New solutions for old problems

There is a real challenge to the channel and if the industry is to move forward, it is time for a fresh approach, says Ian Cook

We all know the quickest way to profoundly irritate anyone in the channel is to call them a “box shifter”. The conventional wisdom for resellers is that they should strive to add value in everything they do.

But underlying this aspiration, the reality for many companies in the channel is that they may be closer to the definition than they would like to admit – obsessed with shifting more products and services more quickly as the route to survival.

It has been argued in this magazine that financing methods such as all-embracing service contracts and leasing deals is the route to combating ever-lengthening replacement cycles.

But this is not an adequate response to the real challenge in the industry and the channel that serves it. There is no panacea in sight that offers the potential for the sale of a complete set of replacement technologies and applications.

Paradoxically, as their buying has slowed, organisations have become increasingly dependent on IT for their existence, let alone their competitive advantage. Along with this, business managers are ever more influential on every IT purchasing decision.

In this situation the traditional “sell product, add-on services” model is ill-equipped to deliver either value to customers or recurring revenues to the channel. Why?

Because a profound change is taking place in the way organisations prefer to buy. Increasingly, customers do not want just to take more infrastructure on board, no matter how large the discount or how elegant the finance package.

What they want is computing and communications power with a guarantee that it will allow them to hit or exceed specific business or organisational goals.

So, shortening product cycles in a maturing IT industry will demand fresh thinking, not just in finance, but in the way the channel adds value.

Developing a new relationship or even upgrading a customer site is much more likely to succeed if offered with a managed services approach linked to specific service and business level agreements. This is an entirely new mind-set to the majority of the reseller community, but it is one that needs to be adopted quickly.

In a maturing industry, customers will need more than just financial carrots to endure the operational risk that traditional systems and service upgrades promise. If the industry is to move forward, it is time for a fresh approach.

Ian Cook is the chief executive of VAR Logicalis’ European operations.