Heading into the New Year, the EDGE360 editorial team is checking in with our regular contributors to get their insight into what is of import for 2019 for the value-added reseller market and, in this post, for the small- to medium-sized business reseller space. We heard from David McNicholas, former director of strategic business development for North America for Comstor/Synnex, in our series on 2018, so we reached out to him for his thoughts on the SMB / VAR world in 2019. Here’s what he had to say:
EDGE360: Is there anything that you see in terms of challenges and opportunities that could affect the SMB space in 2019?
McNicholas: I’m seeing a lot of challenges and struggle with trying to get sales people transitioned into a new motion of selling from a business solutions viewpoint – and selling at a different level, that being the executive suite. VARs still need to know the technology. You can’t bring technology into a business value proposition if you don’t understand the technology. However, people can’t just keep selling technology, because more than 80 percent of the budget is in the line of business. They need to understand the business. I’ve been saying this for years, but I am finally seeing VARs move to the business sale. So, the challenge for them will be to find the right talent who can sell the technology to the business. Beyond that, because technology is moving so fast, they need to figure out what they want to focus on. They can’t be everything to everybody.
EDGE360: Are there any new technologies/updates to technologies that you think will be of interest to the space?
McNicholas: There is a lot of technology out there that I like for the space and know they can leverage for great, long-term revenue opportunities. The one the SMB space must figure out and have a play with this year is artificial intelligence (AI). They must determine how they plan to play in the AI space and one way is to understand that AI is 100-percent dependent on having high-performance, highly secure, hyper-converged infrastructure. Everyone wants to start taking advantage of AI, but you can’t just say, “Hey, let’s go get some of that AI’ and just load it up and put it on what we have. The entire enterprise must be prepared and ready, and that is where the SMB VAR comes into play. They can go to their customers and offer to help them get their infrastructure ready for AI or whatever they may want to plug into it.
EDGE360: What should a VAR be thinking about / working toward in the New Year?
McNicholas: Just focus – know what you want to be, become specialized and be excellent at what you decide to do. That means you can’t be everything for everybody, which means you have to get comfortable with saying no. Just because there’s a deal and somebody wants to buy something doesn’t mean it’s a good opportunity for your business.
EDGE360: What do you predict for 2019? If 2018 was the year of ____, 2019 will be the year of _____
McNicholas: If 2018 was the year of hybrid cloud offerings, then 2019 will be the year of continued consolidation and competition, more daunting competition from consolidating large DVARS. SMB VARs must move toward recurring revenue and managed services. There’s just no margin left in the gear, unfortunately. You have to offer it, but you must layer on the recurring revenue. That’s where you make your money.