Empowered Networks

In the IT industry, “Channel Partner,” provide a range of services – from product and service resale and packaging, to delivering related value-added services and support to end customers.  Although Channel Partners have been around for a long time, there are still several misconceptions about what they are, what benefits they provide, and how to find a good one.

The very name Channel “Partner” suggests a valued relationship with a customer. They may also be called Systems Integrators (SIs) or Value-Added Resellers (VARs) but the distinction between these two types is often unclear.

Value-Added-Resellers, or VARs, are often small local companies, but occasionally grow into larger regional or national players.  Ideally they have a strong customer base in their chosen fields, and they work with a handful of carefully selected vendors.  A good VAR will have Engineering and Technical support depth, and will truly add a lot of value to the Customer/Vendor/VAR triumvirate by sourcing product, customizing it to the client’s needs and supporting it after sale.

The most common criticism about VARs is perceived lack of Value.  End customers complain that while VARs are more consultative than the Vendor’s they represent, they still live to push their products. Smaller VARs are often criticized for lacking the resources to provide expertise beyond what the Vendor might provide.

A Systems Integrator is usually a much larger company than your typical VAR, with a broader focus on their Customers’ business. They may have a variety of “practice areas” where they have technical depth, and they usually have good political connections back into the Vendors, particularly at the executive levels.  They often deal with more complex environments than VARs do and will go beyond a handful of vendors to provide a complete and fully integrated solution.

The most common criticism of SIs is that they’re too high level, and although they might have brilliant MBA’s on staff that can dazzle customers with their insights into high-level business issues, they are sometimes viewed as lacking the “rubber meets the road” capabilities and the operational experience required to implement and support some of the products they recommend.  They, rightly or wrongly, are also viewed as being expensive and out of reach for any but the largest companies.

We suggest there is a new category of Channel Partner emerging, one that has combines the strengths of both VARs and SIs – a “Niche Systems Integrator”.  A Niche Systems Integrator will tend to be larger than most VARs in terms of number of people, investments in infrastructure, and ability to support larger projects.  They are smaller than many of the “Big SIs”, but still have some of the business orientation that SIs typically bring to the table. This helps them deliver complex technical solution, but allows them to do so in the context of how it addresses the Customer’s business challenges.

You and the Channel Partner – How it’s supposed to work

If you think a Niche Systems Integrator might be the right channel partner for you, here are some of the key benefits of a successful customer/NSI partnership.

• A long-term business relationship with a partner that understands your business.
  • Look for a partner who wants to have a much deeper relationship with a small number of customers, often within a particular geography or market vertical, or both.  The NSI will insist on understanding your business in depth, they’ll want to know your people, your processes, and your environment so they can hit the ground running on every new project.
• Vendor Consolidation
  • A Niche Systems Integrator can save you the time and energy required to manage multiple vendor relationships.  This is becoming more and more important as the legal and regulatory environment become more complex.
• Relationships, relationships, relationships
  • After completing a few successful projects together, a NSI team and the Customer’s team will develop great linkages.  Technical folks will know each other on both sides, as will the Project Managers and senior executives. If it seems at times that the line between employee and partners is blurring, that’s a good sign.
• More objective “Solution Approach”
  • A NSI measures their success on whether they solved a customer’s problem or helped them meet a business goal.  They won’t be pushing products, they’ll be seeking solutions – and sometimes that means not selling any product at all.  Look for a company that listens and sometimes says that you don’t need that product at all or that you need to address some process issues before that product will deliver the results you need. If they say yes to everything you ask, think again about whether they are really a niche systems integrator.
• Access to vendor resources
  • A NSI should have better access to top-notch resources at the Vendor than the Customer could ever develop and maintain herself.  This includes contacts with the Vendor’s Development, Support, Engineering, and Senior Management personnel. The NSI can bring the right resources to bear if and when required.

What to look for in a Niche Systems Integrator

• Stick-to-it-iveness
  • Past behavior is the best predictor of future behavior.  Look for a partner with a long track record of developing and maintaining happy customers in your space.
• Value-Add components
  • A NSI will have numerous areas of value-add.  The three main categories to look for are engineering skills and experience, technical support capabilities and process skills.
• Quality and consistency of the people
  • It’s great if the NSI has run a successful business for a long time, it’s even better if they do it with many of the same key people in their team.  Beware of partners who constantly seem to change out their team members – it can be a sign of trouble.
• Relationships back into the Vendors
  • Look for a partner whose relationship with vendors is strategic, not one based solely on price.  Your channel partner should have strong relationships at multiple levels within the vendor community, from marketing to engineering to senior execs.  They’ll need these relationships to optimize the solutions they deliver to you.
• People who understand your business, your operational environment, ideally someone who has done your job.
  • Vendors usually have people who know their products well.  What you want from your Channel Partner is a team that in addition to knowing the products, also has the operational experience and successful experience in creating business solutions using the technology – that’s the magic, as it requires a broader understanding of process, implementation best-practices, and support methodologies.
• Depth of resources
  • Many Channel Partners start out small and grow.  Having focus is great, but look for NSI’s with a little more bench depth in the value-add areas, especially when it comes to engineering talent.

Conclusion

When it comes to deciding on a channel partner, the traditional choices are VARs and SIs.  There are pros and cons to both types of partners in terms of what additional value they can provide. Sometimes what you really want is something between these two. “Niche Systems Integrators” can drive huge value for customers as they jostle with a myriad of business challenges and an ever changing array of products and services.

Ask the hard questions to find the best Channel Partner for you, and the time you spend building the positive relationship will have huge returns on your productivity as you consolidate vendors, get more from your IT investments, and greatly reduce your support challenges.

Brian Hepburn

Brian is the Co-founder and CEO of Empowered Networks.  Empowered is an established Niche System Integrator in the Canadian market.  The company specializes in the Test and Management of IT, and has been in business for 12 years, with roots in the business going back 25 years for the founders and many of the employees.   Empowered has 70 employees, with offices across Canada, a bilingual 7×24 Technical Support Center, and an established EmpoweredLab facility.        www.empowerednetworks.com