Evolution of the Channel -- Resellers rework their businesses for the 21st century
Dec. 17, 1999 (Computer Reseller News - CMP via COMTEX) -- Boston-Time and again, traditional VAR models were put to the test this year, and time and again regional VARs rolled with the punches, adapting to each new challenge.
Year 2000 compliance and the delay of Windows 2000 created the most chaos, said many channel executives. But with Y2K making an exit and the release of Windows 2000 around the corner, many channel executives predict 2000 will be a turnaround year.
"This will be a great year for the channel for the same reasons it was a challenging year in 1999-Y2K and Windows 2000. We've passed Y2K and the other is coming," said Howard Diamond, chief executive of Corporate Software & Technology Inc. (CS&T), Norwood, Mass. "Windows 95 ended up being a tide that raised a lot of boats."
The introduction of new services, partners and business models buoyed such VARs as CS&T, Sarcom Inc. and Comark Inc. throughout 1999.
Sarcom made changes to its business model-outsourcing procurement, logistics, systems configuration and assembly services to Ingram Micro Inc. due to shrinking product margins, changing distribution models of manufacturers and the loss of price protection, said Randy Wilcox, president of Sarcom, Columbus, Ohio.
Last month, Sarcom reorganized into three business units: Enterprise Technology Solutions, Network & eBusiness Solutions and Enterprise Education. "We needed to become a pure player in each segment and focus our management team in each business, while at the same time offering one point of contact to the customer," said Wilcox.
The company's desktop and server outsourcing business, now under Enterprise Technology Solutions, grew 140 percent over 1998, said Wilcox. The company's eBusiness Solutions are fairly new, but will focus on developing clients' E-business strategies, he said.
Comark spun off a distribution arm called PC Wholesale to serve small-and midsize-business VARs, while Comark remains focused on serving corporate, state and local government customers.
The distribution arm, which has kept a low profile for the past year, received a boost from an unlikely partner, Gateway Inc. Last month, Gateway cut close to 2,000 VARs from its partner program, sending them to PC Wholesale for products and support, company executives said.
Comark and Sarcom also stepped up their relationships with Cisco Systems Inc. and Microsoft Corp., both achieving Cisco Silver Certification Partner and Microsoft Large Account Reseller certifications. "Whether it's Lucent [Technologies], Cisco or Sun [Microsystems Inc.], networking is the future," said Phil Corcoran, co-chief executive at Comark, Bloomingdale, Ill.
CS&T formed several new technology and services partnerships in 1999, a sign of things to come, Diamond said. "We are spending a lot of time investing in bringing new products into the marketplace," he said. "There are many companies with great technology that are having a hard time figuring out how to get access to businesses."
Through partnerships, CS&T began delivering migration services for Windows 2000 and outsourcing services to large accounts. The company developed a few solutions on its own, including an online software license calculator that acts as a consultant to small and mid- size businesses.
Rather than moving away from the product side of the business, many resellers, as demonstrated by CS&T, continue to embrace their product businesses while building on services.
Comark's distribution center grew by 148,000 square feet this month in order to handle large-scale rollouts of servers, workstations and connectivity equipment.
"People talk about the channel as if it's dead," said Diamond. "I think there's never been more opportunity for the channel in terms of selling technology into businesses."
By: Christina Torode
Copyright 1999 CMP Media Inc. |
