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ROLLOUTS: THE PROFIT SWEET SPOT FOR SOLUTION PROVIDERS
John Keenan, Senior Vice President at Network Dynamics, points to IP telephony, network security and wireless.
George Harris, owner of GA Services, says that, given rapid technology advances, the market has cycled to a point at which corporate technology refreshes are on the upswing. Ron Silliman, Gartner’s Principal Analyst for Infrastructure Support Services, adds that Microsoft’s long-awaited launch of Windows Vista® will slowly but surely prompt enterprises to implement deferred technology refreshes — a trend that will grow in intensity through 2007 and really gain momentum in 2008.***
Mainstream adoption of new technologies. Cyclical technology refreshes. The Vista factor. For these and many other reasons, the usual steady stream of large-scale technology rollouts is surging — and promises to unleash a torrent of opportunity for solution providers in the coming years.
This white paper demonstrates how rollouts are creating strong sales opportunities for solution providers of all sizes. Importantly, it also addresses how solution providers have finally “cracked the code” of transforming this high-volume business, which is extremely service intensive, into a high-profit business via innovative on-site service delivery models.
WHY ROLLOUTS? WHY NOW?
Laura Blackmer, Senior Vice President of Sales for OnForce, echoes the points of view of John Keenan and George Harris.
“Rollout business has been around for a long time,” Blackmer states, “but many solution providers haven’t been equipped to capitalize on it. Now, whether they’re being pushed by POS system upgrades, Vista, VoIP or security, there are more opportunities in rollout work.” As Executive Editor of Business Solutions, Brian Sherman has his finger on the pulse of industry trends.
“What I hear from VARs is that there is a lot of activity installing Network Operations Centers, as well as in the areas of network security and VPN management,” Sherman comments. “POS is another hotbed with lots of implementations and a great deal of growth being driven by WIPOS — Windows-based POS — which is being rolled out to replace the old, Y2K-era systems. Compliance mandates are yet another driver — for example, the PCI compliance standards for data protection in retail.”
Gartner’s Silliman adds, “Y2K created a phenomenon worth noting. Y2K caused a very large buying cycle in 1999 and into 2000. Our data indicates that the average technology refresh cycle is about 3 to 4 years for most enterprises. And, in fact, we saw significant purchase/rollout activity in 2003-2004 — 3 to 4 years after the Y2K-driven buying spree.” Silliman contends that the second major post-Y2K buying cycle is upon us. His belief, though, is that because of slow-building Vista adoption, the cycle will be extended into 2009-2010. There are other factors at play. In George Harris’ view, “More customers today roll out technology implementations on a regional or even national basis. We do a lot of work with retailers who are all over the map — literally.”
Harris’ point is echoed by many: Today’s increasingly distributed organizations — whether retailers with hundreds of locations, or enterprises with thousands of teleworkers or hundreds of branch offices — are a big part of the impetus behind more and bigger IT rollouts. Market and technology trends aside, the impetus behind the growth in rollout opportunities is that the game has changed. Blackmer states, “Rollouts are no longer the sole domain of very large integrators and solution providers with the management and financial resources to employ and deploy large field forces — or to quickly ‘construct’ service capabilities via multiple subcontractors. Today, every solution provider can play and profit because new on-site service models have leveled the playing field."
SPEED BUMPS ON THE ROAD TO ROLLOUTS
Clearly, rollout business is big business for solution providers ready to seize the moment. Yet there are challenges to fully take advantage of the opportunity. Peter Cannone, President & CEO of OnForce, articulates the first of two challenges that have historically prevented solution providers from optimizing rollouts as a source of revenue and margin.
“Most rollouts, by nature, involve multiple locations regionally or nationally. This type of work is highly service intensive. A solution provider needs feet-on-the-street — qualified technicians in many places, working against tight deadlines. Aggregating these service providers — the right providers in all the right places at the right time and price — has been very difficult,” Cannone asserts.
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