I’ve spent my election week in Chicago, with over cast skies and a couple of busy days working on reseller business strategy. If you remember the best seller – Blue Ocean Strategy, co-author Kim offers several paths to creating a new break-through strategy for you industry. This is something VARs desperately need in today’s market, and of the 6 paths offered, one stands out as a way to help VARs re-engineer (Ref. Michael Hammer) their business. Path 3 – The Chain of Buyers.
The traditional var sells to IT – influencers with limited budgets. In the book, Kim writes about a strategy Bloomburg used to get around IT with their application. Here’s the quotes, “The traders and analysts wielded their power within their firms to force IT managers to purchase Bloomberg terminals.”
This is a powerful concept that is unleashed with sales people start thinking about “Asset Owners” – a term I introduced in The House & the Cloud. If you look across the multitudes of resellers, you’ll see they are all spending money to compete on the same things. They have technical talent, basic sales people, broad technology solutions, managed services, discounted prices, similar rates, etc. They call low, sell inexpensive projects in comparison to the big consulting firms, deliver product install, and carry vendor certifications. Their margins are low, and they are working to build valuation through managed services – annuity business.
The consulting firms on the other hand, hire high end people, big degrees, charge big prices, call on executives, do large projects, focus on large clients (mostly) and cost a fortune. They too compete on the same things.
This week we are are formulating new strategies to compete in the market place – with higher margin, higher level relationships, but without the high cost of entry, enormous project fees, very expensive people, and complexity. I believe their is a better way to build this business, but if the VAR continues to compete on the same things it’s focused on for the past twenty years – cloud trends, BOYD, and scaled down computers like smart phones and tablets will threaten future profits.
Join us later this month for an intense planning and strategy session in Charlotte NC. Read more here and sign up – I just have about 4 slots left: http://stelzlplan.eventbrite.com/#
© 2012, David Stelzl