Just yesterday I received an email from a reader who questioned an opinion article from Matt Pillar, the editor in chief of Integrated Solutions for Retailers (ISMR). While ISMR is an end-user/retailer-focused publication, Pillar has recently been talking with VARs and integrators and doing some writing for Business Solutions. With his recent insight into the channel, Pillar wrote in ISMR that retailers interested in adopting a mobile POS strategy might not find an enthusiastic partner in their VARs, who aren’t eager to sell such low-margin solutions.
The reader wrote me:
We were a little taken aback by the statements about VARs not deploying POS solutions on mobile devices when we see it being done (at a growing rate & quite successfully with some of the largest retailers in the world) throughout the industry. It also seems contrary to your editorials about VARs getting in the mobile POS game and diversifying their businesses to support retailers’ mobile initiatives. Also, there’s the issue of incorporating consumer-grade devices into systems, a process being made much smoother with [POS hardware] companies providing SDKs to shorten or eliminate development time. Just wanted to get your thoughts, as this editorial seemed to negate the efforts of so many VARs & ISVs out there who are embracing mobile POS.”
Here was my response:
While you might be seeing mobile solutions being done at a growing rate and successfully with some of the largest retailers in the world, those retailers most likely didn’t use the typical POS VAR who reads Business Solutions or who you’d see at RetailNOW. I’d wager that many of those retailers have their own IT departments who handled the rollout or worked hand-in-hand with the developer or the hardware manufacturer directly (something most cannot claim to do).
The reason I’m writing about it so much is because I don’t think the typical VAR *is* selling these solutions. I do think it’s a great opportunity. However, I think most VARs don’t know what to do with the opportunity and challenges. If I were a VAR and my mom-and-pop customers were asking me about a mobile solution on an iPad, I’m not sure how I would respond. How can a small VAR make money off these sales? Zero hardware margins and maybe a couple software licenses for a mobile device. The best I can come up with is that — at the least — it gives you an opportunity to engage with your customer about its business challenges.
If I were to take a snapshot of the POS dealer channel, I’d see a (regrettably and) generally old crew planning their exit strategies and letting the new guard figure out how to make money off of the latest technologies. Quick aside, remember last year’s roundtable at RSPA RetailNOW when David Gosman was talking about mobile marketing (another great growth opportunity) and I stopped and asked the crowd if they knew what FourSquare was? Not many raised their hands. One year later, and I’d bet not many more have taken the time to learn. End digression.
For the large VARs lucky enough to work with the largest retailers, mobility is a huge opportunity. Rolling out thousands of mobile devices and printers to a retail chain is a project someone can make money off of. Unfortunately, most VARs aren’t that lucky. 67% of BSM’s audience has annual sales of less than $10M. 38% make less than $1M. To the majority of these guys, the SMB crowd, mobility isn’t a real opportunity at this point. Or, at least, a puzzle they’ve been able to effectively solve and take to the bank.
Everything above is concerning VARs. For software developers, the story is a little different. Every smart software company is scrambling to make mobile versions of its software. Hardware companies are wisely providing every tool possible to help bridge the gaps between the software, mobile device, and hardware. If those software companies have direct relationships with large retailers, I’d guess that the mobile revolution will be lucrative for them. However, if that software developer relies on VARs that target smaller retailers, I’ll again point to my above comments and say the money will be slow coming.
I guess I pretty much agree with what Matt wrote because he’s talking about the average VAR who I tend to write to, not those large ones on the cutting edge.”
So, what are your thoughts on this topic? Are you a smaller VAR having success and making money selling mobile solutions?