Consequently, this is having a profound effect on original equipment manufacturers (OEMs) and the value-added resellers (VARs) that work with them. As VARs work to reinvent their business model to take advantage of this third-platform economy, the choices that they make in terms of which OEMs to work with are becoming far more critical.
For VARs, choosing an OEM is about more than just the potential for profit in serving clients. It’s important to pick compatible OEM partners, because no matter how much their products fill your market niche, if they are not compatible, you can end up doing more harm to your business than good. Choosing an OEM can be a difficult process, but here are three tips to help focus on what is important in the relationship:
Tip #1: Invest the Time to Understand the OEM’s Company Structure
It can be difficult to determine the true structure of an OEM from just the partner plan and the incentives. There can be a difference between the support it says that it will give and the actual support.
With the potential for low margins with many third-platform solutions, it is critical that OEMs have the structure to support VARs in developing and providing services that support the products. This is a critical aspect that helps the OEM as much as it helps the VAR and sets the foundation of the actual relationship and its potential for success in terms of both parties.
This approach requires VARs to do their homework to see the potential with mobile, for example, as a driver of data center design and how some OEMs are developing mobile approaches for small to medium-sized businesses. Having this knowledge prior to meeting with reps will enable VARs to ask the right questions and to become more active listeners for the right answers. Knowing your needs, having a solid business plan, and being able to express it will help set expectations for the partnership on both sides.
Tip #2: Look for Tangible Signs of Investment for the Long Term
It’s very important to make sure that the details of the relationship with the OEM provide the type of support that will set the groundwork for your success. Seeing OEMs that share potential leads and market support rather than just leaving you to fend for yourself when first beginning the relationship is a good sign that they are in it for the long haul. It shows that they see the potential in working with you as a VAR and that they are willing to invest in that relationship to make it stronger.
As one example, market development funds can be enticing, but it can be more important to understand the support structure behind the funds. Most VARs have no real marketing department, so having the strategic support in terms of how to best target the marketing will really determine its success.
Tip #3: Keep Your Expectations Realistic
It’s very important for VARs to have reasonable expectations in partnering with OEMs in terms of what they can do for you. That doesn’t mean to stop pushing for the best partnership terms possible. That being said, it’s important to build your business model around the most conservative projections of possible performance. For example, developing a solid cloud business strategy before researching or vetting potential OEM channel partners is crucial to understanding what you need and what is possible in the relationship.
In the world of third-platform technologies, many OEMs are changing their channel-partner structures and are developing a playing field where they are essentially competing with VARs. This is more a result of how Internet marketing has brought far more choices to businesses in terms of doing their own research and buying products directly, without the need for VARs.
Establishing a mutually beneficial relationship with an OEM is all about both sides having clear expectations before entering the business relationship. For VARs, relationships built on a deeper understanding of the realities of what the OEM offers, besides just the products, is what will determine an ability to successfully make it part of client offerings.