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09.27.06
Europe: VARs Win With Software, Services
 By David A. Utter
Solution VARs in Europe have found a bounty of over $22 billion in sales last year through services and software.
Once upon a time, software used to be something to be purchased shrinkwrapped from value-added resellers, and many times the purchase coincided with a hardware purchase of substantial margins.
Fast forward to the 21st Century. On the VAR side, those that have shifted to focus on solutions and not hardware are seeing the growth.
Tekrati reported how IT Europa's research of the top growing VARs has found the solution side enjoying an average growth rate of nearly 12 percent.
"Solution VARs are showing the way for the channel model of the future, with 67 percent of their staff involved in support services, software development, and solution delivery," Alan Norman, Managing Director of IT Europa, said in the report.
IT Europa also found that consulting and project management have commanded much better revenues than the typical support and service contracts.
Businesses have a greater need for implementation and development of better and newer business processes than for hardware-related services.
That may be due to on-site personnel being able to support such hardware instead of paying someone else to be the on-call service department.
The ability to make a legacy system into a more productive, cost effective process can profit a firm well beyond the fees it would pay the VAR for solutions.
Tekrati noted the solution VARs in the IT Europa report generate 54% of their income from the SME sector, (with 50 to 1000 employees) and 27% from the Enterprise sector (1000+).
The biggest gainers proved to be in Russia and Turkey. Both countries demonstrated about 50 percent growth. The U.K. likewise had an impressive average growth rate, which IT Europa pegged at 15.4 percent.
About the Author:
David Utter is a staff writer for WebProNews covering technology and business.
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