Vendors holding back VAR services

Nov 06, 2012

New report from Brocade critical of vendors’ channel programmes

Many channel firms are being impeded in their efforts to move toward cloud-based professional services due to a lack of flexibility and capability by their vendors, according to a new study by Brocade [NASDAQ:BRCD].

The report is critical of vendors, stating that in addition to facing direct competition from vendors, VARs’ professional services ambitions are also being restricted by a lack of innovative solutions on offer, overly complex programmes and proprietary vendor technologies.

Based on a survey of more than 500 channel organisations, the study reveals that almost half of respondents expect professional services to become their main revenue generator by 2020. Yet, for the majority of respondents, professional services currently accounts for 25 percent or less of revenues.

The research also revealed the growing customer demand for professional services, with complexity and constraints on CapEx reported as the biggest customer challenges. Only 11 percent of respondents currently look to their vendors for innovative finance solutions and 19 percent for marketing funding.

Unsurprisingly, Brocade offers up its own channel programme, and it’s “pay by port” subscription offering as potential solutions to the problem. Brocade Network Subscription allows customers to scale up and down to meet business demand, while only paying for the ports in use. Brocade argues VARs can close a deal that may have otherwise been lost due to CapEx constraints, while securing incremental revenue on an on-going basis.

Image: Shutterstock

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