Why Do YOU Need The Channel?

As many end users wrestle over the question of whether or not to call on VARs and systems integrators to assist with their technology deployments, three executives I spoke with present a good case in favor of the channel.

Integrators Serve The Customer
Ian Singer, president and CEO of integrator SJ Technologies, Inc. (Scottsdale, AZ), believes there are good reasons for companies to use the services of an integrator. "If we look at software as an example, the question for the end user is why go to a vendor's channel partner rather than to the vendor directly," he says. The answer to that question has a lot to do with the goals of both companies.

"A software developer is in the business of creating architectures, developing the software, funding the development process, and manufacturing and shipping the product," he says. "But when you get into large and complex systems, like those in banks, securities and insurance firms, and manufacturing enterprises, the software connects to other equipment that is not inherently part of the software configuration. In those environments, the main issue quickly becomes support. Support is the one overriding concern end users cite in their decisions to enter into relationships with resellers."

Large technology systems, whether they cost $25,000 or $1 million, will experience problems at some point. If something goes wrong with a system, a fairly sophisticated combination of resources is needed to arrive on-site and isolate the problem, perform high-level diagnostics, and get it operating again. "Systems integration companies have those resources," says Singer. "Integrators have engineers who are trained and certified in software, as well as engineers who understand products that are peripheral to the system, like Microsoft Exchange and SQL, Oracle, Informix, or Sybase database applications. Clients rely on VARs to fix problems and provide troubleshooting in areas that are not simply a function of the software."

Vendors Turn To The Channel
Some end users will find it much easier to retain the services of a VAR as more and more manufacturers put business through the channel. "A lot of vendors are no longer willing to add additional salespeople because of the expense," says Jim Kranicki, COO of value-added distributor WAV, Inc. (West Chicago, IL). "If they can still get the results they are looking for, most vendors would prefer to go through the channel because it keeps down the cost of sales. A salesperson is not an inexpensive investment when you factor in salary, benefits, travel, cell phones, and the cost of a home office. It's an expensive proposition."

The expense of a salesperson becomes an even bigger factor when dealing with smaller accounts. To avoid that cost, many businesses prefer to sell product through the channel. "Vendors would love to deal with customers directly," adds Kranicki. "But the cost of the personnel required to do that necessitates them using channel partners. For channel partners, those smaller end user accounts may be exactly the size of accounts they are looking for. By focusing on smaller accounts, VARs can give end users the attention they want to receive. End users get to speak to someone who has expertise in a particular area they are attempting to address. A medium-sized company might be too small to get personalized service from a vendor, but they will definitely get it from the VAR."

Resellers Are Consultants, Not Just Salesmen
Another benefit VARs and integrators provide is a customer-centric approach. "Our customers have told us that is very valuable to them," says Bill Peldzus, storage consulting marketing manager for the Storage Professional Services division of Imation. "We talk to our customers about their business drivers and their IT objectives first. Prior to even going down the architecture/technology/product path, the most important question an integrator can ask the customer is, 'Why?'. If a customer comes to me and says they need help with storage consolidation, we do not sell them a data consolidation product. We ask them why they are doing data consolidation, what they are trying to achieve, and what their overall goals and objectives are."

Peldzus believes this approach is valuable to the customer because most IT administrators are evaluated on how well they solve a business problem. "They will not get a bonus for installing a SAN [storage area network], but they will get a bonus for demonstrating a higher ROI by consolidating storage and for saving their company dollars by keeping their staff level flat," he says. End users need someone to sell them the best solution for their needs. Even if the vendor has the best intentions and wants to understand the solution and the problem the customer is trying to solve, the chances are they do not have the expertise on things that are outside of their own product set. That is where the value of a consulting firm comes in.

Solution Testing Benefits The End User
Many integrators and consultants have another benefit they bring to the end user table: the ability to test solutions. Many consultants and integrators have access to technology networking labs. "Customers want to be able to kick the tires and be comfortable with a technology before they actually install it into their production environments," notes Peldzus. "VARs, integrators, and consultants with access to networking labs can get customers up to speed and comfortable with a product before it is installed. This service is incredibly valuable to the user. If a customer is still in the evaluation stage, they enjoy the ability to go into a lab where there is no pressure and no one is pushing one product over another. The end user receives an independent evaluation of how the solution will work with their applications."

Finally, end users do not want to make 10 phone calls when a problem arises, attempting to determine where the problem lies and who is responsible. "This may be the biggest change we have seen in the marketplace," says Singer. "The end user wants to be able to make one phone call and have someone resolve the problem. If there is one call, it has to be to an integrator. Manufacturers are not in the business of troubleshooting systems and determining where a problem is. It is not the business of the software manufacturer to fix problems the software is causing with an end user's Oracle database. But that is exactly the job of the integrator. Having that one number to call is a great security blanket for the end user."