“But from a partner perspective, if you’re competing against a partner doing it five percent cheaper, then you’re in the wrong business.
“The value lies in layering services on top of a solution, to make that particular customer sticky and reliant on you.”
From an Elite Business Systems perspective, Davies says the company has been in transition for “many years”, and continues to remain in transition as the market changes across the North Island.
“We’re always looking to extract revenue from different areas because if we stayed the same then we wouldn’t be here today, it’s a fact of life,” he adds.
“But still, there’s certain partners out there that should be protected, they deserve that and that’s where the local market has been challenged for years.
“We couldn’t decide tomorrow to go and sell Jaguar cars and that’s the biggest gripe for resellers, there’s no control and vendors must step up and help remedy this.”
In an age of squeezed margins for IT hardware sales, resellers are seeking higher-margin value to add to deals, built around integration and additional services.
To ensure protection as the channel ecosystem changes through the influx of new partners and born-in-the-cloud providers, traditional resellers are overcoming the threat of irrelevance through by realigning business models and deepening expertise in core technologies and sectors.
“As a partner, identify what your new value proposition is to the market,” advises Brent Kendrick, Director Small Midmarket Solutions & Partner Group, Microsoft.
“Don’t be a generalist, you won’t survive. Instead become a specialist, like Cyclone has within the education space.
“At the end of the day you’re not selling to the IT department anymore, you’re engaging with business decision markers meaning the focus is on outcomes, not cost.”
While providing superior IT solutions to customers not only differentiates value-added resellers from the competitive pack, Kendrick believes such a role helps establish a foundation of trust upon which a traditional reseller can develop and build a longer lasting relationship.
With vendors, distributors and organisations relying heavily on strong channel performance in New Zealand, the need to enable resellers becomes greater.
“It’s centres around an education of the workforce,” adds Grant Hopkins, Managing Director, HP New Zealand.
“The salesforce who sell mainframes are the salesforce of today and that’s a challenge for partners. Because of this the need to reeducate staff and create new skill sets becomes imperative to compete.”
As John Drayton, Country Manager, VMware New Zealand states, the key questions for resellers today are; “Are we still relevant to your business? And are you still relevant to mine?”
“And that’s a tough conversation to have,” he admits. “In fact it’s incredibly tough but such a mature conversation leads to a great outcome for both parties, whatever that outcome might be.
“Generally speaking, vendor product portfolios are broad and complex, so the requirement for a one trick pony is no longer there. So how do you drive value? That’s the conversation we are seeing in the market.”
As a vendor community, Kendrick believes the collective industry has a “responsibility and a role” to invest in resources that help develop a partner’s unique IP.
Echoed by Morris, to develop a unique IP and standing with the local market, partners must first understand customer businesses and challenges, to ensure a tailored delivery of services and support.
“When we talk about telling a story as part of understanding a customer’s pain points, workshops are great ways of achieving this,” he adds.
“They help resellers uncover a lot more about customers than what they already know, which leads to more opportunities in the long-term.
“If you go into a meeting expecting to have a mobility conversation, you may find added opportunities around security, or perhaps wireless, and a workshop provides the platform to do this.
“That way partners can begin to peel off the layers to better understand the business which ultimately leads to more opportunity.
“It’s not a sell, it’s advising a customer to come to the table and explain their business, and that’s when you see the additional value.”
Role of the distributor
As partners adapt and change, the diminishing of the classic channel model of yesteryear has already triggered a change along the supply chain, as distributors also succumb to new demands from businesses.