Friday, 20th September 2019

Helping channel providers differentiate on value, not cost

An infrastructure headache is coming. All businesses are facing the digital transformation ultimatum of disrupt or be disrupted. Yet many are in sectors that have not traditionally had such reliance on being at the cutting edge of technology, creating both a challenge and an opportunity for the channel. By Joachim Sturmhoefel, Managing Director at SEH .

Navigating the network requirements that digital transformation depends on can be difficult, which has placed a lot of responsibility on the shoulders of resellers. They’re no longer middlemen designed to take the load off a vendor. Out of necessity, the channel has adapted to include a much stronger focus on consultancy, as it’s not enough to simply be a low-cost provider. Resellers must now also be business advisors to their customers. 


Success for those operating in the channel depends on anticipating problems before they arise, and in finding creative solutions to the unique challenges faced by different industries. In 2018 and beyond, then, this is what will help resellers stand out from the crowd – but only those that embrace the new approach required.


The challenge of digital transformation 


Take the education sector for example. Universities and colleges have had extensive IT networks in place for a long time. However, heightened connectivity expectations from students and faculty alike, together with ever-present needs to lower operating costs and help grant money go further, is putting renewed pressure on these institutions to introduce more flexibility when it comes to the environment they run.


Some of this is straightforward; moving to cloud-based systems, creating a VPN for secure remote access, and rolling out Wi-Fi across campus. All these challenges can be tackled quickly with the help of a reseller partner. Not everything is quite as easy though, particularly for universities or colleges involved in research. 


End-users in environments like this depend on high-value software that can’t be delivered as-a-service. Instead, this software is typically protected by USB-based hardware authentication that’s physically plugged into the target machine to verify the license and allow that software to run. Evidently this creates a barrier to the flexible operating environment that’s needed. It’s a challenge for educational institutions looking to modernise, but is also a chance for resellers to add that extra value for their customers.


Thinking outside the box


For the channel, there is always a risk that high levels of competition will result in a race to the bottom on price. However, as IT environments become increasingly complex, resellers are providing an essential consultancy role as part of their business. The result is that chance for more forward-thinking resellers to get ahead – not only by reacting to and resolving issues as they arise, but also by anticipating the specific issues their clients will face ahead of time.


Hardware-level software protection is a prime example. Standard IT environments are increasingly shifting towards SaaS and therefore the need for physical USB authentication devices isn’t always an issue. However, there are certain industries, accountancy, utilities, as well as education, where this technology is critical and a standard cloud-based set up doesn’t solve the problem.


This is where thinking outside the box and looking for products that tackle niche challenges, such as software licensing can set resellers apart. Dongle servers, for example, are not necessarily a staple in the arsenal of IT resellers, but in certain situations they offer an ideal workaround to enable enterprises to take full advantage of digital transformation. It allows the problem of hardware authentication to be overcome by plugging all licensing dongles into a single server. They can then be made available over the network, working in much the same way as if they’d been connected directly to the user’s computer meaning the location of the user is completely irrelevant extending the flexibility offered by cloud computing to physical systems. 


It isn’t something that every business needs, but by understanding how it can be deployed in certain situations to address specific challenges, channel partners can add infinitely more value than their competitors. 


Reaping the rewards


But what’s in it for resellers? The answer is a much better differentiator than the lowest price to deploy. Take the University of Missouri. It had the exact issues outlined above – it needed the flexibility to use software across different sites. Not only this, it wanted to legally reduce the number of licences needed for its Dalton Cardiovascular Research facility, which cost $3000-$4000 each. 


By incorporating dongle server technology into its IT infrastructure, 17 labs at Dalton and any other lab associated with the University system could be served by five licences, minimising costs without impacting ease of use and within the terms of the licensing agreement. The result was a significant positive impact on the bottom line in a sector that is notoriously squeezed from a funding perspective. 


By solving problems and having a knock on effect in reducing costs elsewhere, it eliminates the need for the race to the bottom on price. Not only this, but it builds trust – a crucial component of any consultancy business. Showing a real understanding of a clients’ business, the ability to anticipate and solve challenge for them, and deliver solutions that result in cost savings elsewhere results in a long term relationship likely to be far more fruitful. In creating an architecture to suit their clients’ needs, rather than offering the one size fits all approach of many providers, a distributor can differentiate themselves as a true value-added reseller.  




For both industries that have a heritage in IT systems and those who don’t, solutions such as dongle servers are not necessarily on their radar, despite the huge potential benefits they offer in terms of cost saving and efficiency of sharing software licenses. 


With an increasingly loud market, smarter resellers will not only look to partner with the best vendors but will also focus on finding those innovative solutions that solve very specific problems before they arise. The result is not only happy customers but a business that differentiates on value rather than price.


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