Arrow Ups the Ante For Distributor Competition

Launches Effort to Help VARs Capture Sales in Lucrative Mid-sized Market Segment

Distributor Arrow Electronics has launched a new business group to help VARs and other channel partners extend their reach to mid-sized companies, which Arrow executives believe is the fastest-growing segment of the IT market.

The new group will focus on building multi-vendor solutions from various suppliers, including IBM, for VARs to provide to midsize businesses. Robert Spee, director of marketing for Arrow's midmarket group, said vertical markets targeted include health care, financial services, professional services, manufacturing, wholesale and retail.

The initial suite of solutions provided includes security, storage, virtualization, data management and collaboration, all technology areas that are hot spots for the channel right now. Arrow plans to supply data analytics to its VAR partners that identify potential customers and vertical solutions in specific geographic markets. The distributor will also provide training, marketing, and expert support to its channel partners.

"There are several midmarket challenges we want to address," explained Spee. "Often VARs are unable to supply a complete solution in this market because they lack the presence (with the customer). We will help them achieve the reach and the scalability."

Spee estimated there are potentially hundreds of thousands of mid-sized businesses as customers for IT services, with "tens of thousands" in the specific markets targeted.

The new strategic initiative helps blunt recent moved by rival distributors Tech Data and Ingram to become more active in the mid-size business space, defined as companies with between 100 and 5,000 employees. Arrow is making a commitment to spend resources to help VARs reach this market segment even before revenue from such an undertaking is generated. However, the mid-sized market, which usually involves more complex technology than the small-business segment, is becoming more important to channel partners. Mid-sized companies are also in the unenviable position of facing sophisticated IT issues and compliance requirements that are similar to enterprise companies, but with less financial resources to solve them. That creates the opportunity for channel partners to crack the market.

Arrow would not estimate how much it is investing in the new venture. Spee said it already has 40 solution sets, consisting of bundled hardware and software, being marketed through the new business group. The main hardware vendor is IBM, although this is expected to expand to others when a second phase of the program rolls out later.

Arrow believes it is filling a long-neglected need in the channel. "Serving the midmarket has challenged suppliers and VARs for years,” explained Kevin Gilroy, president of Arrow ECS, in a prepared statement. “We believe this new business model cracks the mid-market code, enabling suppliers and VARs to deliver their solutions to mid-market companies in a profitable, repeatable process.”

One Arrow reseller, Trish Way, praised the new effort for helping "with actual resources and programs that are targeted for our customer base." Way, vice president of sales and marketing for KgW & Company, said the new group provides a whole new level of support and resources.

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