VARs have traditionally made money selling and servicing on-premises systems, but now cloud computing is poised to rain on their parade. Over the next five to ten years, opportunities to resell software and hardware will dwindle as more companies adopt cloud-based systems. Processes for software procurement, implementation, and training will change, and VARs will need to change their current service offerings to be successful in this new market. Luckily, VARs have many opportunities to re-focus their business strategies.
The VAR Survival Playbook
The strategic VAR will establish partnerships with cloud vendors before competitors can. The ideal cloud partner for the VAR will have three key attributes:
- a bright outlook such that their product will be in demand;
- plans to develop a VAR channel in addition to selling directly; and
- partner support in the form of software development kits (SDKs), co-marketing and training.
But the territorial victory of partnership is only the beginning of the cloud transition. Next, VARs should make five bold moves to gain a sturdy foothold in the market.
1. Specialize. Narrow your focus to a vertical market or application category, rather than defining your company by its geographic territory. Be the first to develop vertical extensions for a major cloud-based system, and learn to speak the buyer’s language. Alternatively, gain expertise with one type of application.
2. Develop competency on a leading Platform-as-a-Service (PaaS). Learn and specialize in the developer tools for a cloud-based platform like SuiteFlex (NetSuite) or Force.com (Salesforce.com). You can build your own applications and customizations, and then market them.
3. Make the cloud’s efficiency work for you. With cloud-based systems, there’s far less need to send staff to the site. Use the extra time to start an internal, centralized sales team serving a broader territory. You can become as good at inside sales – or better than – the ISV. ISVs need sales machines.
4. Offer technology-enabled services. Because cloud-based systems are accessible anywhere, it’s easier to become a seamless extension of the customer’s organization. Develop internal competencies so customers can outsource these operations to you.
5. Promote the cloud to your existing customer base. If you can’t beat ‘em, join ‘em. We’re entering a major platform transition – there will soon be an incredible shift to cloud-based systems. Get in on the action now and embrace it. Your biggest asset is your existing customer base, so help them transition.
Accounting Market Analyst
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