Field of dreams

They're showing rerun movies on United Airlines these days, supposedly in honor of World Series month. On my last trip, the so-called selection was Field of Dreams, which is appropriate for a different reason. It's roughly similar to the way many vendors—particularly start-ups—believe they should go to market.

Companies like Digital Equipment had the same concept years ago. Founder Ken Olsen believed that if you build it, they will come. The problem is, if you don't have a good stable of partners, they won't come in sufficient quantity to keep you alive for very long, unless you've got lots of VC funding. And even funding runs out after a while, which is what's afflicting Silicon Valley start-ups these days.

Many vendors learned over the years that if you build a channel, you have more feet on the street to sell your products. That worked for companies like Novell and Microsoft, creating industry giants and crushing the competition.

But the model has become far more complicated, as many solutions providers shift their own business models to make product sales a sideline rather than their primary sources of income. Increasingly, they're relying on a specialized set of services for their real profits, because no one can survive on product margins alone without selling in huge volume.

But rather than trying to understand the seismic shifts that are under way in the supply chain, many vendors—particularly inexperienced start-ups—still see their future in selling via resellers. What they should be doing is figuring out how products get to market and identifying the key influence points—a business partner that understands an end user's business needs.

The most significant shift in the business world today is that users want solutions to their business problems, not to their technology problems. That's the real influence point, and whoever is called upon to solve the business problem owns the account. That means the problem solver also has a strong say in which technology gets used, which business processes get outsourced and which other partners get thrown into the mix.

That is what e-business is all about: figuring out core competencies and selecting a host of partners for everything else. Every corporation in America needs to do that exercise, and they all need help in getting there.

Having problems with your vendors? Send them a copy of this column. And tell them they'd better read it now, or else they're going to end up having plenty of time to read it at their leisure. The success of this industry depends heavily on competition and growth. Ignorance and old business models are the fastest way to undo that.