Channel Marker

Oct 1 2008   2:12PM GMT

Economic meltdown: What’s a reseller to do?

StorageSwiss George Crump Profile: StorageSwiss

SearchITChannel.com is happy to add a new member to its Channel Marker blog roster today, with the appearance of George Crump from analyst firm Storage Switzerland. George will be blogging twice a week on storage and systems topics of interest to resellers and integrators, as well as general channel business issues, drawing on his 25 years in technology, including a stint as CTO at one of the nation’s largest storage integrators.

George is a prolific analyst; you can find his expert opinion on SearchStorageChannel.com, SearchSystemsChannel.com, as well as a number of other TechTarget websites and other industry outlets. George is also a frequent speaker at industry events; in fact, you can catch him at this month’s Data Center Decisions in Chicago.

His first post has advice for those of you at a loss for how to cope with today’s economic turbulence.

Sue Troy
Site Editor, Channel Media Group

Well, it’s overreaction Wednesday and the market is down again. Here is a quick stock tip: Buy every other day. OK, back to the title: Given these troubling times, what should a reseller do?

The first piece of advice is that, unlike the news media and our elected officials, you should not panic. I am going to assume that many of you were in the channel during 9/11. Remember how bad it was then? Is the current situation bad? Sure. Is it worse? No, I don’t think so. I don’t want to make light of the situation by any stretch — this is serious and times are tough — but it is not the end of the world, and we are not going back to the days of picks and shovels.

Here is what I know about the reseller community. You guys are tough! And you guys are survivors. Other than MS-DOS, I don’t think anything has been pronounced more dead more often than the reseller channel, but you’re still here, being successful at the very thing that was supposed to kill you: selling products and services.

Feel better? Good. But how are you going to survive this one?

First, remember that after the shock and maybe even during it, there will be companies that need products and services. There will be a lot of them. You may have to hunt a little harder to find them, and the competition for fewer accounts may be more stiff, but those accounts will still be there. Don’t exclude financial companies from your list of prospects. I met with a financial services company on Friday that is approaching near-record revenues. How? They get paid on transactions to and from the markets. Have you noticed the market volumes the last few days? Opportunities still abound, you just have to find them.

Second, remember that IT budgets will shrink, but most will not evaporate. This means you have to be flexible. It is true companies may have less money to spend. You may have to restructure your product offering to find lower-cost solutions to current budget realities. This is great news for the reseller; no organizational group in the industry can react to a changing market condition like a reseller can. If the situation gets really bad, even two- or three-year ROIs won’t cut it. Your customer won’t have the money to spend upfront to recoup the investment later. They will need solutions that save them money now.

Third, offer products and services that will help customers get more miles out of their current investment. Archiving is a great example. For a minimal investment your customer can clear up terabytes of primary storage, delaying or eliminating buying more primary storage for three years. And there are many more examples of ways to get more out of the current investment.

I know it sounds trite, but the most important thing you can do is keep a positive attitude. One of the downsides of 24-hour news is that they give you the bad stuff repeatedly, and right now there is plenty of that. Flip on a good music station, listen to an audiobook, heck, send me an email, I’ll cheer you up. It’s true, to maintain or even grow your standard of living over the next few years, you are going to have to not only work smarter but harder, and you can do it!

In the next entry, I’ll get back to normal blog length as we discuss why the economic downturn will be the best thing for resellers. After that, we can get into some technical stuff, but I needed to get this economy thing off of my chest.

Track us on Twitter: www.twitter.com/storageswiss

George Crump is founder of Storage Switzerland, an analyst firm focused on the virtualization and storage marketplaces. It provides strategic consulting and analysis to storage users, suppliers, and integrators. An industry veteran of more than 25 years, Crump has held engineering and sales positions at various IT industry manufacturers and integrators. Prior to Storage Switzerland, he was CTO at one of the nation’s largest integrators.

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