It is a perennial dilemma for the average reseller. Perhaps even THE perennial dilemma. Do you stick to the niches you know and consequently pass up the high-value, big ticket, glacial roll-out deals because you do not have the skills, the logistics and the headcount to cope? Or do you try to turn yourself into a hulking behemoth that does the lot with all the massive associated risk and expense; which itself is far easier said than done, of course.
Talk about Hobson’s Choice.
In reality, most resellers try to plough a furrow somewhere down the middle of
these two approaches. A sort of “No job is too big, no fee is too big” stance.
The problem being, obviously, that you can end up stuck in the mud as neither
one thing nor the other.
This is particularly pertinent where the currently booming unified communications (UC) market is concerned. There is massive and increasing demand, but how do you tap into it without busting your expenditure and upping your operational risk with extra headcount?
Richard Eglon, marketing manager with third-party service provider Comms-care, says that the most obvious and profitable answer is simply to partner up with providers that do have the requisite headcount and skill sets.
“There are major opportunities out there for the properly geared reseller,” he said. “And joining forces with a third-party provider offers a fast, watertight, high-quality, profitable way to get in on the convergence act without putting your business at risk in any way.
“Converged UC is a huge market right now bigger than most people even
realise. Networking these days is converged networking. It is suddenly a
mass-market proposition. While VoIP used to be a fairly niche application, for
example, now it is right in the middle of the mainstream. As such, it is not so
much a question of if a company will move to converged, unified networking, as
when.”
Now really is the time to capitalise, he says.
Also, not only is UC much more of a “pull” market now, says Eglon, the whole idea of unification is evolving to encompass a much broader set of technologies; offering yet further opportunity for the savvy player in areas such as video, mobility, CRM, ERP and line of business applications.
“However, with such expansion, comes a problem. You cannot possibly retain
all the necessary skills in-house to allow you to fully exploit these widening
gaps in the market,” he said.
“Find the right partner with the requisite skilled, qualified resource and you
as the reseller get a broader portfolio, rapid access to market, security and
peace of mind for both you and your client, and genuine flexibility of service
and offering.”
Scott Dobson is managing director of Vcomm, a trade-only VAD that provides IP telephony products and services to the channel. He agrees that while many resellers have excellent skills in one area, they often lack the all-round expertise to unlock the bigger deals.
“The UC space is evolving very quickly with all of the major voice and data
hardware vendors making a play,” he says. “However, the one to watch is
Microsoft which owns almost all of the desktops from an OS, messaging and
calendar perspective. That is circa 7,000 resellers in the UK alone that have a
client base for Microsoft’s UC offering Office Communications Server [OCS].
“However, while these channels most certainly have the Microsoft skills to
capitalise on the opportunity, and while many also understand the network
implications and have server skills too, where almost all of them need help is
in VoIP integration to existing telephony environments, such as the PBX and the
PSTN,” says Dobson.
Comms-care managing director Scott Yates cites this need as a major
influencing factor. “It is all much more application-driven now. It is much more
than a case of simply ripping out and replacing old PBXs. Customers want and
expect more than just another telephony system.”
This is driving a massive demand for highly skilled engineers, says Yates, which
is in turn causing huge resourcing problems for many resellers that often end up
paying a premium for engineers qualified at CCIE standard or similar.
However, he notes, the ROI for all concerned tends to far exceed that of
traditional networking products. And current demand is such that while it may
cost more to offer unification services, these costs can often be passed on to
the end user, which is itself happy to pay for the added functionality and
value. Often to the tune of 40 margin points for the reseller, according to
Yates.
Dave Millett, operations director at Inclarity sees things in a similar light.
“A reseller may not have the core skills to support every device, so before
launching a new device or service, VARs need to incur costs to gain these skills
before any revenue comes in, which can prevent them from acting altogether,” he
says. “And this has driven the demand for third-party service providers to bolt
these skills on rather than gaining them in house.”
Attractive employees
A further major driver, says Millett, is that in hiring people with new skill
sets, or in developing new skill sets in incumbent employees, a VAR will by
definition make his people more attractive to his rivals and to the rest of the
market, and will therefore have to pay more to retain such people.
Resellers also need to alter the focus of their skills and tool sets, says
Jurgen Hekkink, solutions marketing manager at integrator Affiniti.
“Systems integration is becoming an increasingly important element in the
provisioning of UC; the ability to glue different software modules together to
function as a single entity,” he says. “Also the ability to do software
modifying and customisation, as well as the capability to merge applications
together based on open standards and middleware platforms is gaining in
importance.”
Although he says it is important in this instance for all-round communications
integrators to have the core UC skill sets in-house, it is impossible to
specialise in all of them; to maintain true expertise in every application on
every system.
“[Resellers therefore do] need specialist partners. Whether this is the integration into physical security systems, advanced video equipment, content management and delivery, or homegrown LoB applications, integrators need a solid structure to work efficiently with third parties. Core to the SI skill set is the ability to manage the end-to-end project efficiently through every project phase and to be a credible, responsible partner to the end-user,” Hekkink adds.
Kelly MacMillan, market specialist at Mitel, concurs. “While for many, IP telephony adoption has yet to reach the second stage of maturity, whereby customers are looking beyond dial tone, it is vital to convey a vision of what this technology offers. Never before has it been more important for resellers to be able to clearly understand end user issues and requirements in order to develop a genuine solution that meets their needs.
Partner ecosystems
“Partnerships are key here, and VARs should be exploring the development of
their own partner ecosystem to take advantage of the multitude of end-user
applications and custom development opportunities that exist. For the
sophisticated reseller, building partnerships between IT specialists and
communications VARs will expand their opportunity into new accounts and generate
new revenue streams into their existing bases.”
For many, she explains, the advantage of partnering is that it enables both parties to engage with the customer without having to become experts on technologies with which they are unfamiliar, and that may allow them to work together to share their respective customer base to cross-sell and up-sell corresponding offerings.
“It is significant to note that some resellers have rightly predicted the direction technology is taking and have already moved into the IT space and are developing custom applications into targeted markets,” says MacMillan. “Such craftsmanship has proven a very profitable endeavour for these VARs, while others are simply outsourcing this development to IT specialists.
“Smart resellers will continue to build expertise across multiple layers of technology but, importantly, they will focus on resolving critical business issues with a view to technology as an enabler of business, not as a magic panacea to solve all ills.
“It is vital for the reseller to decide what its core capabilities are and to ensure that it has the correct level of resources, skills and experience to support its portfolio,” says Hekkink, and this is where third-party services providers can help allowing resellers to adopt smart introduction processes to look at new emerging technologies and to adopt these into their portfolios in a structured, controlled way.
“So instead of gearing the whole services organisation up, it might make sense to partner with smaller specialist partners, and build a core of expertise in-house that focuses on the expertise and skills required to move forward into new markets.”
InClarity’s Millett cautions resellers to be careful not to dilute their client presence or to undermine their core offerings too much however, as by using third party service providers VARs “may risk weakening their own message”.
“The VAR is positioning itself as manager of the UC, but without the skills
in house to support every device/service. How does a customer validate those
capabilities? If it is an area where you do not have the skill set, the customer
may rightly question your claim to be an expert.”
Here, he says, vendors need to do their bit and provide simple, supportable
solutions that will not hamper resellers from adding their solutions to the mix.
“Interoperability is one example without offering it the vendor is simply being lazy when it comes to supporting its VARs. Often vendors will try to develop on too many fronts and de-prioritise the support required for its reseller partners.
“FMC and UC have been over-hyped for many years, but for the end customer, what does it achieve? Many will benefit from doing the bulk of it, rather than going for the whole hog from day one. Rather than going for ‘UC nirvana’, most companies would benefit from some basic steps towards UC, taken one at a time.”
As such, according to Hekkink, resellers should look for three qualities in
potential partners: innovation, advanced skills, and reliability.
“The partner’s skill set should be complementary, but without too much overlap.
It is also critical that both parties are open and honest with each other on
where and how they will work together, the partnership’s aim and future
expectations.”
Everyone’s a winner
Here, as long as the reseller and specialist partner both play to their core
strengths, then a win-win relationship can be developed, says Hekkink.
“Customers like to see clear project ownership and will expect the reseller to
manage partners successfully.”
In other words, resellers should avoid partnering with organisations that may
have hidden or secondary goals, or have interests that may conflict with those
of the end customer. So beware those with direct competitors or with an apparent
desire to build any kind of direct relationships with your customer.
“This can easily sour a partnering relationship and could cause problems in
delivering an excellent customer experience,” says Hekkink.
Andrew Lough, business manager for communications and collaboration at a&o
UK, offers similar advice. “When considering a third party to overcome skills
and resource issues, [resellers should] choose partners that are experienced in
working in complex IT environments that can provide deployment, business
application integration and support services at the desktop, rather than just at
the voice switch,” he says.
“Currently, many UC installations are close to stalling point, and this is caused by poor advice from technology focused voice suppliers. The business case for UC is less about technology, and more about enhanced communication and collaboration processes that improve productivity, efficiency and competitive edge. Resellers need to work with third parties used to addressing value through IT service delivery and integration of business solutions at the desktop.”
This is a sentiment borne out by the experience of Des Lekerman, managing director of Eurodata Systems, a five-times Microsoft Gold Certified Partner system integrator that serves the mid-market.
When Eurodata wanted to get involved in a customer’s implementation and management of a unified converged communications solution, it required voice expertise; something that the company did not have in house at the time.
“First invested in people with telecommunications backgrounds and trained existing staff to understand how new Microsoft technology worked with both legacy and existing voice systems,” Lekerman says. “We then trained our new voice experts on Microsoft applications. Basically, we combined our knowledge. We then decided to partner with Mitel, which understands how to integrate voice and data on Microsoft applications.
“We managed to build our processes together with Mitel and we now have a formula for an end-to-end UC solution to be deployed for our mid-market customers. Our methodology allows our mid-market customers to pick and choose the elements of the UC applications they want to integrate. It is not one-size-fits-all: we have to be completely flexible and understand the different customers’ businesses and needs.”
Partnering with Mitel on the UC deployment has, according to Lekerman, allowed Eurodata to provide more flexibility and agility to teleworkers and mobile workers within mid-market organisations, something once only offered to larger organisations.
However, he concedes, finding the right partner can be a challenge.
“When looking for third parties, it is vital to understand their customer base
as well as their technical expertise, and to take references,” he says. “The
perfect partner needs to have complementary skills and good synergies, as well
as flexibility and a proven track record. A good partner also needs to have a
confidential approach. We would counsel against working with any third party
that cannot prove a service-orientated attitude.”
