Channel Marker - A SearchITChannel.com blog

Channel Marker:

 

A SearchITChannel.com blog


Commentary for value-added resellers (VARs) and systems integrators on partner programs, storage, security, networking and systems.

Looking ahead: Economic uncertainty and the channel

Forget the scandals, the trash-talking, and the rhetoric of this electoral campaign season. The big issue for the coming year is going to be economic uncertainty–and that uncertainty is distinctly non-partisan. Regardless of who wins, 2007 promises to be dicey for small and medium-sized businesses, and for the channel as a result.

It’s not all bad news. Concerns about energy costs and inflation will continue to drive projects that squeeze more efficiency out of customers’ computing investments (like server consolidation and virtualization, business process re-eengineering, etc.). And the available pool of IT talent is again starting to shrink, boding well for an increase in managed services, hosting and support deals. But those same forces are going to affect how quickly service providers, systems integrators and VARs will be able to respond to those increasing demands, and put pressures on how those services are priced.

Over the next few months, we’ll be looking on SearchITChannel.com and the other channel sites at the market and technology forces that will drive channel business in 2007. But as far as the underlying economic conditions go, the only sure thing for 2007 is that nothing is for sure, regardless of who wins how many seats in Congress in November. Now’s the time to take a hard look at what you’re planning for your business, and to make sure you’ve got your financial bases all covered for a bumpy ride.

IT Managers = Influencers? I think not

How many times have you “made the sale” with IT managers at small and midsized companies, only to find out that they couldn’t follow through? Well, now there’s research that supports the anectdotal evidence that winning the hearts and minds of the IT staff at smaller companies, while not necessarily a waste of time, is an activity with very little ROI.

Shamus McGillicudy reports a survey by Info-Tech Research Group Inc., found that the smaller a company is, the less likely its IT managers are to be making spending decisions. “At companies with 40 or fewer employees, only 20% of IT managers had a say in such decisions,” he reports. For companies of 41-100 employees, only 30% had any influence; and at companies with between 101 and 200 employees, 45% claimed to have a stake in the company’s purchasing decisions.

If you’ve been around the SMB market at all, it’s easy to understand this data. Companies with fewer than 40 employees seldom have an “IT manager” that rates as an executive within the company. In my experience, the majority of companies of that size lump IT with facilities management, unless they’re technology-focused. Business managers of smaller companies tend to hold purchasing authority closely.

In other words, this research seems to provide metrics to the obvious. In fact, the influence of IT managers at SMBs is probably even less than the survey reports . What would be more interesting is to find out how many companies of that size have effectively outsourced the IT manager job to a managed service provider.

Hunger and Loathing

As we prepared to launch SearchITChannel and its daughter sites over the past few months, I spent a lot of time listening to people who labor in the IT channel, and to the people who run the channel programs at a number of major information technology companies. And I took away two major themes: vendors are as hungry as ever for channel partners; and resellers, integrators and consultants are more suspicious than ever of vendors.

The reasons for the former are pretty clear: regardless of how much they invest in direct sales and services organizations, the major IT players are utterly dependent on the channel to get their product in the hands (or the data centers) of most of their customers. The reason for the suspicion is equally evident: channel companies increasingly see suppliers’ services efforts and other initiatives competing with them for their customers.

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