Focused Expertise Wins The Race
As children we were all taught that the moral of Aesop's legendary fable of "TheTortoise and the Hare" was that "sure and steady wins the race." But if thehigh-tech industry interpretation were used, the moral might be "staying focused winsthe race." On today's competitive reseller racetrack, it's focus that separates thewinners from the also-rans.
Gross margins continue to decline on the product side. Resellers must double or eventriple their sales revenue to stay even.
For resellers that are partnered with HP, much of this necessary revenue increase hasbeen derived directly from HP's strategy to steer more of its direct business to theindirect channel. And that has increased its indirect channel sales from roughly 40% to70% during the past five years. This "channel shift" is now heading for aplateau and won't be as dramatic in the future. To succeed, resellers must develop afocused market expertise.
A NICHE IN TIME
Resellers must attract customers beyond the hardware vendors' pipeline. Solutions canprovide that broader focus. For example, Bloomfield Computer Systems has always focusedmuch of its expertise on HP technology, but we realize that technology alone isn't enough.Consideration should be paid to niche markets in which resellers have expertise. Thesemight include the manufacturing, healthcare, or telecommunication markets where a resellerhas extra insight and can better develop a customer solution.
Some resellers have expertise in the implementation of technology as it relates toEnterprise Resource Planning (ERP), high-availability deployment or network systemsintegration. Leveraging expertise into markets with significant growth potential is asound strategy to build future growth. For example, the explosion of ERP applications iscausing companies to realize that they need to solidify their technology infrastructure totake advantage of these powerful applications. That creates a significant opportunity fortechnology providers -- with the appropriate expertise.
The same can be said for high-availability deployment. Industries such astelecommunications and financial trading demand highly-available environments with zerodowntime. IT infrastructure and expertise in systems and networking management play acritical role in creating and maintaining these complex environments -- yet anotheropportunity for resellers.
Growing markets for outsourcing and co-sourcing services provide yet more opportunity.These reseller services allow companies to focus on their business rather than operations.Outsourcing services include providing hardware and software applications along withrelated support for clients. Co-sourcing services include providing management andmaintenance of customer-owned hardware and software, either at the customer site or at anoff-site data center. With the right technology and market expertise, resellers can offera win-win situation for companies looking to outsource all or some of their IT operations.
MIRROR, MIRROR
Focused expertise, however, without a focus on the customer too, will not likelygenerate the sales of which success is made. Quality relationships are essential.Customers seek out resellers who take the time to help with up-front planning. Byunderstanding the customer's requirements, resellers can build a partnership much deeperthan one that is transaction-oriented. Resellers can also strengthen their relationshipwith customers by integrating multiple solutions from multiple vendors on behalf of thecustomer.
The reseller market mirrors the IT market: Consolidation and the need to do more withless are changing the way companies compete. Companies that identify and maximize keydifferentiators will create the opportunities needed to succeed. There can be no restingon one's laurels. Resellers must create new opportunities and refine their focus.
-- Paul Hodges is President and CEO of Bloomfield Computing Solutions(Bloomfield Hills, Mich.), a Best-in-Class HP reseller.