Credibility, reliability, quality of service,
professionalism: the Retail Solution Providers'
Association was looking for a way to promote VARs
offering these characteristics when it announced its
RSPA certification program earlier this year. A core
goal is to help end users distinguish fully qualified
VARs from the casual dabblers or the
install-it-and-disappear types -- an issue retail VARs
share with those in other vertical markets.
with good reason. According to our 5th Annual End User
Survey, VARs have made some progress in enhancing their
reputation among their customers, such as becoming
better communicators. But there are still those out
there earning the industry some black eyes, including
failing to fully deliver on their promises.
Responses to the survey were generated through
readers of VSR's sister publications, RIS News,
Hospitality Technology and Consumer Goods Technology.
These VAR customers had a lot to say about how they use
VARs, what they like, and most important, how VARs can
win their respect and their business.
The Ratings Are In
do end users rate their VARs? End users continue to give
IT resellers the highest ratings for their general
technical knowledge, with 76% describing these skills as
"good" or "excellent." Ratings are nearly as high for
VARs' ability to understand the needs of their
customers' businesses. This year, VARs most improved in
their ability to communicate; earning a 10-point rise in
excellent ratings, to 28%, with another 43% calling
VARs' ability to communicate as "good."
"It is important for us that resellers are very
clear in communication and speak in layman's terms to
that we understand the full capacity of new hardware and
software," one respondent commented.
More good news
came in VARs' business process engineering services;
this year 65% rated VARs' skills in this area as
excellent or good, compared with 44% last year. The
strengths of VARs' relationships with manufacturers
continue to earn end users' appreciation; 67% call these
excellent or good.
But here is where VARs part company: in the
following four areas, the number of end users calling
their VARs excellent or good is similar to ratings in
past years; each earns the excellent or good ratings of
60% to 65% of end users. The four are cost versus other
channels of supply, timely systems
delivery/installation, delivering on promises about
system capabilities and support after the sale. However,
they're also the four most likely to earn the largest
numbers of fair or poor ratings (others tended to get
higher numbers in don't know or not applicable). End
users are justifiably upset when VARs over-promise and
The area VARs were most likelyto be rated
"fair" or "poor" is a tie between cost versus other
channels of supply and delivering on promises about
system capabilities (26%), followed closely by timely
systems delivery/installation (24%). Respondent comments
include: "more honesty, knowledge up front on actual
capabilities/performance of software," and "don't
promise unless they can deliver; it wastes everyone's
time and money."
"Be open, honest, and don't tell e-marketing
stories," asks Jim Brown, owner of JnR Hotel in
Cedarville, Calif., whose newest install has faced
delays and gaps. "When they first told me the system,
they told me it could do anything."
It's just these sorts of bad habits that VARs
favoring certification programs are seeking to distance
themselves from; to earn customers' trust, it's
essential to know what your solution can and can't do,
price it correctly, and then deliver within realistic
timetables. Over-promising kills customer
Why End Users Seek Out VAR
End users' appreciation for
VARs' general technical knowledge is borne out in their
reasons for selecting VARs. IT resellers' variety of
skills (55%), specialized skills/knowledge (47%) and the
expertise that end users' lack in house lead the list of
reasons for seeking out their help.
New York City-based Sentinel Real Estate
Corporation, for example, didn't require a VAR's help
for a network appliance, but called in a VAR to help
with a virtualization, de-duplication and SAN project.
"This is where VARs have a leg up, in implementation and
support" says Emile Rashkovich, senior VP and CIO for
Sentinel. "We like a VAR that is stable, well-run,
priced right and whose services are good. I enjoy the
continuity of service, having the same people do the
implementation and support."
Resellers' ability to provide managed services
ranked near the bottom of the list with just 20% citing
this as a reason for IT selection, followed by a match
between the end user and reseller's geographic coverage
Track record/market expertise continues to
outstrip price as the most important factor end users
employ to choose an IT reseller. Price trails by a full
11 percentage points.
"Lower rates don't help them or us because
eventually they've got to pay their costs," says Rick
Dworaczyk, POS/IT director at 69-unit Bill Miller
Bar-B-Q, San Antonio, Texas. "As long as it's reasonable
or not the highest price in town."
Trailing these track record/market expertise
and price by a significant margin are an IT resellers'
relationship with software and hardware vendors (29% and
27%) and ability to collaborate with other resellers.
Most end users (63%) always or usually rely on IT
resellers to recommend hardware, and 61% do the same
End users were most likely to be working with
ISVs (55%), followed by consulting firms and system
integrators. Despite IT resellers' efforts to broaden
their services, each year they consistently report the
same top five services purchased from VARs as a part of
their most recent technology installations. Though the
order may vary from year to year, training, service and
support; systems installation; custom software
development; and systems design and technology
recommendations again lead the list.
IT is becoming more complex,
IT budgets are getting tighter; perhaps these are the
reasons end users are narrowing the number of IT
resellers they work with. The largest number of
respondents use just one (24%), followed by two and
three resellers; in 2008 half the respondents used two
or three resellers. The largest group (40%) reported no
planned changes to their IT reseller rosters, while 32%
are likely to work with the same number, but may replace
some. The largest group of end users (42%) describes
their reliance on resellers as about the same as three
to four years ago.
All this points to the need for
VARs to fulfill their role as trusted advisor; as the
sole outside counselor on IT issues, end users will be
even more reliant upon VARs to keep them up to date on
technology. Because technology is growing more complex
and diverse and therefore difficult to cover, alliances
with other resellers are another key strategy to
delivering diverse knowledge and skill sets through a
single customer interface point.
"I gave a big company the chance to sell us
customer premise equipment, but it was a big mistake,"
says Sentinel's Rashkovich. "It was a big mistake, they
didn't know what they were doing. It was very painful
dealing with them. Smaller is better with some
resellers; they're more responsive."
just 34% of respondents agree they expect more from
their VAR partner than five years ago. The increased
complexity of business and IT was the most popular
reason. "We expect better answers, more involvement with
business and other partners," one respondent commented.
The Bottom Line: How to
This year's ratings contain some
good news; VARs continue to earn raves for their
technical knowledge and communication skills show marked
improvement. End users continue to prioritize experience
over price, and seem to be narrowing their number of
VARs to fewer, close relationships.
But even the best-regarded VAR can improve.
When offered an open-ended opportunity to suggest ways
IT resellers can improve their overall value, increasing
their understanding of the markets they cover was the
most common comment. "Make sure they understand the
specific business the customer is engaged in -- not just
restaurant, but QSR, fine dining, fast casual, etc.,"
one respondent notes.
Communication was the next-most-requested
improvement. Among the comments: "Listen before
speaking," "more honesty," and "don't spout off about
stuff you are not expert about." Price ranked
Year after year, end users are clear in what
they really want from VARs: credibility, reliability,
quality of service and professionalism. IT resellers
meeting that challenge elevate the entire profession and
reap the requisite rewards.
What Happened to Managed
The long sell on Managed Services
continues. On paper, in makes a lot of sense,
particularly for SMBs, to rely on VARs to remotely
manage significant aspects of their IT. But as this
year's survey states, there is still great interest in
Managed Services, but the business model remains
The ability to provide Managed Services so end
users don't have to invest in infrastructure ranks down
at 7th place among reasons end users choose to work with
IT resellers. Application hosting such as software on
demand or software as a service was the least likely to
be a part of the end users' most recent IT reseller
engagement. Most interestingly, despite these low
numbers, 60% of end users have explored a managed
service option for their businesses. They're just not
pulling the trigger. When asked why not, respondents
were most likely to say managed services were too costly
or that they prefer the control that comes from handling
IT in house. Several felt MS was unnecessary for their
Sentinel Real Estate Corporation, for example, has
been approached with offers to manage its extensive wide
area network. While Sentinel uses MS for customer
relationship management, network management "is not
really all that hard to do." says Emile Rashkovich,
senior VP and CIO at the New York City-based company.
"It does not make business sense to pay a 50 percent
premium to deal with network issues."