Westcon is latest distributor to bulk up services

Westcon CEO Dolph Westerbos

Westcon CEO Dolph Westerbos

Westcon Group, the New York-based distributor of networking, security and storage hardware products, is joining other distributors in bulking up its professional services capabilities available to support its solution providers by buying Intact Integrated Services.

Through Intact, Westcon gets a bench of professional services capabilities in project management, managed services, and technical support for information and communications technology. Intact also comes with significant capabilities in the Cisco product family.

Intact’s assets and resources will become the centerpiece of Westcon’s Global Services Solution Practice, which supports solution providers with professional services in security, unified communications, data center development and cloud computing.

“Each of our Practices is designed to help partners benefit from the deep technology expertise and real-world business solutions we bring to the table –reflecting how Westcon provides greater value-add than any other distributor in the market today,” said Westcon CEO Dolph Westerbos.  “As a leader in channel services, Intact will become strong foundation in our Services Practice, helping partners generate new revenue streams via value-added services.”

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The deal is more a consolidation of assets by the two company’s mutual corporate parent, Datatec. By merging the two companies together, Datatec is infusing Westcon with significant capabilities around the Cisco product portfolio sold and supported by channel partners in the Americas, Europe and Asia. Intact’s specialty is providing fully lifecycle management – assessments to deployment to ongoing maintenance – of the Cisco unified communications and networking products.

“With strong experience in the networking, security, data center and cloud space — and one of the deepest global footprints — Westcon is the perfect match to take our leadership even further,” said Intact CEO Alan Rosser.

Westcon’s step in bolstering professional services available to the channel follows the strategy plied by other distributors. Arguably, Avnet leads the distribution segment in professional services, having acquired several IBM, Hewlett-Packard and Cisco technology specialists in recent years. Ingram Micro continues to build out its professional services capabilities, making its own as well as the resources of participating solution providers available to the channel. And other distributors, including Tech Data and Synnex, have similar programs.

Some view distributors acquiring solution providers as a competitive threat. Distributors say they’re addressing several issues that hinder solution provider growth and potential. As product margins decrease, solution providers are increasingly reliant on professional services for their profitability. However, the channel struggles with the cost of supporting professional services organizations, the lack of talent in the market, and the difficulty in capacity planning.

A study conducted by The 2112 Group and Ingram Micro found that the majority of solution providers with professional services are operating at 70 percent capacity utilization or higher, leaving little room for taking on new work or expanding business. Moreover, solution providers tend to focus on rudimentary technical tasks with decreasing value because they can’t staff their professional services with qualified people.

By having professional services available for on-demand or contract use, distributors say they’re helping solution providers address their customer needs and capitalize on sales opportunities without the management or expense burden.

In theory, distribution supporting solution providers with professional services makes a lot of sense, but the channel isn’t necessarily buying into it. The 2112 professional services study found the vast majority of solution providers would rather live with limited professional services capabilities and capacity. They fear that bringing in distributor or third-party providers will diminish their perceived value to the customer.

This article originally appeared on Channelnomics.com.