A number of emerging technology resellers are breaking from the norm by employing only technical staff. Tom Wright asks what's behind the trend, and how it is possible for a reseller to function without any salespeople
Running a firm with no sales staff in an industry as sales-driven as the channel may appear to be business suicide.
But a number of companies are turning the traditional reseller model on its head and operating businesses that are 100 per cent led by the technical side.
The boom in emerging technology vendors and product areas means that traditional sales staff no longer possess the skills to sound credible in front of clients, these firms argue.
Newer technologies such as software-defined solutions and hyperconvergence require the touch of a technician, not a salesperson, according to Carl Gottlieb, whose reseller Cognition currently employs eight staff, all of whom are technical.
Gottlieb, who founded the Cylance and Palo Alto partner in 2014, claimed that the recent proliferation in vendors and products means salespeople are struggling more than ever to get to grips with the technology.
"The landscape has become a lot wider and a lot deeper," he said. "If you think about the number of vendors you come across now, there are still the really big ones such as Check Point, Cisco, Juniper and so on, but there's a huge long tail of all the other ones.
"And where the big vendors used to have one product such as a firewall, they now have 20."
Cut out the middleman
With this in mind, a reseller with an all-technical approach often comes up trumps with customers, Gottlieb argued.
"The traditional model at pretty much every reseller and vendor in the world is to have every meeting with a technical person and a salesperson present - it's always two people in the room. If you ask any customer they'll say ‘I don't like it," - Carl Gottlieb, Cognition
Where traditional end-user meetings would see the customer sit down with both a member of the reseller's sales team and the technical team, end users are now seeing an opportunity to cut out the middleman and go straight for the technical support, he claimed.
"From the very first meeting they want to discuss their problems and requirements, and get an intelligent opinion immediately," Gottlieb said. "They don't want that middleman salesperson trying to translate it into something to their techie who sits alongside them.
"The traditional model at pretty much every reseller and vendor in the world is to have every meeting with a technical person and a salesperson present - it's always two people in the room. If you ask any customer they'll say ‘I don't like it, I'd just rather talk to the person who knows', but the sales guys don't want to leave the tech person alone."
Although the downside to having no sales staff is that there is no one on the phone bringing in leads, this is offset by referrals, Gottlieb said.
The dream for all resellers, he explained, is to have people who are trained in both the sales side and the technical side - putting anyone who already meets these criteria in high demand among vendors at the moment.
"One of the reasons hardly anyone does it is because there are so few people who are very technically aware, have expertise in the field, and are also commercially astute," he said.
"It's one of the reasons that presales engineers - these half-sales, half-technical people - are in such high demand in the UK and are paid so well for what they do.
"If you talk to any of the vendors and ask them if they are looking for presales people, they'll say yes and they'll be paying probably £100,000 basic plus £50,000 commission. It's very hard to find these people."
No sales needed
VMware, Citrix, Veeam and Microsoft partner Cutter Group is another emerging technology consultancy that employs only technical staff.
Despite having just 12 employees - none of whom work in sales - Cutter is able to service around 1,000 servers, 50,000 desktops and 300,000 users in 19 countries through its virtualisation expertise.
"From day one we've never had a sales team," managing director Andy Trevor said. "We've always been lucky that work comes hunting for us."
Cutter does provide its services direct to end users, but has found that its business into resellers has increased over recent years, now making up around 70 per cent of its £1.75m revenue.
Trevor explained that resellers are finding it increasingly difficult to offer the necessary services around more complex areas of IT, such as virtualisation.
When situations like this arise, channel firms will contact Cutter, asking them to provide white-labelled services; Cutter itself does not have to generate its own leads because the reseller is doing it for them.
"They get paid for doing nothing, basically," he explained.
"We take the majority of the risk, they take all the tin sale, they take all the software sale, but they make good margin on our professional services - and on a support basis they make recurring revenue on their customer maintaining the support contract.
"I've got a fleet of 300 people [in the reseller sector] that I don't pay a penny. We need them generating business for us. I'm sure we could go and generate more of our own business but we don't need to. Everybody wins."
With the rate at which new vendors and products emerge tipped to continue accelerating, sales staff will have to become more technically aware of the products they are selling, according to Sam Murdoch, director at distributor Securicom.
He claimed that resellers working in areas of IT such as virtualisation and software-defined infrastructure are already preparing for the shift to a greater technical focus.
"Everyone is moving that way because there is less and less tin getting sold as people move to virtualised environments," he said. "On the networking side you've got people like Cato Networks who are ripping out boxes left, right and centre and just putting in software.
"Salespeople will always be required but they need to know more about the product. You can't say [to a customer] ‘you've asked for HP storage, we do EMC - this one is better and here's your price'. Cato Networks [for example] is completely different so they need to know about the products and how they'll fit in in the next five years, so obviously they need to be more technical."
Murdoch drew the line at saying that sales staff will become obsolete in the future, pointing out that new customers will also need to be sought at some stage in a reseller's life.
"One of our partners was started by five engineers - the only problem is, technical people don't sell and sales people aren't technical. Once you've gone through your referrals and customers, how do you grow the business past your own knowledge?
"They might have no salespeople at the moment because they're exhausting all their current relationships, but unless a vendor or someone is going to be handing you leads, you still need someone sitting there making calls and setting up meetings."
Cognition's Gottlieb said that the channel will struggle to build entire technology-led sales teams because of the huge lack of skilled IT professionals in the UK. With this in mind, he claimed it is more likely that technicians will be taught how to sell, not the other way around.
"I think sales skills are easier to develop than technical understanding, because good selling is not magic; it's more of an art [combined with] personality skills," he said.
"[Sales skills] are much easier to develop than someone who can fully understand GDPR (General Data Protection Regulation), for example.
"The kind of people we look for are solid experts in their field who are great with people."
Cutter's Trevor said that while the firm itself does not directly employ any sales staff, it would not be able to operate as successfully without the lead-generation employees at the resellers it services.
"I think [salespeople] will always be needed because technical people, and I'd count ourselves among this, are rubbish at doing that kind of thing. We're not good at picking up the phone and generating leads."