Ensure Your Software Reseller Can Overcome Its Potential Conflict Of Interest
Yesterday I attended Computacenter’s Analyst Event. It’s a major independent provider of IT infrastructure services in Europe, ranging from reselling hardware and software to managing data centers and providing outsourced desktop management. My main interest was how it manages the potential conflict between properly advising the client and maximizing revenue from selling software. For instance, clients often ask me if it's dangerous to employ their value-added reseller (VAR) to advise them on license management in case the reseller tips off its vendors about a potential source of licence revenue.
An excellent customer case study at the event provided another example. A UK water company engaged Computacenter to implement a new desktop strategy involving 90% fully virtualized thin clients. Such a project creates major licensing challenges on both the desktop and server sides, because the software companies haven’t enhanced their models to properly cope with this scenario. The VAR’s dilemma is whether to design a solution that will be cheapest for the customer or one that will be most lucrative for itself.
As we said in our recent report “Refresher Course: Hiring VARs,” sourcing managers should decide whether they want their VARs to provide design and integration services like these or merely process orders at a minimum margin.
Computacenter will do either, but they clearly want to do more of the VA part and less (proportionately) of the R. So, according to their executives, they have no hesitation doing what is best for the customer even if it reduces their commission in the short term. But they didn’t think many of their competitors would take the same view.
Bottom line: Software licensing of virtual environments is so exceptionally complicated that all enterprises need expert, independent guidance. Your VAR may provide that; Forrester certainly will.
Footnote: we’ll cover changes to Microsoft’s licensing of desktop virtualization and the implications for companies in our upcoming workshop: Successfully Negotiating Your Microsoft Licensing Agreement on July 20, 2010 in Cambridge, Mass.