Distributor Programs Help Resellers Chase Stimulus Money

June 23, 2009

A number of IT distributors, buoyed by sales figures pointing to a bottoming of the industry-wide downturn, have instituted programs to help channel partners track and secure billions in stimulus money under the federal government’s American Recovery and Reinvestment Act.

Westcon Group Inc., Tech Data Corp. and most recently Ingram Micro Inc. have outlined plans to help resellers monitor and position themselves to win competitive bids available under the stimulus package.

Last month, Westcon rolled out its New Start America initiative, designed specifically to help channel partners take advantage of stimulus package opportunities in unified communications, wireless networking, IT security, healthcare and the public sector.

Tech Data followed by unwrapping its Economic Stimulus Watch program to help resellers track ARRA spending as it becomes available this summer.

Now Ingram Micro has launched IMStimulus, a fee-based package of tools and services to help partners assess customer needs, screen requests-for-proposals (RFP), write grants and improve sales skills to win projects funded by stimulus money.

The three distributors were doubtless encouraged by a recent report from the Global Technology Distribution Council, an industry association whose members include heavyweights Arrow Electronics, Avnet, Bell Micro, D&H and Synnex—as well as Ingram, Tech Data and Westcon--generating an aggregated $100 billion in sales worldwide.

In the first of a series of quarterly studies on IT conditions in the U.S., the GTDC said that member sales performances suggested a leveling off of the industry slowdown in the U.S. market. The organization records actual sales data posted by affiliated distributors, although it does not disclose those figures publicly.

Matching users, partners and solutions

The goal of all three distributors’ stimulus ventures is to fast track channel partners toward revenue opportunities available under the ARRA, many of which are expected to surface this summer and further accelerate next year.

For example, Ingram’s IMStimulus package of services is intended to help channel partners maximize sales and service opportunities available through the ARRA, partly by promoting early access to proposals and using its extensive database to match users, channel partners and solutions.

“If you don’t do anything you’ll probably get your fair share of the stimulus dollars,” said Bob Laclede, Ingram vice president of business development. “But if you help your solution providers, they might get more than their fair share.”

Laclede, who was pulled from his position running Ingram’s government and education vertical to help channel partners track and secure stimulus dollars, said that the distributor has about 7,000 resellers operating in the public sector who could benefit from the program. He estimated that as many as 40 percent would participate.

He said that Ingram conducted internal research to determine how much of the estimated $80 billion in IT-related stimulus money it could contend for as funds become available under the ARRA.

“We drilled down to buckets of end users and technologies and figured out that we could sell somewhere between $2 billion and $5 billion in products and solutions that either we have on our line card or we have a solution provider who touches it,” Laclede said.

Ingram’s research indicated that about 60 percent of the stimulus dollars are made available through line item budgets such as infrastructure projects offered through federal government RFPs. The remainder is allotted as grants, in which federal agencies set up rules for awarding grant money and eligible applicants compete for the funding.

Laclede said that Ingram currently is targeting available funds in education, public safety and infrastructure, and expects to add healthcare, energy and broadband later on as money become accessible.

To assist channel partners under the IMStimulus program, Laclede said that Ingram will tap its “public sector RFP sources,” lead services to which the distributor subscribes that track impending RFPs. The distributor will also leverage its database of some three million end user transactions to “help our resellers chase opportunities in the federal, state, local and K- 12” sectors.

In addition, Ingram Micro has expanded its relationship with The Grants Office, a specialist in coaching VARs and end users on how to apply for grants.

“When the Grants Office gets involved early in the process, there is a great opportunity for the VAR to influence what the grants request is going to look like,” Laclede said. He noted that collaboration between the solution provider and end user to frame the solution ups the chances of winning a grant.

Ingram charges channel partners $2,500 to participate in the program. The distributor pays the Grants Office that amount “and then some” per partner for its services, Laclede said. For deals fulfilled through Ingram, the distributor will rebate up to the twice the program entry fee back to the partner.

“What we want at the end of the day is a purchase order for that solution to come back to Ingram,” Laclede said.

For its stimulus program, Westcon recently held a series of webinars with about 1,000 reseller attendees to help educate them on the ARRA, offering information on federal grants, market intelligence, project leads, white papers and archived webinars. It also opened up new web sites providing information to channel partners on the healthcare market and the public sector.

“Despite the unfavorable macroeconomic conditions resellers face, there are tremendous opportunities they can take advantage of in the public sector right now,” said Ronald Sheps, Westcon manager of vertical markets.

Tech Data tapped Barb Miller, its vice president of government, technical and integration services, to head its Economic Stimulus Watch program. The program, which is free to participating resellers, offers specialists in public sector sales, business development and bids to support channel partners pursuing IT spending opportunities in the government, healthcare and education markets.

The distributor’s program also provides a forum for partners to post questions and comments and communicate with Tech Data’s engineers and other specialists for bid and pricing support. Additional materials such as links to government procurement web sites, white papers, webinars and grant writing advice are offered.