Any VAR not offering genuine added value is going to be left out in the cold. A “SKU” VAR, a company that expects to take orders with the minimum of fuss, are going to have a problem. But then, that’s the way commercial software like What’s Up Gold and Solar Winds Orion is going anyway. The internet is disintermediating the relationship from producer to customer pretty well everywhere especially in the close to zero friction world of software.
With open source software I suspect the effect of disintermediation will be felt most strongly. One of the most attractive aspects of open source is the community ecosystem. The last thing a potential open source adopter wants is to be cut off from the community. The direct relationship between user and producer is one of the main benefits of open source.
So how can a VAR get in on the action?
- Create your own project by forking one or more existing projects. You effectively become the creator of the tool so you have the relationship with the user; OR
- Morph into a consultant for existing projects. The only hope any VAR has of getting in on the act is through expertise by providing training and implementation help; AND/OR
- Supply hardware appliances powered by open source tools.
The nature of open source means that the source code is available to everybody. Why can’t a VAR create their own fork and create service offerings around it? There are two reasons why this approach is unlikely to succeed:
- The project’s name is likely to be trademarked. So, when a fork is made it cannot be named after the original project. Consequently whatever community revolves around the original project isn’t going to follow you. You will therefore have the long and painful process of building your community from scratch. The desired revenues from consultancy services and training are likely to be long in coming;
- Not too many VARs have the necessary skills or resources to successfully fork a project and continually keep the project up to date. Your developers are unlikely to be maintainers of the forked project so you will need to continually merge mainline project changes into your code base.
New wave nirvana?
The main problem with VARs morphing into open source consultants is that the project company may wish to keep all of that nice lucrative training and consultancy to themselves.
After all, most of the revenue garnered from “big 4” (HP Openview, IBM Tivoli, CA Unicenter, BMC Patrol) sales come from training and consultancy services not from license sales.
The new wave open source network & systems management companies are all venture funded. Somewhere in their respective business plans I’m sure training and consultancy feature very highly in their monetisation strategies. Indeed the new wave deliberately sacrifice some of the lucrative “big 4” software license sales in order to get hold of the training and consultancy business. I doubt they are going to be too enthusiastic cutting other people in on the deal.
Older is better?
Nagios has a list of approved solution providers who purchase 3rd line support from Nagios Enterprises. The customer knows the solution provider is approved by the Nagios project and is likely to be locally based, the solution provider gets direct support from the project founders and the project itself is able to control the quality of the solution provider and gain income from support contracts from them.
Growing an organic support infrastructure is a clever move by Nagios. Setting up a worldwide support infrastructure is expensive. Nagios are able to leverage their website and trademarked brand in order to build an eco-system to deliver services and training worldwide.
Can’t sell the software…
If you can’t sell the software and you can’t provide training & implementation services what are you supposed to do? One solution is to sell hardware appliances based upon open source tools.
Hardware appliances hold the easiest route for VARs into the world of open source. In fact a hardware appliance based upon open source tools is no different than a proprietary appliance so far as the VAR is concerned.
Network & systems management is an area in which open source solutions have traditionally gained a lot of traction. Network management suits open source perfectly. The influx of venture capital into the existing open source ecosystem is only going to accelerate open source adoption.
So what’s a VAR to do? Open source is accelerating the death of resellers who fail to add value. So long as your people are able to add value to the customer then open source may well open up a huge opportunity for you. Instead of being tied to a single vendor’s offering you will be able to mix and match from a huge range of open source solutions.