As cloud computing simplifies the access to software and services, the technology market have evinced a shift from capital expenditure to operating expenditure practices. With this, the risk of elimination of the VARs is quite eminent, because of the increase in the ability of suppliers to channelize their products directly to the customers.
But does that mean that VARs will not survive? Absolutely Not!
Every industry segment has a strong relationship with its consultative VARs. They are abreast with the companies’ products, services and operations and it’s not possible to disconnect with them. But the methods of adding value to these companies will definitely change for their survival in the long run.
The most important towering question hovering in the cloud market for the VARs is, “What are the opportunities for transformation of the VARs?
Traditional IT products operate on clearly defined architectures and feature sets whereas cloud computing technology is more virtual and decentralized. Hence, from a distributor and reseller’s view point, this makes the technology more difficult to move through a traditional supply chain of picking, packing and shipping. It has shortened and this is where an opportunity for the VARs crops up:
- The end customers’ hunger for complex IT is growing. Hence VARs’ close integration with their customers’ current software, hardware and management data typically speeds up customer acceptance and adoption of cloud services.
- The user margin pressure has become more sophisticated. “Cloud” is the word. Consumers have become far more convoluted in their approach to gain market knowledge and have set higher expectations of service and value.
- The standard method of business and lack of innovation is thwarting the businesses towards saturation and monotony. Businesses desire for better channelization of these. VARs can help them generate repeatable and scalable demand for their products and services.
- Though companies are introducing a myriad of services and products, the advancement in the new businesses like cloud and service providers is comparatively slow. The distributors and resellers help them gain visibility into sell-through business
- New competitors are entering the market. The VARs hold the acumen to identify the top performers.
Shifting of applications, security and servers from physical to a virtual environment has created a strong market challenges for traditional VARs. The sale of servers had declined dramatically in the last year. The VARs are also surrounded by competitors who were “born in the cloud’ which gives them an upper hand on understanding the market.
VARs need to analyze the prevailing market situation and take advantage of it and see where they can fit in as the best facility both for the business and its end-users. But first, the VARs should adapt to the changing technology and transition to the cloud successfully. For this, they need to chalk out new revenue models, update their marketing and sales skills. The solution for the VARs to survive is to enter and embrace the Cloud market and run parallel with its dynamic shifting trends. With this, they will not just survive, but thrive as well.