Six steps to building professional services revenue
The vendor says it was prompted after its research showed VARs expect professional services to become their main revenue generator by 2020 – but it only accounts for 25 percent or less of revenues today.
Explains John Mitchell, UK channel sales manager at Brocade: “Over 80 percent of channel organisations questioned in the Channel 2020 survey said that they offer professional services, and it is clear that the channel see professional services as where the bulk of their revenues will come from in the future. However, professional services delivery requires a different skill set, and Brocade believes that vendors have a responsibility to their partners to help them transition and develop that skills set so they can reap the rewards of their investments.”
According to Brocade, channel firms need to:
1. Recognise the importance of perception over price
Product resale may often come down to price, but there is a different value mechanism in play when it comes to selling expertise. Reputation and brand become more important as how the organisation is perceived will come to dictate customer trust and whether they are willing to pay for advice or not. Channel organisations should take advantage of vendor programs that will help them build and promote their professional services reputation and brand.
2. Look for the ‘open’ opportunities
Proprietary technology design closes off many more services opportunities than it opens, preventing channel organisations and their customers from developing best of breed solutions that require consultation, design and support, while only resolving a fraction of the customer’s actual demands. Channel organisations should look for vendor agnostic solutions to add to their portfolio.
3. Make sure they qualify
Technology is always changing, and most customer environments remain highly complex, multi-vendor sites. Knowledge is power in these situations, and knowledge means staying informed and educated. Channel organisations need to make sure their teams have the necessary vendor qualifications. It can help with understanding the best technologies for a given customer, what conflicts there may be, adds to their overall value as an advisor, and also often opens up better incentives and access to vendor resources.
4. Expand their horizons
Even if a channel organisation wants to specialise, a good general understanding of relating technology and business needs is critical. They may focus on applications, but if the network is not able to support new applications or access to applications via cloud, the customer will only see that their investment is not resulting in the required improvements. Channel organisations need to make sure their professional services staff expand their understanding of the holistic whole of the environment.
5. Stand out from the crowd
Technology differentiation is the clearest way of standing out from the crowd and offering the customer something different. Professional services is not about going with the status quo, but understanding what different, better, solutions may be available and putting forward a solution that gets the customers attention.
6. Ask what value do their vendors add?
Channel organisations need to ask: “Do my vendor partners’ strategies, vision, and approaches to technology design support or impede our ability to maximise any professional services and support revenue opportunities? Do my vendor partners compete with me for professional services opportunities?” If the answer is “yes”, they should review the vendors on their roster and consider what overall value they deliver.
The report was also critical of vendors in general, with Brocade recently stating that VARs felt that as well as facing direct competition, their professional services ambitions are being restricted by a lack of innovative solutions on offer, overly complex programmes and proprietary vendor technologies.