Wireless VARs: Step Up Your Game

By Steve Hilton

THROUGH NO TRYING of their own, AT&T/Cingular, Verizon Wireless, Sprint Nextel Corp. and T-Mobile USA Inc.s direct sales channels have dominated the delivery of solutions to SMBs. These traditional mobility/cellular service providers have invested heavily in their telemarketing and retail store environments, expecting to drive their future business sales and support through these channels. They expect SMBs to approach the sales process much like consumers and are forcing SMBs to make sub-optimal mobile technology decisions.

However, this mobile channel paradigm is going to change swiftly, and mobility-focused VARs have a stunning opportunity for success in the advancing world of ubiquitously connected SMBs. For virtually every technology solution except cellular, the vast majority of small and medium businesses rely on their VARs and other indirect partners to provide technology advice, implementation and support. The cellular service providers have underinvested in their indirect channel programs and now other technology vendors are lining up to eat their lunch.

It comes as a surprise in the cellular community that wireless accounts for only 10 percent of an SMBs total annual technology spend. IT and communications hardware leads the way with 25 percent of an SMBs annual technology spend. That being said, wireless is one of the fastest growing technology segments.

Few argue the value of wireless solutions to drive worker productivity. Mobileenablement of an SMBs applications and IT environment will drive SMBs to heightened levels of productivity and increase their competitive edge in the market as employees become increasingly adroit working in nontraditional venues like airports, airplanes, trains and coffee shops.

Wireless solutions also allow SMB employees to lead more blended lifestyles by allowing employees to balance work and personal lives more seamlessly. SMBs have great need for technology solutions including wireless to help them integrate their work and personal lives.

Wireless-focused VARs are in a unique position to capitalize on the growth in the mobility segment. Over the next three years, 55 percent to 69 percent of SMBs will have corporate-liable wireless plans rather than individually expensed-back plans. This movement to corporate-liable plans will bring SMB wireless spending under the control of businesss IT organization. VARs will be making most of these sales of new wireless products and services, as small SMB IT organizations take advantage of the resources of technically knowledgeable VARs.

In addition, fewer SMBs want their mobility/cellular service provider to supply their end-to-end mobile data communications solutions the types of solutions that will strongly drive future productivity increases with SMBs. While SMBs faith in cellular service providers is waning from 45 percent in 2004 to 18 percent in 2006, SMBs are increasingly interested in buying these nextgeneration services from SMB-channelfriendly vendors and directly from VARs, agents and SIs. In fact, in 2006, a total of 45 percent of SMBs were interested in using these channel-friendly vendors, VARs, agents and SIs for an end-to-end mobile data communications solution.

Knowing SMBs continue to bring mobility/cellular spending under the control of their IT organizations and that SMBs increasingly disfavor their cellular service provider as the provider of cutting-edge services, what should the savvy wireless VAR do to position itself for success?

Recommendation 1:

Partner with new nonmobility VARs and device vendors. VAR partners that implement SMB IT and business applications have strong ties to SMB IT departments and decision makers today. As mobility solutions fall under the future SMB corporate domain, youll need stronger connections. In addition, device manufacturers like Nokia have started their own partner programs. These programs provide VARs another entrée to SMB decision makers. The current cellular service providers channel programs are going to have to step up their game to match competition from outside the traditional cellular industry.

Recommendation 2:

Rely on SMBsavvy vendors and service providers to help refine your approach to SMB marketing, sales and support. Wireless service providers as a group dont have the best SMB channel partner programs; some are among the worst in the technology sector. Companies like Cisco Systems Inc., IBM and Microsoft Corp. on the other hand, have built strong SMB-friendly channel programs. Each of these companies has created the processes, tools, training and ongoing support vehicles to foster those strong programs. In addition, each vendor has strong wireless and mobility interests catering to the SMB market with infrastructure and applications.

Recommendation 3:

Wireless VARs must understand the SMBs business challenges that impact nonmobile technology sets. The ubiquitously connected SMB of the future will require mobility solutions to be seamlessly integrated into its technology environment. All technology solutions infrastructure, applications, communications and mobility will coalesce around simple, converged platforms, allowing SMBs common user interfaces, easy-to-configure applications and transparency of data. As a trusted adviser providing ongoing support to an SMB, you must follow a straightforward, process-oriented approach to diagnosing an SMBs business challenges and presenting business-focused solution alternatives without wireless techno-babble.

Those wireless VARs that make the transition to an Anywhere SMB world a world where SMB employees, suppliers and customers are ubiquitously connected will find a new world of opportunity for themselves.

Steve Hilton is vice president of enterprise and SMB research for Yankee Group. He can be reached at [email protected].