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.

As I surf the dozen or so industry sites that I frequent, I try to make a note of those items and issues that seem timely and relevant to our buyers and pros. Here are a few articles that caught my eye in the past week or so:

ChannelWeb.com points out that Forrester is now singing a sweeter tune about Vista adoption. This comes after Microsoft earlier characterized Forrester’s views on Vista as “schizophrenic” for stating that Redmond was having trouble getting business users to make the switch from XP. This debate is sure to be debated fiercely and publicly in the coming quarters, but Vista remains a potential hotbed for VARs and solution providers in winning upgrade projects.

MSPMentor.net has launched an index that tracks the stocks of 20 leading SaaS companies (that’s Software as a Service for the uninitiated). It’s a great idea for a still-emerging category, and a handy way to keep an eye on the many corners of the SaaS world.

ChannelInsider.com offers a list of top 10 “don’ts” for solution providers who are making managed services part of their growth plans.

What are you reading these days? Drop a comment and spread the word about where you go for your industry news and pearls of wisdom.

These are tough times. You’d be hardpressed to find someone in the channel who disagrees. IT firms of all sizes — from large VARs to small solution providers to individual pros — face a steady stream of new challenges. We hear these stories from all sides, so when I come across articles I think can help, I make a point of sharing them with our community. Here are three that caught my attention recently:

Six Money Mistakes Most Solution Providers Make, from ChannelInsider.com: This is a hot topic for many IT service firms and professionals. There are mountains SMB studies that point to money management as the top reason that small businesses fail (not just their income statment, but their cash flow). Make sure you’re avoiding these six common financial pitfalls so you can survive today and thrive tomorrow.

In Search Of The Holy Grail Of IT Services, from StreetSmartVAR. This piece addresses the desire of all IT companies to transition from ‘vendor’ to becoming a client’s trusted advisor. And before you say, “my clients already view me as a partner”, check out the how-to questions to help you determine where you really stand with your customers, and how you can win their trust and loyalty.

How Successful Entrepreneurs Delegate Their Work, over at TheVARGuy. This piece, written by Mitch York from e2ecoaching.com, highlights a challenge that many entrepreneurs face: when to delegate vs. when to do it yourself, and how to tell the difference between the two. For any entrepreneur who intends to grow, this is a crucial issue. After all, there’s only one of you, and growth requires scale. See how you can strike this balance and prosper.

What other sites or sources can help manage your IT business effectively? Drop me a comment and spread the good word.