Arrow Finds VARs Need Help Tapping Midmarket Opportunity

Distributor survey discovers that VARs need to leverage support to better understand and serve IT executives' needs. Information security and data management viewed as important areas.

September 5, 2008

D.H. Kass

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Solution providers selling to mid-sized companies must improve their services, solutions and technical knowledge to fully access the market opportunity, according to a recent study sponsored by the Midmarket Group of Arrow Enterprise Computing Solutions, a division of Englewood, CO-based distributor Arrow Electronics.

The study, conducted by New York-based Echo Research, was aimed at IT executives of companies with between 500 and 3,000 employees posting $100 million to $1 billion in annual sales. Of considerable importance to solution providers, 70 percent of the mid-market IT executives in the study said their technology consultants performed to their expectations, but only 10 percent said that their solution providers exceeded expectations.

The results point to the “opportunity for VARs to leverage support to help them be better equipped to serve the midmarket,” said Robert Spee, Arrow ECS director of marketing. “If there’s a gap in performance, VARs can fill it and be more competitive."

Midmarket IT executives said that information security was the top business issue impacting their future business success, followed by reducing costs and improving customer service. Data management is chief among IT initiatives under consideration by midmarket companies in the next 18 months, followed by security and server virtualization.

Of note, less than one-third of the midmarket executives said they were satisfied with how their companies addressed issues of information security, thereby outlining a significant opportunity for VARs to address. Similarly, only 20 percent of IT executives in the study said they were satisfied with the way their companies handled reducing costs and improving customer service.

“The survey validated what we believed all along—that even in an economic downturn the midmarket is a huge area of growth,” Spee said. “Solution providers can increase their role by providing the right solutions and the right technical knowledge. VARs can become trusted advisors to the midmarket but they must be more aware of a company’s business to be of value to them.”

More than 60 percent of midmarket companies in the study plan to increase IT spending in the next year with only 10 percent expecting cutbacks. “Midmarket companies have Fortune 500 needs but not the resources to meet their needs,” Spee said. “They’re at a disadvantage for lack of resources. If they had access to the same resources, such as qualified VARs, they could level the playing field.”

The study is part of Arrow ECS’ MPower midmarket program, launched by the distributor last March. About 100 VARs currently belong to the program, which provides training, sales and marketing tools, demand generation, market intelligence, and product and service solutions for channel partners to address midmarket verticals such as healthcare, manufacturing, financial services, professional services and wholesale/distribution.

TAGS: services,server,virtualization,distributors,Arrow Electronics

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