For quite some time, value added resellers have been an accepted way of helping large vendors reach out to smaller companies. The rationale for using VARs is that the larger vendors quite understandably tend to focus on larger opportunities, and as a result can't service the smaller sales prospects properly. The practical result of this for the customer is that local resellers often can provide better pricing - and almost always can offer better service - to smaller companies than the vendors can.
How can a VAR offer better pricing than a sales rep who works directly for the company that builds the product? Resellers have long-term relationships with their vendors, both hardware and software, and know that by achieving certain sales targets they get added margin to play with. But pricing is probably the best part of what they have to offer.
Last week I was at the StorageWorld Conference in Long Beach. For me StorageWorld is an interesting gathering as it attracts a much larger share of IT people than do most other such conferences. As a result, I got to spend a lot of time talking to attendees who live in the real world. In addition, I did put in some time chairing a session aimed at helping small and midsize businesses work more effectively with their resellers in order to get more value out of their purchasing efforts. This session had some interesting results.
Sitting on my panel were four well-behaved (for sales guys) reps from some southern California resellers: David Browning from Advanced Systems Group, John Wade from Intervision, Rich Boccinfuso from MTI, and Chad Cardenas from Trace 3, representing companies such as EMC, HP, IBM, NetApp and a host of others. They played by the rules. Nice job, guys.
An interesting question from the floor concerned the issue of whether it makes more sense to deal with VARs that represent a single vendor or with those that provide a sales outlet for several vendors at once. Obviously, a good case could be made for either choice, but I suspect that when it comes to this sort of thing a lot of the decision-making has more to do with the company you feel "comfortable" with than with anything else.
By the end of the session it was clear to most that reseller-buyer relationships are as strategically important to SMBs as are the direct relationships that the vendors maintain with their large IT customers. Why? Because VARs often represent hundreds of smaller customers - with aggregate buying power that may exceed that of a very large enterprise client - VARs have a very easy time of it when it comes to getting the ear of their vendors. As a result, in cases where a single small voice would typically not attract much attention with a large vendor - or at least would not get as much attention as the larger companies would receive - a VAR is in just about every sense a large customer of the vendors, and has the potential to be a very squeaky wheel indeed.
A VAR would thus be a much more effective advocate for 200 customers than the 200 customer could ever be if they were speaking individually. Additionally, because so much of the real cost of storage is associated with the long-term operational expenses associated with maintenance and management, having good connectivity to a vendor so you can swap in more effective technologies as they become available may save lots of money in the long run.
It's a good bet that all VARs aren't necessarily good VARs. But a good VAR can often deliver very good value that would be impossible for smaller companies to get on their own.