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‘You break it, we fix it’ model changes

01 Sep 11

The days of resellers being able to grow their revenue based on the simple ‘break-fix’ paradigm – fixing customers’ IT problems as they occur – is on the way out, according to Richard Paul, SnapperNet director.
Paul says SnapperNet’s resellers are increasingly focussing on services contracts and hosting applications and data on behalf of their clients as a way to grow revenue and increase business. He says he’s seen ‘lots of movement’ as resellers seek the most appropriate platforms and business models.
"In the last couple of years resellers have been experimenting and trying different ways to take advantage of new opportunities that virtualisation offers,” Paul says. "Some are realising that rather than do the hosting themselves, and building infrastructure, reselling the services is the right way for them.
"There are some very good hosting companies out there where you can brand and resell the service and the value you add to your customer is how well you implement at their site and how well you keep their office humming.”
Paul says small resellers can react faster and look after customers better than many of the larger organisations who are focusing on wholesaling services. "They can be more flexible and reactionary and can provide closer value-add services to the customer,” he adds.
But he cautions that resellers need to decide the path they’re going to take – and soon. "A lot are still experimenting on how they’re going to do it, what platforms they’re going to use. Everybody knows the opportunities and challenges. Now they need to decide the path they’re going to take.”
The company is bullish about the year ahead: Paul say figures to the end of June show revenue is up 20% on the same period last year – and that’s on top of a 20% increase seen in 2010. "We were not going forward in 2009, it was the same as 2008, but our recovery since has been fairly steep,” he says.
Paul says that recovery is coming as companies take IT projects off hold. "Once we saw the wise heads saying we are heading into recovery, it was like a rubber band, suddenly everyone is going ahead with projects.”
Paul says while the projects aren’t necessarily huge there is a constant stream of them. "Our pipeline is full at the moment,” he adds. "Most of the business our resellers are quoting on, they are getting. What you don’t want is a fantastic period of sales followed by an operating forecast of nothing. But that’s not an issue at the moment.”
He says network attached storage is providing big opportunities, with the company’s QNap NAS offering ‘a big hit this year’.
"Storage has been growing for a few years now with people getting a lot more, and richer, data and while they used to store it on file servers, now a lot are looking for specialised appliances for storing data. And they want a way to back data up. Virtualisation has also certainly helped increase the demand for NAS,” Paul says.
Firewalls and Internet gateway offerings are also proving popular, as customers realise standard Internet routers don’t provide sufficient protection from malware and the likes, he says.
However, Paul notes that despite optimism for the future, one concern remains: "It’s still taking longer to get paid”. He says some resellers are taking two-three times as long to pay as in the past. "If you look at payables and call them assets, it looks pretty healthy, but you have to watch cashflow as well. It’s no good if there isn’t money in the bank.”
The company, which has previously specialised in representing overseas brands which don’t otherwise have a presence in New Zealand, has branched out, entering agreements to stock products from local importers and distributors including Ubiquiti wireless LAN equipment, Socomec’s UPS offerings, Atlona’s audio video extenders and products from New Zealand’s Mako Networks.
SnapperNet’s reseller network will have the opportunity to question some of the international vendors later this year when the distributor hosts a conference, including ‘a forum style meeting’ and presentations from the vendors. 

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