The Changing Value of the VAD

By Khali Henderson

The role of the distributor has morphed over time beyond its logistical roots. Instead of just an order fulfillment warehouse, todays value-added distributor has become a strategic partner to the solutions providers it serves by not only supporting traditional hardware and software businesses but also their migration to newer managed and cloud services business models.

We still need to be able to execute on the core distribution fundamentals our partners depend on us for every day, but now we need to incorporate new offerings to help our partners adapt their businesses to accommodate the new market opportunities that exist today,” said Brian Cuppett, vice president of sales for distributor ScanSource Communications.

Rick Boone, president of NETXUSA Inc., a distributor of VoIP products, agreed. The role of the VAD is currently going through a change. I personally shy away from the term VAD today because every distributor that can put a label on a box correctly calls this a value and deems themselves a VAD. The role of the VAD is far more.”

So what is the role of the VAD? Channel Partners spoke to several leading VADs and found that they are supporting their VARs not only with more comprehensive post-sales functions incorporating auto configuration, installation and tech support, but also increasingly in pre-sales functions like training, sales and marketing, and even business planning.

Pre-sales Support. To help our partners sustain long-term business growth, we believe a VAD must be able to help its partners on the business planning side and execution of those plans as well,” said Cuppett. ScanSource Communications, for example, has instituted Business Development and Partner Services teams through which it helps VARs build marketing programs to achieve business goals. ScanSource also can aid in the execution of those plans or outsource the program all together.

Robert Messer, president of IP telephony distributor ABP International Inc. (dba ABP Tech), also said that VADs must help resellers with more marketing and lead generation than in the past. We are actively involved in growing our resellers market shares through lead generation, training and presales support,” he said.

ScanSource also has created a training series called Planning4Profit to help VARs improve their own business development skills. The program walks partners through each step of the sales process prospecting and qualifying, selling on value and closing the deal. Through programs like this we believe we can positively help our partners improve their business practices, which helps them toward long-term business growth,” Cuppett said.

Ingram Micro Inc. also takes a consultative approach to assisting VARs with business development through business intelligence services. Kirk Robinson, Ingram Micros vice president and general manager for the commercial markets division, explained that the VAD can review the VARs purchasing/sales history and identify where they are missing opportunities and also suggest adjacent markets for consideration.

With the increasing breadth and complexity of product, VADs also are developing specializations by technology. ABP Tech and NETXUSA, as examples, have focused exclusively on IP telephony. In another example, Westcon Group Inc. has created channel-enablement solutions around convergence technologies (i.e., IP telephony), security, mobility and collaboration. By segmenting them, the company states that it can more quickly identify business opportunities, increase its understanding of market trends and conditions, develop in-depth technical knowledge and provide enhanced sales training and tools for VARs.

Specializations now extend also to vertical market expertise. Again Westcon Group has practices helping VARs that target federal, public sector and health care markets. Ingram Micro also sees the value in vertical specialization. Our Divisional approach to the market also has gives us more specialization in high-demand verticals and technologies,” said Robinson. This is of huge value to our channel partners who are specializing their services and the markets they reach.”

Increasingly VADs also are helping to showcase the solutions their VARs are selling. Messer said that a quality showroom” is helpful to resellers in demonstrating products to customers.

Robinson said that Ingram offers two Solution Center and a new Experience Center. These three proof-of-concept and training centers are free resources to our channel partners and available to use with their end-users to help ease the sales process by offering a try before you buy engagement,” he said.

Similarly, Westcon Group is rolling out several LEAP (Learn, Experience, Architect and Plan) centers, which are dedicated “centers of excellence” for resellers targeting data center opportunities. By accessing the LEAP Center demo infrastructure, resellers are able to set up and host their own data center demonstrations without incurring the additional expense of procuring a dedicated data center network test environment.

Post-sales Support. Services are becoming much more comprehensive on the post-sales side as well. VADs are providing more services before and after product shipment, including custom configuration, integration, installation and professional services.

As one example, ScanSource Communications announced this fall the creation of Command Central, a Web portal enabling the companys partners selling VoIP to outsource configuration of IP phones. Command Central is an adjunct to the companys online ordering system that allows VARs selling VoIP services to place orders, track inventory, look up invoices and check order status. Significantly, partners will be able to create IP phone provisioning profiles specific to their end-user customers needs and add those profiles to hardware orders using a unique part number, making the phones immediately recognizable when plugged in.

Command Central offers basic or complete provisioning with the capability to provide labeling and E911 stickers, as well as include literature with shipments and pre-configure the solution for just-in-time shipping. Command Central also gives partners reporting, e.g., MAC addresses, to load into their systems, and 24/7 support.

Technical support also is critical. Being able to read a script and answer a few questions about a single product or features is not enough in todays world,” said NETXUSAs Boone. At the very least you have to be able to cover every product in the installation or deployment because you never know which component will be the issue.”

Instead Boone said NETXUSA works closely with its partners. We work between the VAR, the manufacturer and the application provider to make sure the VAR is able to effectively roll out their solutions and provide the services to their end customer,” he said.

Ingram Micros Robinson said one of the most popular support services it offers is Technical Solutions Engineers. Together our TSEs and the channel partners theyre supporting can much more easily identify and address the business challenges customer faces and devise a solution that will resolve the issue and bring added productivity and performance to the mix,” he said.

Transformation Enablement. What may be the most significant change for distributors is that they are moving away from merely supporting point products to supporting complete solutions, including supporting VARs migrations to new business models, including the addition of carrier services, managed and cloud services.

Messer said VADs can play a leadership role in helping VARs with these difficult transformations. We have reinvented ourselves over and over in the last decade and have always reached out to our reseller and dealer community to follow us in the quest to stay relevant in the rapidly changing world of IT and IP communications,” he said.

As one example, ABP Tech became a master agency to several service providers so that it could enable VARs to sell SIP trunking services along with its IP PBXs, enabling lower communications costs over traditional PRIs. Because of its volume, Messer said ABP Tech also was able to negotiate better commissions than VARs might get on their own. IP services was a big step forward to help resellers generate a higher profitability level than when they were only installing systems and taking no responsibility at all” for the connectivity, he said.

For its part, Ingram Micro has become a distributor of wireless services and devices for some of the major mobile operators.

NETXUSA also has embraced the services model, supporting cloud-based voice and video services. We are working on ways to systematically maintain and integrate things such as hosted [Microsoft] Exchange and other subscription-based services,” said Boone.

Moving IT and telecom systems into the cloud is a complex transformation for traditional VARs because it represents a complete 180-degree shift from their current break-fix models. To that end, Ingram Micro at the end of 2010 launched Ingram Micro Cloud, which offers VARs a resource on cloud computing business development, including the ability to compare vendor offers, collaborate with peers and access training on cloud solutions.

Westcon Group also is shoring up its support for the cloud migration. The channel needs a lot of support and education right now as they build their cloud strategy,” said Craig Librett, director of public relations for Westcon Group. While, of course, cloud migrations will involve some traditional equipment procurement, distributors will also build out virtual shelves of cloud solutions that require bundling and different billing capabilities. Westcon is dedicated to helping partners on both fronts.”

As partners continue to grapple with the cloud, their more immediate transformation has been to provide managed services. VADs have become a key enabler for that change as well.

The managed services area is very important and helps provide the stickiness required in todays competitive environment,” said NETXUSAs Boone. Right now we provide automated configuration and fulfillment of hardware being used for those managed services,” he said. In the near future, the VAR will not only be able to order the gear and have it show up turnkey, but will be able to use NETXUSA element management systems to control the customer devices and IT resources remotely.”

Ingram Micro also is enabling VARs to become managed services providers with its Seismic portfolio. These run the gamut of network security to help desk to remote monitoring and management.

Community. Finally, VADs are promoting networking across their bases by developing communities of interest where VARs can find locate peers to share best practices and to collaborate or form partnerships.

ScanSource Communications parent company, ScanSource, introduced last fall a new tool that enables VARs to quickly and easily identify resellers, ISVs and hardware manufacturers for partnership opportunities across all geographies. The companys SUMO enables members to enter search criteria into a search bar to find a partner that best suits their needs according to level of expertise, location and skill sets.

SUMO can be used to help resellers extend their geographic reach or create alliances by identifying companies with specific technology or vertical market expertise. ISVs, meanwhile, can use SUMO to find resellers to help them market their software solutions, and hardware vendors can identify resellers to help them close sales in certain areas where they dont have feet on the street.

VAD Directory

Contact the VARs mentioned in this article:

ABP Tech

www.abptech.com
Partners: 5,000
Suppliers: 30
Products: IP PBX, IP phones, routers, QoS, bandwidth management, Internet security, PoE and switches, video conferencing, IP surveillance, IP-based access control

Ingram Micro Inc.
www.ingrammicro.com
Partners: 180,000
Suppliers: 1,300
Products: IT and Carrier Ethernet technologies, including services, storage, software, networking, wireless, tables and PCs, mobile devices and peripherals, digital signage, data center solutions, etc.

NETXUSA Inc.

www.netxusa.com
Partners: 4,200
Suppliers: 18
Products: All IP telephony (IP phones, switches, routers, headsets, gateways, IADs, IP PBXs, wireless devices, video phones, video conferencing units)

ScanSource Communications

www.scansourcecommunications.com
Partners: n/a
Suppliers: 28
Products: UC solutions, including video conferencing systems, network infrastructure, VoIP solutions (phones and gateways), IP PBXs, UC headsets

WestCon Group Inc.

www.westcongroup.com
Partners: n/a
Suppliers: nearly 100
Products: voice, data and video applications and technologies, including VoIP, network security and wireless and mobility-based connectivity

Looking for More?

Learn more about The Value of a VAD” at the Spring 2011 Channel Partners Conference & Expo, March 13-15, in Las Vegas. For more information, visit www.channelpartnersconference.com.