Channel starting to get services business, says MaintenanceNet 19 April, 2006 By Chris Talbot

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According to Scott Herron, CEO at MaintenanceNet, which makes products designed to help the channel offer software as a service, a recent distribution deal with Ingram Micro has mean an increase in the number of VARs the company deals with. Since MaintenanceNet started working with Ingram at the beginning of April, the company has signed up approximately 1,200 VARs for its channel partner portal.

"In the partners that we've been talking to over the last year, we've seen a huge paradigm shift," Herron said.

As hardware margins continue to get slimmer, the channel needs to take a much closer look at services and annuity-based revenue, he said. Partners already have existing customers for services; they just need to go back to customers they've sold hardware to and try to sell them services, he said. MaintenanceNet's products were developed to help partners build and keep track of their services businesses.

"At Ingram Micro, we provide essentially two pieces -- one, internally it gives them visibility to the performance of all of their channel partners and gives them information that allows them to help their channel partners to perform in contract maintenance and renewals," Herron said. Second, it relieves a bottleneck that exists in most distributors today, he added. Distributors often get a lot of information from vendors and they have difficulties disseminating that information to their resellers. MaintenanceNet's products make it easier to get that information out to resellers, he said.

According to Herron, more and more resellers are starting to invest in services, particularly in maintenance services, so it's clear they are seeing a huge value in the services business. Many large resellers are even hiring full-time maintenance coordinators, he added.

"With the release into the commercial market with Ingram, we've had a massive adoption rate of our technology," Herron said.

MaintenanceNet recently released a white paper from THINKstrategies that profiled the company and how its SaaS products help partners to generate greater service attach rates and increase the profitability of their services businesses. The white paper was commissioned by MaintenanceNet.

"It really goes to talk about in generalities why some of this opportunity is overlooked and why some of the partners aren't focused on it," Herron said.

He added, "The real high point of this is to bring awareness to the channel, that they essentially have diamonds in their rough."