The look of shock and surprise on people’s faces when Rick Reid, the president of Tech Data Canada, announced that there would be a new No. 1 solution provider in Canada, based on the CDN Top 100 rankings was obvious.
When Reid announced that Softchoice was the No. 2 revenue producing solution provider in Canada most of the crowd seemed to be wondering what happened. The channel views Softchoice as a Canadian juggernaut. They did claim eight out of the last nine top spots on the CDN Top 100 Solution Providers list. This included a stretch of seven consecutive victories
However, Softchoice is changing dramatically in front of our eyes. First of all they worked very hard to become a private company. They also invested heavily in a managed services offerings. Managed Services isn’t transaction heavy, but it is profitably.
And, a lot of solution providers who are on the Top 100 list are doing the same thing. They are forgoing transactional-based business for the cloud or in a managed service of some kind. Several solution provider owners have told me that they happily provide contacts to CDW and other direct market resellers such as Insight Canada and SHI Canada if their customers balk at hardware prices.
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I think this led to CDW Canada‘s growth last year. They were the only company to range from $475 million to $500 million in revenue.
Many other solution providers who are on the CDN Top 100 Solution Providers list have embraced a new go to market strategy that will lessen its dependence on transactional revenue and devote more of their time to high profit margin solution selling and consulting.
And, if you consider the statements made by Bruce Stuart of ChannelCorp made during his keynote presentation at the CDN Top 100 about Adobe it will resonate more.
Stuart told a packed house the CDN Top 100 show about Adobe reporting five consecutive quarters of negative revenue growth, but their stock price has gone up 17 per cent. Why? It’s because Adobe is becoming more profitable with its software-as-a-service business model.
One quick hit before I go. Today is Jeff Jedras’ last day as a full-time member of the CDN staff. Don’t be too sad, as Jeff is not leaving us entirely. He will be doing some in depth feature reporting for the magazine as he pursues his dream in politics. It has been an absolute pleasure to work with such a great professional as Jeff and CDN wishes him the very best.
Adobe stock price is actually up 63% over the last 12 months as it moves to an all-in cloud strategy. Stay tuned to our CDN series on business model transition and take a look at LivePlan.
Bruce Stuart
President
Channelcorp