebra Technologies participated in the summit. Top AIDC VARs and integrators such as Data Recognition, Lowry Computer Products, and Peak Technologies were also on hand. While the summit was designed for the AIDC industry, the issues addressed at this event are relevant for all types of technology industries.

Improving Vendor And VAR Relationships
Summit participants revealed some difficulties in today's vendor-VAR relationships. Most vendors offer channel programs that provide VARs and integrators with incentives for selling their products. However, VARs such as Mike Lowry, president of Lowry Computer Products, argue that these programs need to be updated:
  • Eliminate the vendor's regional sales representative as the main contact between the vendor and the VAR. Lowry recommends a multifaceted vendor representative that can work with a VAR on shared issues with sales, technical support, financing, and other departments.
  • Develop multi-vendor cooperative (co-op) advertising programs. Typically, a vendor gives co-op advertising funds to its top sales performers. These VARs can develop ads with these funds, as long as the vendor's product is prominently displayed in the ads. However, these ads typically promote only one product – not the entire solution the VAR is trying to sell.
  • Create better discounts or sales incentives. Vendors offer trips and other prizes to give VARs and integrators incentives to sell more of their products. Most VARs and integrators sell products from multiple vendors. As a result, VAR salespeople often sell one vendor's product for a while, then another vendor's product to coincide with contests. Lowry recommends that vendors develop a score card to evaluate VARs based on overall sales, technical support, and other key areas. The vendor can reward its channel partners based on the overall picture.
The Internet's Impact On The Channel
Many VARs and integrators at the Summit told stories of how the Internet is cutting into their businesses. Some AIDC hardware vendors and distributors have started offering products direct to end users over the Web. And, with predictions that the market for business-to-business (B2B) e-commerce will reach $1.3 trillion by 2003 (Forrester Research), these Web sales will continue to grow. However, Ed Dato, president and founder of Data Recognition, challenged his fellow VARs to sell their value-adds from their first meeting with a prospective client. He recommended that VARs explain the services and integration they can provide and the additional costs involved. To protect themselves from being undercut by the Web, VARs need to charge up-front consulting fees to do solution designs. VARs should also consider a different service pricing structure for customers who buy their products direct.

Summit participants also debated over the Internet's impact on their supply chain. VARs recommended that vendors and distributors make better use of the Web for vendor-VAR interactions, such as product ordering, product tracking, technical support, and marketing materials. A number of vendors discussed a long-term project of building a Web trading community for the AIDC vendors, distributors, VARs, and even end users.

Business Solutions: Working For Your Success
The improvements discussed at the AIDC Channel Marketing Summit show that the technology channel is still a work in progress. Even after 10 years of serving VARs and integrators, there is still work to be done.

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