Over at ChannelInsider, Kathleen Martin writes about how IT firms can sustain and even grow in the current economic climate. It’s a clear-headed summary of the role that services could and should play for VARs everywhere. Drop us a comment to let us know what you think makes for a successful services business.

If you’ve spent any time surfing CNBC or Fox Financial, you’ve heard phrases such as “tightening credit,” “extended recession” and, sadly, “deep depression.” Where does this leave your solution provider business? How will your business survive—and potentially thrive—in this down economy? In a word, “services.”

Services have always been an integral part of the solution provider business; it’s the “value-add” of the VAR moniker. Much has been written about how solution providers need to grow your services business, but precious little has been written about how to do it.

She includes a five-step plan for making services work (Note: I’ve edited for length):

1. Think About Customers’ Needs: End-user businesses are experiencing the same economic challenges as your business—controlling costs and creating new revenue opportunities. You can work with many vendors directly to drop-ship supplies to your customers and you make a nice fee for the service and the delivery.

2. Offer Contract Employee Services: Now is a great time to be selling specialized contract or project labor services. Companies will tell you their largest expense is tied up in employees and benefits. You can present your team of specialists for all of their IT needs and be sure you can show the savings contracted services deliver by the project versus a full-time person.

3. Web Site Development: If you offer Web site development services, do you also offer hosting? Consider partnering with a marketing services company if you are not offering creative and content services. Additional services offer you recurring revenue.

4. Get on a Monthly Cycle: Traditional reseller sales are one-time events. Services are a continual engagement that comes with recurring fees and charges. When delivering managed services, you can sign up your customers for everything from leased hardware to extended professional services. All of the hardware, software and services can be billed on a monthly schedule, allowing the customer to spread the cost of services over time and provide you with a recurring revenue stream.

5. Plan Growth; Add as Needed: Don’t expand your staff faster than you receive service contracts. Invest in training and systems to allow your current staff to make the jump to services and grow with you. You can use contract labor and partnership resources until you can afford to build your own capacity.

There appears to be no quick solution for ills plaguing the U.S. and global economies. Despite the financial troubles, businesses will still exist and they will need services to operate. For solution providers, service is a means for predictable revenue streams and having greater value to your clients.

Very well said, and further validation of using a contract workforce to make your services capability scale to match demand, and to ensure services profitability. What do the VARs, solution providers and pros out there think are the keys to a successful services business? Drop us a comment with your wisdom.

After a rollercoaster week on Wall Street (hey, rollercoasters are more fun than the free fall ride we’d been on), and a potential loosening of the credit markets, the media is once again talking about something other than economic doom and gloom. Here’re a few items that caught my attention. I’d love to hear opinions from the front lines. Agree? Disagree? Rant away by dropping me a note at trends@onforce.com or posting a comment with your opinions.

* Over at ChannelWeb, they’ve issued their 2008 Annual Report Card, which identifies the winners and losers in each category, including networking gear, VoIP, software and servers.

* The VAR Guy has a brief write-up on open source reporting tool Pentaho, which blipped on my overcrowded radar because OnForce has also adopted Pentaho as our in-house BI system. My take: flexible, powerful and cost-effective.

* The folks at Channel Insider have published a list of recession-proof categories that VARs and solution providers should focus on to grow profitably. Several of these jive with trends we’ll be sharing in our upcoming Q3 report, including POS and managed services, although I was surprised VoIP didn’t make the cut.

#10: Point of Sale (POS)
#9: Network Infrastructure
#8: Application Development
#7: Enterprise Applications
#6: Storage Solutions
#5: Business Intelligence Software
#4: Mobility Solutions
#3: Managed Services
#2: Software as a Service
#1: Security

Again, I want to hear from you — war stories, thoughts or whimsical rants are welcome. Did the pundits get these topics right? Drop us a line or post a comment with your opinions.

The sky is falling. At least that’s what the talking heads all seem to be saying.

No doubt, times are tough, and the channel is suffering as credit markets tighten and IT spending for consumers, SMBs and enterprises tighten. Companies are cutting back on capital expenditures and hiring, which means shrinking budgets for hardware and software alike.

As Al Senia from IT Channel Planet writes,

“IT companies are no longer able to compensate for the weakness in the U.S. market by seeking refuge overseas. National economies in the UK, Ireland, Germany and Spain are tanking. In Asia, slowdowns in growth are occurring in South Korea, China and Japan and stock markets have been decimated. The channel simply is not going to get any more “bounce” by playing the overseas card.

So overseas isn’t the answer, even for global IT firms. Maybe the answer’s here at home…

Things aren’t a whole lot better in this country, where consumers and businesses are watching credit evaporate. Without sufficient credit, there’s no capital investment, business expansion or hiring. “It’s a bleak picture,” Andy Golub, says ChangeWave Research. “There doesn’t seem to be any immediate catalyst on the near horizon that will lift spending.”

Ok, maybe not. Well, hardware and software sales can’t look that bleak…

In its August survey, ChangeWave reported 30 percent of enterprises cut their IT spending in the third quarter and 29 percent say they will cut it or stop it in the fourth quarter. Only about 12 percent say they will spend more than expected in those quarters. Couple these statistics with the credit crunch impacting small and medium businesses, and you can project just how bleak things suddenly appear.

Well IT Channel Planet is just full of sunshine, aren’t they?

The good news – and there is some – is that if channel partners can hold on through the current turbulence, there are likely to be smoother skies ahead. The financial sector is in an economic nosedive, but as thousands of IT (and other) workers get laid off, there’s going to be a skills shortage that the channel is going to have to fill. You can bet IT outsourcing will be on the rise.

Ah, there’s the rub. You have to survive the bad times to thrive in the good times. Wondering if your firm will weather the storm? Trying to figure out how to actually gain marketshare in a shrinking economy? Here’s a quick litmus test to identify who will win and who will lose:

* Those firms who contain costs, while keeping their promises to clients…
* Those firms who reduce fixed costs, while maximizing flexibility…
* Those firms who find ways to win new projects and fulfill them profitably…
* Those firms who take advantage of their competitors’ fumbles to win new clients…

These are the firms that will survive these tumultuous times and come out the other side of this dark tunnel. We’re seeing VARs, solution providers and IT firms of all shapes and sizes who are living this every day. They’re embracing a contract labor force to fulfill their IT services without spending on travel or the hiring and training of W2 technicians.

As you’re brainstorming about how to lean up your operations and fatten up your financials, I invite you to use OnForce the next time you need to find a contract service pro. We’re so confident you’ll have an exceptional experience that we’ll even pay for your 1st work order.

As longtime members of the OnForce community recall, we got our start as ComputerRepair.com. And since we changed our name to OnForce in December of ‘05, this URL has simply re-directed to the OnForce home page.

Well, after debating what to do with this domain, we’re happy to unveil the new ComputerRepair.com as a site for all things IT: news, advice, reviews and white papers. Our goal is to create a free and comprehensive view of the IT landscape, including the latest coverage and trends about computers, printers, networking, POS, VoIP and consumer electronics.

A few things worth mentioning about the mission of this new site:
Neutral: We’ll gather news and insights from industry thought leaders, regardless of their affiliations or allegiances.
Free: Like completely free… no subscriptions or costs; no sign-ups or registrations.
Community-driven: In the near future, we’ll be inviting members of the IT community to serve as contributors to the ongoing IT discussion. Stay tuned.
Serious: We’re working hard to bring you the latest news from trusted industry sources.
Not-so-serious: The purpose of the site is to inform and entertain. We’re having fun with it and shining a light into the corners of IT to find the surprising, the goofy and the simply baffling.

Check out our early efforts at ComputerRepair.com, and if you’re interested in becoming a contributor or have ideas, drop me a comment or hit us at backtalk@computerrepair.com.

Most of the media coverage of our Q2 State of the IT Services Industry report focused on the fact that service work in VoIP offers hourly rates that are more than double those in the Networking, Computer, Printer and Point of Sale (POS) categories. Check out SearchCIO, Phone Plus and TMC.net for their expert editorial coverage of this trend.

What didn’t get as much attention — but is even more important to VARs and solution providers — is that POS, VoIP and Consumer Electronics offered the greatest growth in Q2. This growth was attributed to the fact that there are more regional and national rollouts. As retail-oriented clients (stores, hotels, restaurants, healthcare, etc) adopt more IP-based technology into their operations, the growth in these categories is expected to continue.

So if revenue growth is on your list of “to-do” items, then rollouts and large-scale projects may hold the key. And as I look at the calendar, I see we’re right in the midst of the pre-holiday rollout season (typically from August to mid-November). But winning the contract is just the beginning. To manage and fulfill a large project profitably is no small feat, but help is available.

When we first noticed this trend in early 2007, we called several rollout-focused solution providers and industry experts and wrote a paper detailing their best practices for managing rollouts to maximize client satisfaction AND your profitablity. In reviewing this paper recently with a few IT service execs, I learned that these rules still hold true a year later.

So if you’re looking for a blueprint about how to effectively manage and fulfill your rollout or project, give it a read. Don’t have time for this kind of pleasure reading? Then check back here in the coming days, because we’re going to be breaking down these eight keys to managing a successful rollout.