The winds of change are blowing politically and economically across the IT industry. Indeed, we might be in the midst of the vastest change the channel has ever seen. This means that the questions resellers need to be asking right now are: is my business relevant? And if not, how do I make it so?
Answering these questions effectively is the biggest challenge the channel has right now. Relevance is not only the hot topic of today but a reality that businesses need to address in order to survive.
To be relevant as a reseller business, you have to be adding value. To do that, the reseller must be doing something different. The problem some of the largest resellers have faced is their own complacency. This is why some of the smaller resellers in the industry are making some gains - they are adding value and differentiating. This is perhaps less of a problem for the country's 10 top resellers, but a lot of firms in the top 11 to 100 remain too vendor-centric.
While I would not say these resellers are fat and lazy, they have not done enough thinking for themselves in recent years in order to be applicable today, never mind tomorrow. Those firms might have had some good times based on hooking onto that one vendor. However, vendors are also experiencing this period of change and their strategies are very different to what has previously been done.
Those vendors can't just transform their business overnight - they have to do so gradually. For example, we saw Cisco change its partner metrics last year and that caused a huge amount of pain to many of its Gold Partners, which subsequently have had to change their own strategies.
In response, many resellers are instead looking to be vendor-agnostic, developing a multi-vendor proposition. This is because unless you have a very strong technology brand, such as Apple or Google - which is not the norm - then end users are actually more focused on a solution-as-a-service.
They want a business outcome and by providing just that, resellers maintain their customer appeal. In turn, this means that resellers require more vendors in their portfolio as they need more products and services to be able to package something of value rather than purely reselling.
For now, there is still a place for resellers to simply act as the middle man, but that will continue to decrease as time goes on. As a result, resellers need to add more value and they need to have a better quality of business. Today, it is more about how those resellers are going to start to package their offering by collaborating with other technology firms. This will ensure their proposition remains pertinent to the end user.
A vital part of this is taking notice of the research in the industry and asking 'if this is the state of the market, are we taking our own medicine in doing business in the right way?' A large part of relevance for a reseller is simply asking the question 'are we going to have a future?'
Perhaps the most important part of that is assessing what the reseller is offering the end user. It is vital to be honest about that end-user relationship - there is probably much less loyalty there than resellers would ever want to admit. End users want a quality solution, but they still want it at the best price.
Those end users don't want to feel that their reseller partners are taking advantage of them by adding unnecessary consultancy or service time. Historically some resellers have done this as that's where the margin is made; the margin is just not there on the products alone.
Over the last 20 years, listening to the requirements of the vendor and aligning with its technology has shaped the direction of the channel. This doesn't matter anymore; the balance of power has significantly shifted towards the relevance for the end user.
This is because the way in which we consume technology has shifted dramatically. People want on-demand, instant outcome-based offerings that work. Today we get very frustrated if we suffer bad service with something, while end users are much more informed about what they are buying.
This should all lead a reseller to ask itself the one very direct and harsh question: 'will we still be in business in five years' time?' The truth is, some of you reading this won't be. Don't fall into the trap of 'it won't be us'. It only won't be you if you move with a changing industry and maintain relevancy to your end-user customers.
You need that relevancy, you need a flexible business model, and you need a solution-based offering pulled together from a broader vendor-agnostic offering to achieve this. If you get those aspects right, you stand the best possible chance of your business not only surviving but flourishing in five years' time.
Shaun Lynn will present at the CRN On event on 7 November in London. Please click here for further details.
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