Where’s the Loyalty??

Recently the founder and CEO of Trace3, an Irvine, Calif.-based solutions integrator, told Forbes magazine “the traditional VAR is dead.” It’s not a shock that cloud and converged infrastructures are taking wind out of the sails of equipment resellers, but the strong ones, like Trace3, move with the market.

Our research on the changing role of the channel is showing less and less “brand loyalty” from channel companies – meaning fewer resellers are representing a narrow list of specific vendors that they recommend to their own customers. Rather, they’re working individually with customers and seeking out solutions that may or may not be part of their usual lineup of vendors.

In Trace3’s case, the story explains, the company is focusing on new technologies, particularly big data, mobile and cloud, and how their customers will benefit. In the case of many systems integrators, it was to build up their business in offering hosted, managed, and subscription-based IT services. (Still, in all likelihood, the same narrow crop of vendors provide the services that are then parcelled out, managed, and re-billed by the xSP.)

“Best of breed” used to be a major catchphrase for integrators, and the meaning was that they had determined that the hardware and software on their line cards were the best available products. Today, resellers aren’t selling as many designer-breed dogs – they’re more likely to match each customer with the right mutt, depending on their household’s unique needs.

Vendors who felt their channel partnerships were on lock may suffer from this fading loyalty, but we see it as the solution providers showing that their primary loyalty is to their own client, the end user. We see this as a positive change, where building a solution out of a collection of hardware and software isn’t based on picking products that generate the highest profit margins for the reseller. Instead, it’s about the lifetime or long-term value of the relationship. It’s about the customer trusting what the reseller says is the best available option, based on the customer’s current and future requirements.

Software-defined storage is a product category that we think helps enforce this trust and creates happy relationships between customers and solution providers. It’s a sophisticated, updated approach to solving a great deal of common problems – and it doesn’t force the reseller to say “remember all that junk I sold you over the years? You’re going to have to get rid of all of it and start over.”

Instead, with SDS, all that junk can be repurposed and consolidated, to extend its utility, its lifespan, and rate of return. SDS also makes it easy to integrate new storage resources for capacity or performance or data protection, as the need arises and budget permits, rather than all up front.

In the realm of “value-adds,” that’s a big one, when the reseller can spare their client all the sticker shock, downtime, and risk incurred by starting from scratch. The margin may not be as high as selling bigger boxes, but in the long run, it builds a better relationship, and that generates a bigger payday.

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