n case study VARS: EASING THE TRANSITION INTO A NEW WORLD OF OPPORTUNITY

WHEN IT COMES TO TECHNOLOGY, CHANGE IS THE ONE CONSTANT. However, change doesn’t simply apply to products; in some instances the entire environment evolves. That’s definitely the case for value-added resellers (VARs) operating within the IT space. While the changing culture requires a shift in how VARs approach the market, the ongoing transition represents a significant opportunity to strategically reposition in-house expertise to retain customers and capture additional market share.

CHANGING LANDSCAPE

Customer buying practices are probably the most significant shift for VARs of late. Whether a business is procuring storage, applications or an array of other technology needs, physical OEM hardware-based purchases are giving way to a purely service-oriented model. For instance, platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) cloud computing models are consistently gaining steam, and providing organizations with access to processing power previously out of reach. Likewise, software-as-a-service (SaaS) models empower organizations with access to state-of-the-art applications on a pay-as-you-go model. For the enterprise, this transition levels the playing field since operating expenses are easier to manage than costly and sometimes crippling capital expenditures.

At the same time, buying power is increasingly shifting toward line-of-business executives. While CIOs have traditionally held responsibility for most technology decisions, today it may be a marketing director, sales executive or service manager making the call. For instance, marketing may decide to contract a developer to build a market-specific application on a time frame that’s not feasible for the IT department. Additionally, CFOs and CSOs are now key technology decision makers.

“The changes in procurement and the buying influencers [have] resulted in a tremendous threat of disintermediation where VARs could potentially lose relevance to some of the decisions,” says Dale Tucker, Director of Business Develoment with CenturyLink. “Success is a matter of recognizing the big picture, and making changes needed to capture opportunities.”

ADDRESSING CONCERNS

Understandably, for VARs to continue enjoying success within the IT space, it’s crucial to grow and positively progress with the market. For most this means understanding and effectively dealing with the challenges associated with developing an ever-evolving knowledge base capable of delivering core competencies that meet changing customer needs. Specifically, VARs need to represent a different solution set that creates a new experience for the customer.

One of the biggest concerns is the sometimes dramatic move away from what was once a linear distribution path from the OEM to IT distributor to the VAR to the end user. Today, it’s quite common for the supplier to have a direct contractual relationship with the end users as well as unprecedented levels of visibility. “The shift in no way lessens the importance of the VAR. They remain as critical in the lifecycle as they ever have been, just in a different way. Providers look to these partners to be the ongoing sales and retention drivers,” says Tucker. “Mutual cooperation with an emphasis on support plays a key role. Just because there is visibility from supplier to customer does not mean the supplier is seeking to marginalize the VARs. It’s cooperative partnerships that give VARs the opportunity to develop the consulting skills that end users value.”

In addition, VARs need to rethink the business model from one of

VARs: Easing the Transition into a New World of Opportunity Supplier partnerships add value as VARs tackle the evolving IT space and the new business opportunities on the horizon.

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large software and hardware sales to a repeatable and relationship-oriented environment ripe with ongoing customer engagement and development. The move to a recurring revenue model can represent consistency and growth over time.

As VARs approach the transition, apprehension is expected, explains Tucker. It’s challenging to support ongoing relationships while also learning the nuances of new technology, but a well-chosen partner can lessen the load. “In the past, VARs may have been certified with a particular hardware or software provider, and they were very versed in that particular product,” he says. “Now they are going into an environment where they are seeing infrastructure, applications, networks and colocation constantly comingle. Trying to build this knowledge base and skill set can translate to massive resource investments.”

REAPING REWARDS

With the right partners, VARs can capture this broader market-share opportunity with confidence, while protecting the customer and revenue stream necessary to position the organization for future success.

Of course, achieving success starts with establishing the right supplier relationship. For instance, being able to leverage today’s opportunities requires supportive partnerships designed to assist VARs through all stages of the sale—from presales engineering and configuration to post-sales support. Proper support empowers VARs to connect customer challenges with the most suitable solutions from a broad portfolio of products and services, and where appropriate, engage subject matter experts and presales engineers to bring greater depth and expertise as needed. A support-centered relationship is only successful if it includes seamless collaboration.

“Obviously in-house abilities often develop over time, so it’s important to look for suppliers willing to scale the offering as VARs are able to take on more of the post-opportunity identification phases,” Tucker says. “The more VARs can do, the higher their value to the customer and the stronger their relationship gets.”

The provider’s portfolio should take center stage as VARs seek out partnerships. This is where CenturyLink, in particular, shines. The

company’s robust portfolio is a direct result of strategic acquisitions over the past decade. In fact, CenturyLink is the second largest retail data center colocation provider and third largest telecommunications provider (including local exchange provider) in the U.S. And, more importantly going forward, CenturyLink is also a leader in cloud technology through its acquisition of Tier 3, providing application development, monitoring and managed services.

Finally, finding partners with extensive experience operating within the channel environment is crucial to achieve success. Through years of experience suppliers like CenturyLink build consistency, stability and knowledge. “When given access to an experienced provider’s complete portfolio of connected offerings, and a demonstrated philosophical market commitment, VARs have all the vital pieces and parts needed to support their customers,” says Tucker.

Bottom Line: For VARs, the changing environment has significant implications. Reselling equipment alone no longer translates into a viable, stable operation. Companies are looking for service-based offerings and consulting plays a key role. Fortunately, a world of new opportunities exists for forward-looking VARs willing to strategically partner with providers.

“There is great value in finding a provider capable of combining a robust portfolio with a support model built around making VARs effective. This is especially true in an onboarding environment where VARs might not be able to afford the needed investments in support and training resources on their own,” he says.

Click www.centurylink.com/alliance to learn more about how a supplier partnership can help your organization effectively overcome growing environmental obstacles, and thrive in today’s evolving marketplace.

n case study 2VARS: EASING THE TRANSITION INTO A NEW WORLD OF OPPORTUNITY

“Success is a matter of recognizing the big picture, and making changes needed to capture opportunities.”

Dale Tucker, Director of Business Development, CenturyLink

© 2014 CenturyLink. All Rights Reserved. The CenturyLink mark, pathways logo and certain CenturyLink product names are the property of CenturyLink. All other marks are the property of their respective owners.

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