The channel challenges of standardisation

High-end hardware standardisation gives channel partners in this area a stark choice: evolve into a software-based systems integrator or be superseded by competitors that do.

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By  Stuart Wilson Published  February 14, 2004

Selling enterprise hardware has long been a fertile playground for systems integrators and high-end hardware dealers.

Thanks to multiple hardware standards, multiple operating systems, complex mainframe integration requirements and the frequent need for intensive architecture customisation on a client-by-client basis, there was margin to be made in putting together and maintaining high-end IT systems.

In fact, it was a jolly good show from a reseller perspective.

So it comes as no surprise that when high-end hardware vendors start bandying around the word ‘standardisation’ in relation to high-end hardware, resellers become a little bit edgy. After all standardisation signals the end of customisation and simpler integration between proprietary IT silos. None of this is good news for the high-end hardware focused resellers whose very business model is built around the complexity and individuality of high-end hardware requirements. To them, ‘standardisation’ is almost akin to a swear word.

Regardless of this antipathy towards the quest for standardisation, resellers have to understand that in an IT world dominated by a handful of major vendors it is becoming an inevitable process. Standardisation in high-end IT systems makes perfect sense to the intelligent customer and vendors have little problem pitching a strong return on IT investment argument to them.

After all in a standardised world, the high-end hardware has less chance of becoming obsolete making it a much sounder long-term investment than a highly customised individual IT architecture. It also has buy-in from major software vendors across the board and is capable of using multiple operating systems.

Typically, high-end hardware vendors also have a direct sales relationship with large accounts — a major buying group for high-end hardware. More now than ever, this direct touch is filtering down into the SMB customer space, at the very least from a marketing perspective. In other words, the message is out there, the direction is set and partners need to choose a business strategy that follows the vendor roadmap as opposed to burying their heads in the sand and hoping that the push for standardisation will amount to nothing. With vendor and customer lined up and ready to go, partners need to follow or be left behind.

Partners selling high-end hardware have grown accustomed to specialising around operating systems but the challenge now is to replace those skills with applications knowledge and software expertise; skills that can be recycled time after time with multiple clients. With major ISVs buying into the benefits of standardised architecture, building software skills is the best path for resellers to take to ensure their long-term survival.

In standardised high-end hardware environments, the provision of maintenance services also becomes more of a commodity. After all, each system is fundamentally similar making the service requirements consistent across multiple customers. This reduces the need for specialist customer knowledge and makes economies of scale achievable for service providers. With this in mind, HP’s decision to merge its services division alongside its Enterprise Systems Group (ESG) comes as no surprise. The message to partners behind this move is clear: let HP focus on the infrastructure and maintenance services and you can focus on building application integration and services expertise.

Controlling the application means controlling the customer and it is where a partner should want to be. Vendors are keen to help their partners make the transition and those that do can expect support, education and leads. Those that do not, will find themselves marginalized and under margin pressure. The classic high-end hardware integrator faces a stark choice: evolve into a software-based systems integrator or be superseded by new start-ups and existing companies capable of making the leap.

Do high-end hardware resellers need to make this leap? Are vendors pushing them down this path for other reasons? I really want to know your views and opinions on this subject, so please do not hesitate to get in touch.

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