Given the economy, changes are coming anyway...
Virtually every IT dip has redefined the VAR industry. There's no reason to think that the credit-crunch we're in now will be any different.
To avoid being at the mercy of a single channel program, there's one very simple solution. Don't bet your business on a single channel program.
And while you're at it, focus on selling some ongoing services so that you're not starting from scratch every month.
Look before you leap...
Even in good times, it can be very problematic for small VARs to get into the "banking" business by extending credit to clients.
Make sure you get a completed credit application AND check the references.
Also be sure to get a substantial-sized deposit up-front.
And one commonly overlooked solution... you don't have to offer the same terms on high-profit services as you do on low-profit/no-profit product reselling.
Having a merchant account, so you can accept credit cards, does wonders to solve many of these problems.
The nearsighted call credit card fees a loss of 2-3%. The smart VARs call it a gain of 97-98%... 30-60 days sooner!
Online "self-storage" industry mirrors offline pack-rats
It's interesting to find that this is so non-discretionary.
It kind of mirrors the self-storage industry, where even people with decent-sized homes can't declutter enough to fit it all in.
That's why where there are so many physical self-storage centers.
In a weak economy, I'd expect some households at the margin to work harder to declutter to eliminate several-hundred dollars/year in self-storage rental expenses.
I wonder if the same thing will happen as department managers feel the heat from internal IT departmental charges for crazy amounts of storage.
help clients re-prioritize... now
Now is a good time for VARs (SP's, consultants, integrators, etc.) that act as outsourced IT support to review their project plans with clients. It's time to prioritize any tasks/projects that will bring rapid ROI.
For example, it may be tough to close the sale on a $25,000 project in this environment with small businesses. BUT if that $25,000 project will generate $300,000 in annual overhead savings for that same small business, they'd be really silly not to run with it now.
As always, focus on solving THEIR problems and your opportunities won't be far behind. That's why VMWare is doing well. Follow their lead.
size matters
One issue that's rarely addressed in IT channel publications... the minimum size requirements (employees, revenue, etc.) for cost-effectively selling directly to Uncle Sam. It's certainly not for everyone.
Caught my attention also...
Yes, this mid-cycle patch caught my attention too.
Kind of like when the Fed adjusts interest rates in between FOMC meetings.
social networking vs. traditional relationship marketing
Historically, this kind of networking came about from organizations and events.
Within the last 2-3 years, there's been a real explosion of interest in seeing social networking at least supplement some of the traditional relationship marketing (joining chamber of commerce orgs, user groups, civic organizations, lead sharing groups, etc.).
We fully expect that most offline organizations will eventually be forced to reinvent themselves, to remain "relevant", by incorporating social networking features in their member Web site areas.
a new trend?
These one-sided channel program contracts have existed literally for DECADES! (I probably still have examples of them from different ISVs and IHVs going back to the late 1980's and early 1990's.)
It's part of the downside when smaller partners try to engage with an 800-pound industry-dominator.
True partnerships only come from partnering with peers and similarly-sized companies.
learning from this mistake with managed services
Dan,
You and Vela bring up some excellent points.
My bigger question... How do those pursuing managed services as their entire business model avoid the same commodity-broker fate?
VA = good alternative to hiring an employee
April's right.
For smaller IT consultancies, a virtual ass't is a really good way to delegate some clerical work without the overhead burdens of a part-time employee.