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VAR 2.0

October 1, 2012 6 comments

Dynamics CRM sold under EA or on a credit card in the cloud.  Dynamics AX sold under EA.  GP and NAV in the cloud.  Software margins declining.  Plague, locusts and riot abound.  Oh, mercy me, what is the Dynamics reseller to do?

No idea.  Or rather to many.  But to me this looks suspiciously like an opportunity for VAR 2.0.

VAR 1.0 had an easy job.  For the most part, we sold high margin software to clients fed by occasional leads from MS; massive interest from clients forced by programmatic (Y2K anyone?) issues or platform changes (Side of web services with that client/server, sir?); and depended on very expensive staff to deliver software training and cutover services that we hoped solved core business problems.  However, we mostly focused on getting the system up within scoped budget and time.

Put another way, we sold a disk to run an application on a machine.  Then we sent some people out to set it up.

Machine.  Disk. People.  Machine.  Disk. People.  Machine. Disk. People.  Repeat until profitable.

VAR 2.0 has to approach this differently.  The machine is gone – the cloud takes care of that.  The disk is gone – the license gets rented.  What’s left?

People.

That’s right, the most expensive, time consuming, annoying, unpredictable and intractable part of your business is what you’ll have left.  The good news, however, is that with the shiny machine and magical disk gone, you can use your people to focus on what’s most important to the success of your business.

The success of your client.

Scary, no?

Screw that, its not scary.  It’s a hoot, a holler and a joy.  By removing software margin from the occasion we also remove a host of un-natural acts designed solely to drive software sales and not to drive customer success. Now, we can serve the client by giving them better systems to run their businesses faster, more productively and with less cost so they in turn can serve their clients even better. 

With machine and disk out of the way, VAR 2.0 can focus on running a deal cycle where the majority of the customers spend is on solving business problems through the proper definition of the business issues, development of rational and productive solutions to said issues, and deployment of same using the tools at hand.   No machine. No disk.  Just people solving problems.

I’ve been thinking a lot about this lately so expect alot more on it here.

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