There was a lot of churning in the security industry last year and that’s not in reference to making butter.
Unfortunately, few value-added resellers (VARs) and integrators found themselves unscathed by the deluge of recent acquisitions, mergers, bankruptcies, emerging technologies, discontinued products and a host of other business changes that epitomized the security industry.
Of course a protection against churn is growth, which can make a VAR stronger. There’s no doubt, all value-added resellers or integrators want to expand their businesses, but the recent influx of new security technology can sometimes blur the vision of which new products will deliver the next 10 years of profitability.
The newest technology, regardless of its hype and promise, is not always the one that will deliver profitability. Most technology is well designed, however it’s the support behind it that really makes for a great product. Unfortunately, it’s the VAR that gets stuck holding the bag when that new technology becomes obsolete, discontinued or the supplier goes out of business. A here today, gone tomorrow product or supplier makes for very unhappy end users and at the least, a tarnished reputation a VAR must live with long after the product and manufacturer disappear.
Another scenario that has further squeezed the VAR business model is that some legacy manufacturers haven’t kept their products updated due to the involved expense. Or they produce updates that aren’t compatible with earlier versions. Also, from the manufacturer’s perspective, maintaining two product lines after a merger is an expensive duplication of staff, facilities, and competing VAR territories.
Consider stability in products over hype
For that reason, VARs are increasingly reluctant to embrace the newest gadgets or companies that appear on the scene. Smartly, VARs should look for stability over hype. There’s no guarantee of a tomorrow in today’s business culture, but a VAR has a better chance of success when a manufacturer’s track record spans decades, instead of just years.
Likewise, the people behind the manufacturer are even more important than the product. Familiar faces and voices from sales and technical support to regional sales managers and right up to the national sales manager all spell stability.
VARs can increase business by signing with one of the numerous legacy manufacturers that have transitioned into the open-architecture portion of the business. A comprehensive product line from Web-based browser systems for smaller end-users ranging up to full-fledged enterprise-based systems is the best assurance of diversity.
The problem for the VAR is to align with the company with the best underlying fundamentals. The following are some checkpoints: Will all new leads be handed over to VARs?; How many leads are expected in a territory?; What kind of track record and integrity has the supplier displayed to other VARs?; Does the manufacturer have a reputation of trivial charges on small support issues?; What kind of training and support will the manufacturer lend and at what cost?; and How strong a customer support presence will the VAR get from the manufacturer, such as project managers, service technicians, 24/7 customer service and other support services?
Generally, access control hardware has become quite homogenized as many new and legacy manufacturers move to open-architecture systems. What separates suppliers is the support structure both for VARs and their end users. An argument can be made that VARs will fare better with a legacy manufacturer that has a decades-long support structure infrastructure in place versus those that have always depended on VARs to provide support. The bottom line on any VAR/manufacturer relationship is the manufacturer’s integrity--investigated through referrals and past relationships.
Bob Mosler is a security industry veteran with more than 30 years experience coordinating VAR relationships. Mosler is currently director of contract sales at Matrix Systems, Miamisburg, Ohio.