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Anthony Miley, Groupware Vice-President of Strategic Operations
Volume 1, 2007

We sometimes come across prospective customers who say they'd rather deal directly with a manufacturer than with a reseller/integrator. Sometimes, we're inaccurately labeled mere "middlemen" who do little more than add to the price of a product.

I thought of these not so complementary assessments as I read an essay by former Reagan Administration national intelligence official, Herbert Meyer.

In the piece, Meyer said American business is in the middle of a "fundamental restructuring" and specialization is at the core of this movement.

He starts with a fundamental (and obvious) claim: that a company cannot succeed if it can't create the highest-quality product at the lowest cost. While that point is self-evident, Meyer observes that the resulting effect is that cost and efficiency concerns are forcing companies to outsource the manufacture of components they once made themselves.  Many "name brand" technology companies simply add their name and logo to the front of a product that was designed and manufactured by a third party.  In turn, these third-party companies specialize in making one or a handful of parts of the product and outsource other components and raw materials to fourth- and fifth-party suppliers.

"This is called a fracturing of business," according to Meyer. "When one company can make a better product by relying on others to perform functions the business used to do itself, it creates a complex pyramid of companies that serve and support each other."

Meyer's essay got me to thinking about our world of technology manufacture and sales. As is the case with most manufacturers, the ones we partner with at Groupware outsource much of their equipment manufacturing.

I think the same factors that drive outsourcing of manufacturing—cost and efficiency—hold true for the sales and distribution of IT products. In a sense, resellers/integrators are outsourced specialists whose functions are as integral to the vendor's business as are the microchip fabricators in China.

A big manufacturer could, if it chose, hire an army of sales representatives and do away with their sales channel partners. But there are a number of reasons this model fails and many of them are the same reasons centralization fails in manufacturing.

Companies like Groupware are essentially an "outsourced" sales force that adds value because we cost less and are more efficient for manufacturers. We are sales specialists helping the manufacturer build and maintain tighter relations with, and better serve, its customers.

More importantly, our customers use Groupware as an extension of their engineering and IT staff so they can focus on what they do best. Instead of hiring a group of IT experts and adding them to their payroll and benefits plans, they leverage our knowledgeable and trusted resources to help lower costs and increase efficiencies.  

Groupware’s ability to understand and play a role in this new "fractured" businesses environment is what sets it apart from our competitors.  Our manufacturing partners—and our customers—find a great deal of value in what we do.  How do I know?  Customers continue to buy from us and manufacturers continue to sell through us. 

So, to some we may be "middlemen" who add to the cost of a project. But to those who know how to leverage our strengths, we provide a critical competitive advantage by lowering costs and increasing the operational efficiency of our customers and partners. 

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