Don’t get stuck in the past, don’t look too far forward
A recent article by Rick Whiting on CRN ChannelWeb covered a warning that NetSuite CEO Zach Nelson issued to traditional ERP channel partners. Nelson said “If traditional midmarket VARs don’t change to meet the demand for cloud computing solutions, they will go out of business.” This comment prompted a response by a traditional vendor as well as a rebuttal from a NetSuite customer.
Don’t get stuck in the past
We agree with Nelson that cloud computing is the future of ERP (disclosure: ERP Cloud News is the URL of this blog). There are many mid-sized business customers without IT expertise that need to access an ERP solution from different offices and geographies. These customers will be well served by a cloud solution.
Don’t bet too heavily on the future
The Sage reseller also makes many valid points. First, a company with only 20% channel sales does not have a great channel program. This is because NetSuite aims to replace the training and support services that VARs provide with it’s own. In addition he makes the point that many SaaS solutions do not offer the customization capabilities which are critical to the VAR business model.
Just like there are customers that will benefit from SaaS, there are customers who will benefit from a highly-customized on-premise solution.
Focus on the “Value Add” in VAR
As the Sage reseller pointed out, “VARs must add their own special sauce to the mix”. If this special sauce is a add-on module, then find a cloud solution that allows you to use your existing development skills to port your application to the cloud. If the special sauce is customizing the application, then find a cloud solution which supports robust customizations. If your special sauce is customer support and training, then find a cloud solution with a business model that provides customer ownership.
Most importantly, realize that your customers may want to switch to SaaS and back to on-premise depending on their changing business needs. A VAR which understands how to help customers through this transition will be the most valuable of all.