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Differentiating on value, not cost

Joachim Sturmhoefel, Managing Director at SHE, explains how to avoid a race to the bottom on price when looking to stand out in a crowded market.

An infrastructure headache is coming. All businesses are facing the digital transformation ultimatum of disrupt or be disrupted. Yet many are in sectors that have not traditionally depended on being at the cutting edge of technology, creating both a challenge and an opportunity for the channel.

Joachim Sturmhoefel
Joachim Sturmhoefel

Navigating the network requirements that digital transformation demands can be difficult, and this has placed a lot of responsibility on the shoulders of resellers. They’re no longer middlemen designed to take the load off a vendor. Out of necessity, the channel has had to adapt to include a much stronger focus on consultancy. Today, it’s not enough simply to be a low-cost provider: resellers must also be business advisors to their customers.

Success for those operating in the channel depends on anticipating problems before they arise and in finding creative solutions to the unique challenges faced by different industries. In 2018 and beyond, this is what will help resellers stand out from the crowd – but only those that embrace the new approach required.

The challenge of digital transformation

Take the education sector, for example. Universities and colleges have had extensive IT networks in place for a long time. However, the heightened connectivity expectations of students and faculty members alike, together with the ever present need to lower operating costs and make grant money go further, is putting renewed pressure on these institutions to introduce more flexibility to their IT environment.

Some of this is straightforward. Moving to cloud-based systems, creating a VPN for secure remote access and rolling out Wi-Fi across campus can all be tackled quickly with the help of a reseller partner. However, not everything is so easy, especially for universities involved in research.

End users in research environments depend on high value software that can’t be delivered as-a-service. Instead, such software is typically protected by USB-based hardware authentication, which is physically plugged into the target machine to verify the licence and allow that software to run. Evidently, this creates a barrier to the flexible operating environment that’s needed, posing a challenge for educational institutions looking to modernise, but also a chance for resellers to add extra value for their customers.

Thinking outside the box

For the channel, there is always a risk that high levels of competition will result in a race to the bottom on price. However, as IT environments become increasingly complex, there is scope for resellers to provide an essential consultancy role, with the more forward-looking not just reacting to issues as they arise, but anticipating specific issues ahead of time.

Hardware-level software protection is a prime example. Standard IT environments are increasingly shifting towards SaaS, so the need for physical USB authentication devices often isn’t an issue. However, there are certain industries – accountancy, utilities, education – where this technology is critical and where a standard cloudbased set-up doesn’t solve the problem.

This is where thinking outside the box and looking for products that tackle niche challenges, such as software licensing, can set resellers apart.

Dongle servers are not necessarily a staple in the arsenal of IT resellers, but in certain situations they provide an ideal workaround that allows enterprises to overcome the problem of hardware authentication and to take full advantage of digital transformation. Plugging all licensing dongles into a single server so that they become available over the network and work in much the same way as if they’d been connected directly to the user’s computer, extends the flexibility offered by cloud computing to physical systems and makes the location of the user completely irrelevant.

Reaping the rewards

You might ask what’s in this for resellers? The answer is a much better differentiator than the lowest price to deploy. Take the University of Missouri. It needed the flexibility to use software across different sites and wanted to reduce the number of licences needed for its Dalton Cardiovascular Research facility, each of which cost $3,000-$4,000.

By incorporating dongle server technology into its IT infrastructure, it was able to serve 17 labs at Dalton and any other lab associated with the University with just five licences, minimising costs without impacting ease of use, while remaining within the terms of the licensing agreement.

Solving problems in a way that demonstrates a real understanding of a client’s business and an ability to anticipate and solve challenges and deliver solutions that result in cost savings eliminates a race to the bottom on price and helps builds trust – a crucial component of any consultancy business.

In an increasingly loud market, smart resellers will not only look to partner with the best vendors but will also focus on finding innovative solutions, like dongle servers, that solve very specific problems before they arise. The result is not just a happy customers base but a business that differentiates on value rather than price.

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2018