The VAR 500:Strange Bedfellows

June 25, 2009 at 12:18 am Leave a comment

Beth Vanni

Beth Vanni

I’m so glad I get time to sit on airplanes. Really. It seems to get the unlikely place where I get the best, most cogent reading done, while locked in those tiny seats. This morning that reading involved the much-awaited CRN VAR 500 issue (May ‘09) – OK, I’m a little behind….
So, there are three things I’m usually interested in with this issue;
1)  Who’s in the top ten?
2) how many new entrants have made it onto the list?
3) What the average year-to-year growth rate is of the overall group?

Granted,I’m still waking up to my first cup of Southwest Airlines coffee and I’m trying to glean a couple of these three things. But, immediately I have to do a double-take. It’s in the second sentence of the article. “The figure ($597,588,818,754 – total VAR500 annual revenues) is roughly $200 billion (yes, billion) more than last year’s number, largely because of the inclusion of the vendor services arms.” Huh? The vendor’s services arms?southwestairlines

Vendors were placed on a separate list of 25 in 2007 and 2008 and called “the Vendor Top 40” listing. The publication explains that the vendors were reintegrated onto the list, “recognizing their value as solution providers.” Well, yes, vendors add a lot of value to the IT market through their technologies and services. And, through the customer reach and services of their channel partners. But, isn’t putting the vendors’ own direct services divisions in clear and direct ranking competition with their very own channel partners IN A CHANNEL FOCUSED PUBLICATION pretty much heresy?   Now, I’m smart enough to understand that one size doesn’t fit all.  Would anyone really argue that IBM Global Services is a major force among independent global systems integrators in the IT market?  No, unless they wanted to forfeit their job.

And, admittedly, the combination of HP/EDS into one mammoth global services organization deserves the same credence.   But, when you start talking about Sun Microsystems Services, Cisco Services and Microsoft Services, things get much dicer. At least they would for me, if I was a sizeable solution provider reading this article! All three of those notoriously channel-committed companies are ranked among the top 50 “VAR500”. Ironic, isn’t it?

I’m not suggesting any major IT manufacturer shouldn’t have a meaningful services business, mostly to support their emerging technologies and to provide critical proof-of-concept to key customers to help create the market for their technology.But, when you ask the solution providers of EMC, Oracle and Cisco how they feel about the clarity of engagement model and “channel friendly” support they get from these three vendors around services delivery on those technologies, you will likely get some sour faces.   Especially if those channel partners are in the 300-500 ranking level on that VAR500 list!

I contend that developing a clear and channel-aligned services delivery strategy is the final frontier to becoming a truly channel-centric organization. In our annual State of Partner Program Study report, 48% of vendors indicated that they still had remaining channel conflict between their own direct services delivery teams and their services channel partners. Hmmmm…. nearly 50%. That statistic bears itself out in a lot of our channel strategy and program assessment engagements with vendors as well.

I know the Everything Channel people want more readers, more eyeballs, more impressions. And, making that list seem bigger, growing faster and with bigger names on it probably doesn’t hurt in that area. But, I don’t think when partners roll over in bed, they want to see the horse-head of some of their biggest competitors staring them in the face……


Entry filed under: Industry Perspective. Tags: , , , , .

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