Archives For Market

Resellers, VARs, Solution Providers, and Channel Managers – this is an important lesson on the profitability of services.  While your (or your partner’s) services may be very profitable, they may not be as profitable as they seem.  As the market has commoditized, I’m seeing far more short product/install contracts…less consultative, long term engagements.  This is particularly  true in the mid and smaller markets. What is the result.

Listen and see how calculations on profit, gross profit, and net profit are sometimes confusing.  To the sales rep, all GP is good – you get paid, right?  To the person with P&L responsibility, the numbers don’t always add up…I frequently run into people who initially think they have strong services margin.  When I show them how to calculate it, we find profits to be much lower apart from the product sales.

© David Stelzl, 2010

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This morning I presented a webcast on selling security in 2009.  Several points are worth noting as you plan your year.  Before I begin, don’t forget to check out today’s Podcast – a new Podcast comes out every Friday at http://dstelzl.podbean.com/.  This week’s topic presents Part Two of Putting your 2009 Business Plan together.  Given the following, security should be a core focus…

  • VARBusiness’ State of the Market predictions for 2009 list Security as an area for “Robust Growth” . Specifically network security, followed by security appliance sales, Internet security software, security management, and finally access management. If you’re riding the inertia of compliance issues in healthcare, government, and business, you’re in good shape.
  • Storage holds the number two position, but specifically “Recovery Software Solutions”, which of course is a Risk sale – reference security.
  • The third is no surprise – Networking; but expect a heavy focus on wireless implementations. Differentiate with security given the increases in cybercrime via wireless networks.

Also expect to see growth in managed services offerings as companies such as SecurView and Zenith Infotech support VAR efforts to establish recurring revenue offerings.  The winners here will be companies explicitly marketing security event management to address the compliance market.  Pure monitoring in my opinion is a commodity, so take the next step as you consider your offering.

So while some are reporting unemployment rates in the 7+ percent range (US Economy), those companies that have thought through their offering, have the cash to sustain a few down months, and continue to press forward with compelling marketing programs, will likely rise to the top, grow through acquisition, and take on clients left in the sidelines of recession.