VARs: Vendor Better At Products Than Partnering

For example, IBM System i is at parity with Intel for the highest individual criterion score in the entire 2007 ARC. This vendor division received an 87 for product quality and reliability. But System i came in fourth out of five vendors in the Mainstream Business Servers category, taking a big hit for ease of doing business--with a score of 60.

"I think it's the best computer you can buy to run a business," said 19-year System i veteran Perry Mills, president of iTEC400 Inc. in Orange, Calif. "And their support structure, telephone and field support for this product is second to none."

"The IBM System i servers are so reliable that our service revenue suffers as a result," added Mike Ritsema, president of i3 Business Solutions LLC in Grand Rapids, Mich.

I3 has been selling System i since the business opened its doors in 1992. Ritsema said the reason for IBM's fourth-place score for partnership among server vendors might be due to the way IBM manages its channel. As Ritsema described it, if you as a partner are competing with others for a customer opportunity, you may have to submit documentation to IBM showing how much you've been working with a customer in order to be awarded margin. While Ritsema expressed a positive opinion about this policy, he did imply the documentation requirements can be onerous. "You could hire a professional team to help you get it right," he said. "This process, although clearly defined, is decided by an IBM team, in a far-off land, allowed no human intervention, and ending in what would appear to be subjective outcomes--upon occasion."

In the satisfaction study, many vendors' ratings suffered in the areas of training, partner portals and management of channel conflict.

Some VARs said that the generally low scores across the board stem mainly from the channel conflict problem. Brian Deeley, a principal in Timonium, Md.-based Graymar Business Solutions, said he thinks this problem has recently become worse than before.

"One of the targets that is getting a lot of attention in the past 18 months is the SMB market. Everybody's saying that's where growth is going to be. That's changing the dynamics of the channel," Deeley suggested. "VARs ... have really been the owners of that market. We have the customer relationships. We're in the doors of those businesses on a daily or weekly basis. The vendors are seeing growth in that area, so now they want to attack that market segment."

Deeley added that many resellers perceive that as an infringement on their territory. "Part of it is fear of the unknown," Deeley said, but "part of it is what vendors have done in the past."

The Leader
Far and away, Intel led the field in this year's ARC survey. The Santa Clara, Calif.-based chip maker received the top weighted scores in the 2007 ARC for product innovation, support and partnership.

Randy Jorgensen, president of RJNetworks, a Salt Lake City-based VAR and Intel partner for eight years, said the vendor's attention to even small VARs like his goes a long way in the channel. "I'm a small, two-man shop," Jorgensen said, "yet I've got a dedicated sales rep at Intel that I can get on the phone with at the drop of a hat, or e-mail and get a response back amazingly quickly addressing very specific questions, issues or problems."

Jorgensen said when it comes to channel conflict, Intel distinguishes itself from the rest of the major vendor pack. "Here's the difference," he said, "Intel does not have in any way, shape or form a direct sales force. HP does. Microsoft doesn't, but they've got their great big guys that are out there; the CDWs and so on. [Whereas] Intel knows that, going through me, they probably get a better profit margin just because the Dells and the HPs of the world make such cutthroat deals with Intel. Intel has everything to lose by not helping me--whereas Microsoft, HP and others don't care."

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