2007 Alternative Vendors By Category

Data Networking: Two Teams Are Better Than One

Francis Poeta, president of Cliffside Park, N.J.-based P&M Computers, is a designated Cisco SMB partner. Yes, he does the vast majority of his business with Cisco and enjoys a good relationship with the networking behemoth. But that doesn't mean Cisco is always the right fit for a customer's data-networking needs.

"I think you need to have at least two vendors," Poeta says. "You have to be able to say to a customer, 'Here are the options.' It helps the customer understand that you're giving them the opportunity to choose."

Poeta's data-networking alternative of choice is Netgear, which he says provides high-quality technology at a good price point for smaller customers. "It offers excellent ROI for a lot of SMBs, and for clients in less complex networking environments," he adds.

For Poeta, the criteria for selecting an alternative vendor are feature sets and price points. "Most of our customers looking at second- and third-tier providers don't have any IT staff at all and not much complexity, but they need equipment that will stay up and running and not affect their operations," Poeta says.

This year's VARBusiness Alternatives Study points to price opportunity as the No. 1 reason solution providers consider selling an alternative vendor in the data-networking space, followed by product performance and innovative technology.

While Cisco is often referred to as the 800-pound gorilla of the data-networking world, there are some alternatives that VARs are using to deliver quality solutions to customers. In this year's survey, the top three were Netgear, D-Link and Belkin.

"It's about due diligence for our customers," Poeta says. "We can't just always drink the Kool-Aid and offer one vendor's products. We have to go out and look for better solutions. The enterprise is going to spend the money one way or another. But when you're dealing with SMBs, it's a completely different sell. Instead of buying a new car or house, you're saying, 'Give me the money and I'll do something that's going to increase your overall value down the line.' If you're not looking at different possibilities, you're not doing the best for your customer."

Marc Haynes, vice president of operations at Blairstown, N.J.-based PlanIT Networks, also plays heavily in the SMB data-networking space.

He says that Cisco usually won't give him the time of day given the size of his company, so he relies instead on Netgear and 3Com to satisfy his customers' needs. "The price points are much better than either Cisco's or HP's," he says. "And the products work just as well. Netgear has done a good job of providing switches and everything else."

Haynes says he has a good relationship with both Netgear and 3Com. As far as he's concerned, both are primary vendors--not alternatives--for him and his customers. "They have the right technology. And they manage their price points very well and stay very competitive," he says.

3Com, in particular, became more appealing to Haynes when PlanIT started delivering powered switches and technology to smaller companies. And he's always open to evaluating new and different vendor products for his portfolio.

"We have to take a good look to make sure the economics will work," Haynes says. "Sometimes there's a company out there that has great technology, but are they going to be there next year? Aside from the product, they have to have the ability to deliver in the long term."

--By Cristina McEachern

NEXT: Price rules server choices

Servers: Price Rules Choices

When it comes to recommending industry-standard servers, margin opportunity dictates partner preferences.

Just ask Michael Anderson, president of Glendale, Ill.-based Digital Services. He says that everyone goes by the benchmark of direct marketers, such as CDW, to determine what a server is worth.

"The customer has an expectation that we can sell them something at the CDW street or Web price," Anderson says. "Well, if we're doing that, we have to make sure there's enough margin. Some products just don't have any margin, so we don't sell them."

Still, in this year's VARBusiness Alternatives Study, margin opportunity ranked only fourth as a factor that compels solution providers to sell alternative servers. Only 40 percent say margin plays a major role, compared with the top criterion--price, which was cited by 60 percent. But when push comes to shove, even the slightest shift in pricing can mean the difference between a profitable server sale and a nonprofitable one, say Anderson and other solution providers.

What's more, there are quite a few server vendors today, although only a handful are major players.

In Anderson's case, Hewlett-Packard has stepped up to the plate in the past two years or so, with CEO Mark Hurd at the helm. Prior to that, Anderson's preferred supplier of PCs and servers was Equus Computer Systems, which sells custom boxes. These days, HP's server pricing offers room for margin, though Anderson says he's prepared to switch back if the situation should change.

"If I'm selling a white box, it's because HP's margin doesn't make sense at a particular time and place," he says.

Despite its status as a direct seller, Dell ranked as the single-most preferred server vendor by solution providers surveyed. More than 48 percent chose Dell, while 18 percent chose custom-system builders.

That figure, however, is somewhat distorted considering that those choosing "other" accounted for nearly 30 percent. One may presume that a good portion of those are custom-system builders. Add SuperMicro (cited by nearly 4 percent) and Intel (cited by about 9 percent) to the equation and one could easily argue that white boxes and second- and third-tier systems were the dominant server alternatives.

On the other hand, the fact that almost half of the survey respondents chose Dell is significant. It demonstrates the strong influence the vendor has on both customers and pricing. It also suggests that some solution providers are intent on recommending Dell servers to customers. Dell, after all, doesn't exactly have a viable ecosystem of channel partners.

Take Blue Hill Data Services, a Pearl River, N.Y.-based provider of off-site managed services and disaster recovery. While the company hosts IBM mainframes, it recommends Dell for commodity servers.

The customer can purchase a server directly from Dell and have it shipped to Blue Hill's data center, or Blue Hill will purchase it and then lease it back to the customer, says president and CEO Budge Huntoon.

As for his choice of Dell over HP and IBM, it all comes down to the top two criteria--price and product performance.

"We've found that Dell is about as reliable as there is out there, and their products are competitively priced," Huntoon says. "They're the standard by which everyone is judged."

--By Jeffrey Schwartz

NEXT: Wireless wiggle room

Wireless Networking: Plenty of Wiggle Room

Wireless networking is a market that's dominated by the big guys; there are three market leaders, and two of them are Cisco.

So while resellers may see the partnership opportunities as limited, the fact is, there's lots of wiggle room in the alternatives list, where a host of innovative players are vying for VARs' attention beyond the market-leading Cisco, Linksys and HP ProCurve. And while the standard trio of price, performance and innovation fuel their drive to new vendor alliances, wireless-networking resellers also give the nod to gear that can fill holes in their existing portfolios and generate leads to new clients.

Simply put, as big as the big boys are, they still can't be all things to all VARs.

Jarred Bell, proprietor of Whole Solutions in Fort Myers, Fla., says the pressure is constantly on to deliver the latest in hot technologies, which often means searching out nimbler, more innovative vendors.

"We spend a lot of time checking out what's out there...trying to always have the latest answer to whatever our clients will ask us--before they ask," Bell says. "That, and trying to keep the costs down, keeps us pretty busy in terms of reviewing and testing new options."

The plethora of choices is heating up an already hugely popular market segment for VARs. Some 65 percent of the 281 VARs responding to the 2007 VARBusiness Alternatives Study said they plan to resell wireless gear in the coming year.

Bell's wireless engagements focus largely on D-Link and Belkin, two notable names on VARBusiness' list of alternatives. D-Link tied with Netgear for the top spot among alternative wireless vendors, chosen by 35 percent of VARs responding. Belkin came in third, with 15 percent, followed by 3Com, with 11 percent, and Proxim, with 7 percent.

Not all solution providers are swayed by the promises of the alternative vendors, however.

"We're using ProCurve [and] very little of the others," says Bill Wakefield, sales manager at Logista Solutions in Bessemer, Ala. "We just prefer to use Cisco or ProCurve [and stick to] the tier-one vendors."

Others, like Alex Cone of CodeFab, are moving deep down the list of alternatives to fuel their wireless initiatives. Cone's business, in the heart of metropolitan New York, has, not surprisingly, made a progressive choice. "We use Apple AirPort products for our wireless networking exclusively," Cone says.

On the whole, the solution providers' choices for leaders and alternatives represent a significant departure from actual market-share numbers. According to analyst firm Synergy Research Group, Cisco led the WLAN market for 2006 in terms of share and revenue, followed by Symbol and Aruba. HP's ProCurve unit and 3Com were a distant fourth and fifth, respectively, although HP has been enjoying impressive growth.

Synergy's ranking of the SoHo WLAN market leaders more closely matched VARBusiness' alternatives results, however, with Linksys, Netgear, D-Link, Belkin and Buffalo taking the top five spots.

Noting the difference, Synergy senior analyst Aaron Vance says enterprise wireless networking sales are being driven by growth "across all WLAN infrastructure segments--most notably, wireless switches/controller and dependent APs."

"In the consumer segment, modest growth was driven by sales of 802.11g devices, as well as a growing mix of draft 802.11n devices and multimedia products," Vance says.

--By Chris Gonsalves

NEXT: Security software on parade

Security Software: VARs Focus On Performance

Check Point Software Technologies, Cisco Systems, McAfee and Symantec are the dominant players in the security-software industry. But a significant number of resellers have identified vendors they consider viable alternatives to the leading vendors, according to the 2007 VARBusiness Alternatives Study.

Nearly one-quarter of those surveyed consider Millburn, N.J.-based Grisoft and its AVG antivirus and Internet-security products to be a reasonable alternative to the "Big Four" vendors'. Having nearly as many fans is Trend Micro, cited by 23 percent of survey respondents; CA and Microsoft were mentioned by 17 percent and 11 percent, respectively, followed by such security-software developers as Panda Software, Zone Labs and Kaspersky Lab.

When asked why they sell an alternative security-software product over one with brand recognition, 56 percent of surveyed resellers cited product performance, while 53 percent said innovative technology was the attraction. The need to fill gaps in product portfolios was mentioned by 48 percent.

"There are a lot of good products out there, and you need to keep your eyes open for them," says Pete Venuta, vice president of business development and a co-founder of Information Security Technology (IST). The St. Paul, Minn.-based solution provider resells a wide variety of security software from Check Point and Cisco, and from smaller vendors such as Imperva, SPI Dynamics, Trend Micro and Websense.

While money is always important, price and margin were considered less important (cited by 41 percent and 31 percent of those surveyed, respectively) than product performance (56 percent) and other technology considerations. Even lower on the priority list were vendor support (30 percent) and better partner programs (24 percent). Business needs, such as staying ahead of competitors, gaining access to new clients and diversification, were also cited.

Most solution providers aren't worried that reselling security products from an alternative vendor will get them in hot water with their primary security-software supplier. Only 4 percent of survey respondents indicated they were afraid of such repercussions, while 96 percent were not. That's all the more surprising given that more than two-thirds of the surveyed VARs are small (with annual sales of less than $1 million) and, presumably, have less market clout.

Venuta says large vendors generally don't react when IST begins reselling a competing product from an alternative supplier. The solution provider, for example, resells Secure Computing's Sidewinder firewall software without any pushback from Check Point--also a partner and a Secure Computing competitor. The problems arise only when VARs start reselling products from other market-leading vendors, Venuta says, such as Cisco and Juniper.

Still, some VARs worry about retaliation. One respondent said big vendors might reduce the number of sales leads and other benefits because of perceived disloyalty. Another said leading security-software vendors had given some of their customers to other dealers.

The security-software industry has been undergoing some consolidation, which can be a mixed blessing for VARs. Last year, IBM bought Internet Security Systems (ISS) for $1.3 billion, and EMC acquired RSA for $2.1 billion. Both companies were IST suppliers, and Venuta is concerned about how those partnerships will fare under new management. But he also says consolidation makes it easier to keep track of his supplier roster.

--By Rick Whiting

NEXT: Playing it safe with security hardware

Security Hardware: A Safe Bet For VARs

The market for security hardware may be dominated by Cisco Systems, Juniper Networks and SonicWall, but there's a long list of alternative suppliers of security gear--some that offer better performance and others that provide better prices, VARs said. And solution providers are willing to take a chance on them.

Security solution providers, taking part in the 2007 VARBusiness Alternatives Study--conducted in December 2006--listed WatchGuard Technologies, Symantec and Barracuda Networks among the alternative security hardware suppliers whose products they either resell or would consider reselling. WatchGuard was cited by 26 percent of survey respondents, while Symantec--also a major vendor of security software--was mentioned by 15 percent.

Others that made the list, such as Check Point Software Technologies and McAfee (2 percent), are already dominant players in security software. In security hardware, though, they're alternatives rather than market leaders.

Solution providers offer multiple reasons why they resell products from lesser-known vendors or would consider doing so. But many of those reasons boil down to technology and financial considerations. Half of the survey respondents cited product performance as a key factor when deciding to go with an alternative product; 46 percent pointed to innovative technology.

Solution providers seem to be more cost-conscious on the hardware side than they are with software: Price opportunity was cited by 47 percent of respondents as a good reason for reselling alternative products, making it No. 2 on the list. Security software resellers, in contrast, cited price opportunity fourth (31 percent).

Other good reasons for reselling security hardware products from alternative vendors include gaining access to potential new clients (40 percent), filling holes in product portfolios (39 percent) and staying ahead of competitors (38 percent). Others cited better partner programs (36 percent), better margin opportunities (35 percent) and greater service offerings (34 percent).

And there's no shortage of start-up security-product companies looking for solution providers to resell their hardware (and software).

"We get multiple calls from start-ups every week," says Pete Venuta, vice president of business development at Information Security Technology, St. Paul, Minn. The company chooses alternative suppliers after a grueling evaluation process that includes examining how the supplier's technology fits into its product line and whether the product lives up to its claims, eliciting input from the supplier's customers and determining how well the two companies can work together. "The smaller ones tend to be more flexible on the partnering agreements," Venuta says.

Security-hardware resellers express a little more trepidation than software resellers about suffering repercussions at the hands of their primary vendor if they adopt an alternative manufacturer's offerings. But the concern was still minimal. Only 7 percent were worried about such fallout, while 93 percent were not.

Among the potential repercussions that VARs fear? Losing goodwill with their primary supplier or that supplier cutting off sales leads or feeding business to other solution providers.

Interestingly, 21 percent of large VARs said they worry about vendor retaliation, compared to 6 percent of midsize VARs and 7 percent of small VARs, even though larger resellers presumably have more market clout.

--By Rick Whiting

NEXT: Mining the storage gold rush

Storage: Mine the Gold Rush

Back in 1990, EMC co-founder Dick Egan offered Rich Kuhar a job handling professional services.

Egan had worked closely with Kuhar's father at Intel and the two remain friends. But Kuhar decided to pass on EMC, which at the time was an $80 million-a-year start-up.

There was a long family history. Egan had worked closely with Kuhar's father at Intel when the microprocessor giant was an $80 million company and the two remain friends. But Kuhar decided to pass on EMC, which was still a growing company. "It was fledgling," he recalls.

Does he have any regrets today, now that EMC is a $11.2 billion giant? "It might have been cool, or it may have been too stressful," he says.

Now Kuhar is director of business development at Arkay, a veteran-owned small business based in Akron, Ohio, which operates in five areas throughout the United States and Canada.

Ironically, Arkay is one of those VARs that bases its business on going against the establishment--shunning companies such as EMC and IBM in favor of alternatives such as CommVault and Diligent Technologies, which are both key suppliers of backup-and-recovery software; Reldata for IP-based storage connectivity; and NexSan for midrange disk arrays. "We've stayed primarily with smaller vendors; that's where the innovation comes from," Arkay says.

There's a gold rush of storage vendors serving markets of all sizes. Many companies, such as CommVault and Riverbed Technology, have gone public recently, and many more have come out of stealth operations, such as Incipient. Kuhar recalls five years ago when there were only one or two providers of iSCSI storage gear. "Now they're coming out of the woodwork," he says.

Like many solution providers that offer storage services, product performance was a key criterion when deciding to partner with a storage vendor, according to the 2007 VARBusiness Alternatives Study. Pricing and innovation were a close second and third, the report found.

Reldata is one vendor that fits that product-performance bill for Arkay. The Reldata IP Storage Gateway appliance virtualizes SANs and network-attached storage over either Gigabit Ethernet, Fibre Channel or iSCSI-based networks. It's competitive with TagmaStor Junior (NSC 55) from Hitachi Data Systems.

Performance of the Reldata product is a key differentiator, Kuhar says. "It's blazingly fast."

Arkay has opened up to some tier-one players, such as Hitachi, with its TagmaStor system, and Network Appliance.

Arkay is among a number of solution providers that remain cynical of EMC's partner focus, which is why it prefers working with alternatives. "We have not brought on EMC, because of its lack of channel commitment," Kuhar says.

EMC, for its part, says that it's upping its commitment to the channel by changing the compensation plan of its direct-sales staff. Under the new plan, EMC salespeople will no longer be able to apply services to meet their sales quotas, and the quotas were reduced proportionately.

That means channel partners "are going to get higher margins on the deals they do," says Mitch Breen, EMC's senior vice president of global channel sales. In the past, that meant a partner selling $250,000 worth of storage equipment and $30,000 worth of services only got credit for selling the gear. Now they'll get credit for the whole $280,000 solution. Indeed, while the vast majority of partners rely on alternative vendors, some still stick with one player.

International Computerware is one such partner staying out of the alternative fray. "People ask me why I'm putting all my eggs in one basket with EMC," says Jaime Shepard, vice president of Marlborough, Mass.-based International Computerware. "I say it's a big basket with different color eggs."

--By Jeffrey Schwartz

NEXT: Voice networking heeds the VoIP call

Voice Networking: Heeding the Call To VoIP

We're a scrappy little start-up, so we're always open to trying new vendors," says Michael Galkin, vice president of business development at Old Bridge, N.J.-based VoiceNext. He likes to give the little guy a chance, and in the VoIP/voice networking arena, that sometimes means having to shirk the giants like Avaya, Cisco and 3Com for some of the smaller, newer and often more innovative vendors that are popping up in this hot field.

"We do our due diligence on the company, and at the end of the day, there are a lot of innovative companies out there that can compete better than the large ones because they can move quicker," Galkin says. "The smaller guys can move on a dime, whereas the bigger guys are like oil tankers--they have to start turning 15 to 20 miles before they actually make that move."

Galkin counts Polycom, ShoreTel, Zultys and Aastra among his stable of alternative VoIP/voice-networking vendors and has found that support tends to be better with his smaller vendors. "I can talk directly with engineers and get things done quickly rather than having to go through three layers of management," Galkin says. "If there are 15 or even 25 engineers on their staff, I know the right guy to call for certain problems, and I can get through to him and solve the problem for my customer."

This year's 2007 VARBusiness Alternatives Study survey respondents reported that Linksys, ShoreTel and Digium/Asterisk were considered to be their top alternatives to the big guys. Innovative technology, price opportunity and filling holes in product portfolios were cited as the top three reasons that solution providers consider selling alternative VoIP/voice-networking products.

James Middleton, senior solution architect at Tulsa, Okla.-based Xeta Technologies, says that while he's a big Avaya reseller, he's also looked at the range of smaller voice options from Digium to Quintum.

"Not every customer is looking for a grand solution," he says. "The guy in a warehouse that only picks up the phone and answers it doesn't necessarily need the high-end, $1,000-per-seat, call-center package."

"Customers are starting to intermingle different vendors and different levels of product for different needs,"Middleton continues. He says customers might want more sophisticated products for certain business areas, while others are perfectly well-served with a more basic product at a lower cost from a smaller, alternative provider.

Interoperability with major vendors is also a vital part of evaluating alternative vendors for Middleton. "Although there are a lot of standards, there's still a lot of vagueness in the industry," he says, adding that it's important to have good relationships with the larger companies to ensure interoperability across the network.

Service is also an important value proposition for using an alternative, or any vendor for that matter. Middleton suggests asking a vendor if it provides warranty or post-warranty service.

Ultimately, it comes down to choice and being able to offer customers different options according to their needs.

"There's no single vendor out there that can be everything for everyone and have everything in one package. It doesn't matter who it is," Middleton says. "We have to be open to these alternative vendors that are out there and have done a terrific job filling the smaller niches."

--By Cristina McEachern

NEXT: The laptop price is right

Laptops: Pricing Reigns Supreme

If you can't beat 'em, sell 'em. When it comes to the high-volume, thin-margin business of providing laptop and notebook computers, VARs indicate they'll consider all comers to the game, even if that includes the resellers' nemesis, Dell. The Round Rock, Texas-based direct PC seller--last year considered the market leader against which all alternatives were judged--made the list in the 2007 VARBusiness Alternatives Study for the simplest of reasons: Price motivates VARs' search for new vendors.

"I watch for sales and buy them when they do short-term deals," says Alex Cone, CEO of CodeFab in New York. "They're an excellent value."

That said, Cone's heart is largely with Apple. "They offer a better deal than all these other brands," he says.

Of the 281 resellers and solution providers responding to this year's survey, 58 percent said they intend to resell notebook and laptop PCs in the coming year. For that plurality of VARs, the field of potential alternatives in the laptop and notebook area is wide open. When considering gear from vendors other than market leaders Hewlett-Packard and Lenovo, VARs surveyed gave solid nods to Toshiba, Dell and Acer, with 45, 37 and 31 percent of respondents citing these brands, respectively.

But the strength of the mandate for those alternative vendors varied widely with VAR size. While small VARs matched the overall order for the top-three alternatives, midsize VARs came out strong for Acer with 53 percent, followed by Toshiba at 41 percent and Dell at just 28 percent.

Large VARs, however, reverse Dell's fortunes, with a whopping 65 percent choosing the vendor known primarily for its antichannel stance. The biggest solution providers picked Toshiba second, with 30 percent, and relegated Acer to third place, with just 10 percent.

Beyond the top-three alternatives, VARs spread the love fairly evenly among Sony (16 percent), Asus (9 percent), custom white boxes (7 percent), and Panasonic, Apple and Fujitsu (6 percent each).

Dave Kurtz, president of Keewaydin Computers in State College, Pa., says he favors Toshiba and steers clear of Dell and other leaders. "I wouldn't deal with Dell because they create a product that can't be changed in the field without sending it back to Dell," Kurtz says. "It could be difficult to upgrade or replace nonworking parts by substituting non-OEM parts."

When it comes to driving consideration of laptop PC alternatives, VARs uniformly pick price, performance and innovation at the top of the list. From large to small, all agreed on the order, and the overall choices found price top-of-mind for 67 percent, followed closely by product performance at 59 percent and innovative technology at 46 percent.

"The vendors are almost all the same, qualitywise," says Bill Wakefield, sales manager at Logista Solutions, Bessemer, Ala. "We usually buy direct from Dell only when we have a customer that demands it."

Other drivers ranking lower, but still key to solution providers, include gaining access to new clients and margin opportunities (39 percent each); better support and filling holes in the product portfolio (37 percent each); and increasing overall sales revenue (35 percent).

VARs indicate that the laptop and notebook PC channel is a more genteel place. A whopping 96 percent of the survey respondents said they feared no repercussions from existing vendor partners if they adopted a new brand.

--By Chris Gonsalves

NEXT: Monitors on display

Displays: A Horse of Another Color

Iron Horse, a small VAR located about 15 miles from Washington, D.C., last year landed a deal to sell 365 of Acer's 19-inch flat-screen higher-end displays--a sale which, in total, added up to about $165,000.

The company then informed Acer, via its distributor Ingram Micro, that getting the best pricing was the VAR's top concern and that it could delay delivery if necessary. Based on reassurance from Acer that the current pricing was the best the VAR could get, Iron Horse placed the order. Less than 24 hours later, Acer had issued a price change that would have saved the VAR $20,000. But despite Iron Horse's protests, Acer would not grant the VAR a refund, says Tony Stirk, president of Iron Horse in Springfield, Va.

Such experiences illustrate the risks VARs take when opting for alternative vendors. That's not to say such experiences are unheard of with market-share leaders, but VARs say they sometimes feel less confident when dealing with alternative vendors because they often lack established partner programs and experience in the market.

"Because of not having a leading market-share vendor like NEC's experience, some manufacturers might be more susceptible to being whipsawed by market-share forces and not understand the long-term perspective but act more for short-term gain," says Stephen Bohlig, principal for Compar, a VAR in Minnetonka, Minn.

Yet, in the continual balance of trade-offs that the channel faces, VARs often find the risk worth taking. Iron Horse, for example, still sells "a ton of Acer monitors."

Acer's monitors often provide the basic features users need at a lower cost, and they are usually in stock and ready to ship when users need them--two factors that make them too compelling to pass up for many resellers. In fact, more than one-third of VARs responding to the 2007 VARBusiness Alternatives Study said they sell Acer displays, which makes them the most widely used alternative display vendor, after more entrenched vendors such as NEC, Samsung and ViewSonic.

"A lot of other manufacturers throw in higher-end features to do this, that or the other thing, and that's nice, but who's going to use them?" Stirk says. However, he added, "Acer's support in terms of monitors is almost nonexistent. From a reseller standpoint, on everything but price they suck. It's the same thing with Dell."

Dell, in fact, was ranked second among alternative vendor displays VARs are most likely to sell, despite the stigma the direct-sales vendor carries in the channel. About 21 percent of VARs said they're selling Dell displays, which was mainly driven by user request and not by their own choice.

Other alternative vendors frequently used by VARs include BenQ, LG and AOC. And about one-third of VARs cited "other" display vendors as alternative companies they buy monitors from. This illustrates the wide breadth of choice resellers have in the market and how price is such a strong driver.

In addition to price and inventory levels, warranties were also cited by VARs as a key criterion for choosing alternative displays. In sales of larger-screen, higher-end displays, however, product features become more important.

"With the higher-end, 42-to-60-inch displays, things like bezel, how you're going to mount it and the inputs it takes--those kinds of things become quite important. I'm seeing alternatives there, too, like Panasonic, Sony and LG, but it's less on a price basis and more because it fits a spec requirement," Stirk points out.

--By Shelley Solheim

NEXT: Printers that make the mark

Printers: Making the Mark

Among smaller VARs, price is paramount when shopping for alternative printers from vendors other than channel veterans Hewlett-Packard, Lexmark and Xerox.

This gives a competitive edge to vendors like Brother, which build their own engines and, as a result, can offer lower prices. Nearly one-quarter of VARs said they're selling Brother printers, specifically its multifunction line, which made it the second-most popular alternative vendor on the list, behind Epson, which was cited by nearly one-third of respondents in the 2007 VARBusiness Alternatives Study.

"I made the choice to not sell HP. It was hard to get up to levels where I could make any money," says Sheldon Penner of Amicus Data, a one-man IT consulting firm for small businesses.

Penner has taken his business to others such as Ricoh, where he says he's found better discounts and better support.

"Ricoh makes it easy for me to get the sale. I don't have to go to a Web site and enter a number of serial numbers, and they provide a good product at a lower price with discounts up front rather than at the back end," Penner says. "I don't want to waste time on printers. I used to not sell printers at all; it was too much of a pain to go through the process. I had a book 3-inches-thick from HP, and it was a hassle trying to get someone to talk to; they don't care about me really."

Other VARs echo Penner's feelings.

"We're trying to move away from HP. The service is so bad--it's beyond terrible," concedes Robert Brown, general manager of Professional Technology Integration (ProTI), a midsize solution provider based in Seattle that specializes in serving the needs of small to midsize health-care and law practices. Brown says he resells alternatives such as Ricoh and Canon.

"Ricoh's been taking care of me. I've had a couple of problems with them, and they've sent out a new product--no questions asked," Brown says.

As it turns out, Ricoh has been winning quite a few VARs' hearts in the past year with its aggressive channel push, part of the company's larger initiative to become a more predominant force in the printing market. Still, Ricoh has yet to prove its loyalty to the channel over the long haul, and only 6 percent of VARs in the survey singled out the vendor, ranking it behind others such as Samsung, Canon and Oki Data.

And some VARs tread cautiously in alternative waters.

"It's an unknown, because you're not working as closely together for a longer period of time, so you don't know their marketing plans and product-lifecycle plans," says Stephen Bohlig, principal at Compar, a solution provider based in Minnetonka, Minn., of working with an alternative vendor. "The real risk is not understating what the goals and plans are for any particular product line. I may not know how long their products will be in the marketplace, or what enhanced features will come with new models, or the availability of spares, or where the vendor wants to place itself in the market."

While price was king for smaller VARs, larger VARs responding to the survey cited product performance and innovation, as well as opportunities for better margins and service engagements, as top reasons why they're turning to alternative vendors.

"We've increased the breadth of manufacturers we offer to customers," Bohlig says. "We sell everything from Ricoh and Kyocera to Oki Data and Samsung."

--By Shelley Solheim

NEXT: