IT and Business Insights for SMB Solution Providers

Channel Perspective—The Last 30 Years and Where We Go Now

ASCII Insight: Experience and expertise will assure the continued success of the solution provider and integrator in the new world of the Internet of Things. By Alan Weinberger

1984 was a pivotal year for our industry: Dell and Cisco were both founded, Intel introduced advanced microprocessors, IBM launched the PC-AT with a 20MB hard drive, and Apple launched the Macintosh. 

I founded The ASCII Group in 1984 along with 40 computer “dealers” on a revolutionary concept—let independent computer dealers stay independent … but learn together, and leverage their buying power and common business interests. Since they made the sale to the end user, it rightfully should be their customer, and not that of a “middleman” franchisor, distributor, or a participant in the final solution, the vendor. At that time, only by joining a franchisor such as Computerland, MicroAge, Entre, and others could a dealer get volume purchase agreements or even be authorized to sell Apple or IBM. Independent dealers were not permitted to sell such products or purchase key products from distributors that they were not authorized to sell. Most odious of all, they would have to give up their name and use the name of a franchisor in addition to paying large royalties. 

I saw the expertise of our members in the value chain of creation and why end users would pay for their solutions. Who adds the most value when one has a personal health issue? A medical doctor who has expertise and experience. The same can be said for today’s IT experts, solution providers, and integrators who handle issues for individuals and businesses.  

What We Have Learned

Over the years ASCII has taken many positions in the industry (some very public), but the common denominator has always been to advocate and evangelize the common interests of the channel and independent solution provider and integrator. Now we are in 2015, and what have we learned in 30 years? Where is the channel going and how will the dramatic, fast-moving changes in technology affect our members in the next five or 10 years?

Most of the last 30 years could be called the “PC revolution,” but starting at the turn of the century the “Internet revolution” is a more apt description of the driver of change. Now we are at the “Internet of Things revolution,” which can be seen as an extension of this second revolution. Many have called the internet revolution an enabler to “make the world flat.” This means, instantaneously, that everyone and everything becomes connected in real time and has a dramatic effect on intermediaries in the value chain. Commerce and value creation become more transparent. Unless you add value to the chain, like solution providers do, you will be cut out of this world order. When you look at the other links in the value chain, only the strongest survive, whereas with solution providers they not only survive, they are thriving.   

The proof of that conclusion is that all of the franchisors and most of the large “box pushers” and discount chains of the last 30 years are gone—out of business. Even iconic brands today, like Radio Shack, may not survive. They either did not have the expertise to add value or were tied into intermediaries that did not add to their value. It is our mandate to educate the world of end users on just how important solution providers and integrators are to their businesses.   

Power of the Group

When ASCII started 30 years ago, almost all of our members made their profits and sales from hardware and box software and very little service revenue. Today, most of the profit our members make is in service sales and consulting, not in the margin on products. This is why our member forum (ASCII-Link) is one of the best ways possible for experts to learn, be trained, and share information to solve problems that arise as a group.

The concept of “outsourcing” services by business was not mainstream in the 1980s, but it since has grown and grown, so now even strategic activities such as IT in business can be fully outsourced to solution providers, beyond just providing printers or PCs. The years have affirmed the growing role of the trusted adviser, the solution provider that offers a full panoply of outsourced services. And, with the existence of myriad apps, operating platforms, software, bandwidth, and many other variables that are hallmarks of the 21st century, solution providers will be the only entity capable of providing the local expert analysis and support that is needed. 

All of our members, whether large or small, have similar interests that allow them to become partners with each other and with others in the entire value chain. While the technology and industry as a whole is changing rapidly, our common interests as institutionalized in our organization will continue to add value to the industry for many years to come. We look forward to seeing the continued success of the solution provider over the next 30 years. 

Alan Weinberger is chairman and CEO of The ASCII Group

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