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Selecting and reselling new technologies: minimizing risk to maximize revenues

As Virtual Instruments is a relatively new company (established in 2008) we’re working hard to give our channel partners the tools they need to encourage customers to adopt our innovative technology and embrace a relatively new concept: Infrastructure Performance Management, or IPM.  And already 30% of Fortune 100 companies are taking advantage of the benefits of our flagship VirtualWisdom platform so that they can effectively see across their IT infrastructure and manage performance. But why is this important? And what should resellers be looking for?

While vendors may invest billions of dollars in research and development, as we all know only a small proportion of new technologies make the final cut and become viable solutions. The challenge for the channel is to identify the best ones to go with. My colleague, Douglas Smith, recently posted a blog that discusses three features that solution providers should look for in a vendor. Doug emphasized the importance of a complementary product portfolio, industry specialization and the go-to-market strategy. Here, I have expanded on Douglas’s insights and have outlined some practical tips on making an informed decision around new technologies, standards or product developments, and how to help customers embrace them.

As with all major decisions, due diligence is vital but this should not be limited to looking at the vendor’s cash flow and profit and loss accounts but the whole offering. Questions to be asked include: what will the vendor provide in terms of training, demos, marketing, promotion and customer education costs? What’s the vendor’s track record in working with the channel? What level of technical support is offered? What is the technology and company roadmap for further down the line? What level of commitment is there to the product range or compatibility with other vendor products?

It’s easy to be attracted by high margins but if a vendor is not offering a true commitment to support and promotion for a new technology for the longer term, success for resellers will be difficult to achieve and, in any case, short-lived.

When it comes to emerging technologies, the additional challenge is in persuading customers to adopt them. This can be particularly tricky as in most cases the end user is actually not aware of the problem that the new product solves. This means that a campaign is needed to educate users about both the problem and the solution. Such programs usually include a combination of above and below the line marketing activities including seminars, webinars, demo days and white papers.

Third-party endorsements are also important to eradicate any skepticism, so case studies and references are essential. If starting from point zero, incentives can be used to make the buying proposition more attractive and encourage customers to become references. For example end-users can be offered a discount in exchange for a reference. While the ideal reference is to achieve a written endorsement and case study, it’s also very important to have customers willing to speak to prospects but even if it’s just permission to name the customer, this still gives reassurance to potential leads that the technology is a viable one. This is why vendors are often prepared to give marketing development funds and resources to achieve good references.

To get good customer references it’s not only important to encourage sales but also to encourage long term use of the new technology. It’s appalling that many new products don’t see the light of day because the underlying value of the new technology wasn’t realized during the brief test period or full-scale implementation was seen as too much hassle. There are also countless examples of new IT equipment being bought and not used as the project it was going to be used for was scrapped and the IT manager is at a loss as to how to implement the technology elsewhere in the business. Mixing the new with more established technology in a package for the end-user can help avoid this outcome.

Backing a new technology can yield rich pickings for the channel and by following this guidance, resellers can start to differentiate the wheat from the chaff. However, without robust marketing and support from the vendor, new technologies are unlikely to succeed in the dynamic IT marketplace.