Distributors are looking upstream to push packages of hosting software and professional services, a move that could commoditise some portions of the ASP market.
The strategy, if it works, will offer a major opportunity for margin-strapped distributors to pad out their bottom line. Vendors such as IBM and Compaq Computer for years have been offering discrete bundles of services directly to their partners. Selling them through distribution is a new wrinkle that marks the rapid maturation of a portion of the services market.
Arguably the most significant entrant into the field is Ingram Micro, which Monday will take the wraps off an ASP program it has been quietly developing for the past several months. The program initially will offer the services of three ASPs in distinctly different areas, but more negotiations are under way to throw other services into the pot.
The first rollouts will include services from Exenet, for management, storage, directory and database services; FutureLink, for Microsoft Exchange, Office and WorkForceIQ, as well as employee training; and Wizmo, which will offer a broad array of applications, file storage and help-desk services.
But the move also takes Ingram a step deeper into the partnering ecosystem, creating relationships with end users through service-level agreements as well as checking with customers to see if they're satisfied with the services that Ingram will be brokering.
Ingram will make its margins by linking the customer with the ASP, in addition to drawing on more traditional offerings such as financing to pay for those services. Solutions providers, meanwhile, either can resell the service like products, or they can choose not to take title to the services and collect an agent fee through Ingram.
"What we've done is create an easier solution for dealing with ASPs," says Guy Abramo, executive VP and chief strategy and information officer at Ingram. But he adds that there is an opportunity down the road for Ingram to mine its data and sell it to vendors looking to determine where, when and how their products are being sold, particularly in the small-business market. "Mining is the best weapon we have in a fragmented market," he notes.
The ASP program officially will kick off in the first half of next year to a limited group of Cisco Systems, Citrix and Sun Microsystems service providers, and then will be expanded from there.
"Our value proposition is penetrating the small and midsize business space," says Pamela Bryson, VP of business development at Ingram. "We also intend to provide leads to our VAR base and facilitate demand generation."
Ingram also plans to offer SAIC professional services for Cisco's IP telephony as a bundled offering. This isn't the first time Ingram has wrestled with selling bundled services as a SKU. The company attempted to build a practice for selling broadband services two years ago but scuttled the effort before it was announced officially, and abruptly fired all of the executives running it.
Nor is Ingram alone in its ASP endeavor. Arrow North American Computer Products has assembled a plan to sell Qwest Communications' hosting services, as well.
"The ink is barely dry on this one," says Mike Long, Arrow's president and COO. "What this does is give resellers ongoing revenues, almost like selling insurance."
But with widespread distribution of services, you also can expect that it's going to put pressure on ASPs to provide competitive pricing through as many partners as they can rustle up. Does this sound familiar?
