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VARs vs. the app stores

Why channel partners need to prove they offer more than an app store

Back in the late 1990s, when so many vendors were considering a hybrid channel strategy, there was one competitive threat more frightening to resellers than any direct sales model: the rise of e-commerce.

In the end, of course, the Amazons and eBays of the world were mostly disruptive in the consumer IT marketplace, as well as the smallest of small businesses. Resellers quickly adapted and in some cases set up online storefronts of their own, or at least some half-decent Web sites to make enquiries or place orders. Now, however, the e-commerce threat has taken on a much more concrete form, even if most VARs aren’t playing very close attention to it: the app stores.

Although a lot of the attention around app stores is mostly centered around games and simple personal software programs, there’s little doubt that businesses will eventually tap into them as a procurement source. The elements are all falling into place. There are store owners, like Podio, a San Francisco-based firm which claims to have created the first business app store and an app builder that can be used by people with no technical expertise. Podio’s platform lets them take recruiting, expenses and other business processes and turn them into apps for sale on its store. If there aren’t a lot of similar offerings available yet, there will be.

Then there are the new breed of devices, like Research in Motion‘s PlayBook tablet, which will be widely available this month. Unlike the iPad, which defies categorization based on user profile, RIM has been up front about the business-focused design of the PlayBook (like it’s smaller size, which can be accommodated by a CEO’s suit-jacket pocket). Such devices won’t take off without a strong selection of apps to use on them, and even if we don’t see a successful standalone business app stores, Apple, RIM and others will begin developing tools that filter through the vast collections at their disposal and guide corporate customers to what’s relevant.

This is the opportunity, in fact, that VARs may have overlooked.

Although software sales may not make up the bulk of their revenues in some cases, not many channel players are surviving on pushing boxes, either. Apps are often inexpensive, but they can be part of a complete solution. As solution providers, resellers need to demonstrate they are on top of what’s available and can become a trusted advisor on these smaller software programs the same way they might offer advice on implementing CRM or an ERP system.

App stores may be the long-awaited solution for those who, during that same period of the late 1990s, aspired to be what we called application service providers, or ASPs. The difference is that app stores aren’t restricted to business users (which means they have much broader reach across a company’s employee base) are relatively easy to use and inexpensive. How many resellers can say the same thing about the services they provide? As they mature for corporate customers, app stores are going to start looking and behaving a lot like online versions of helpful channel professionals. Which means channel professionals are going to have to prove they offer a lot more than an app store.