Trends And New Opportunities In The System Builder Market

Falling margins and the Internet are changing the way system builders conduct their business, a new study finds.

About the Study

A primary research study recently was commissioned to chart industry trends and provide market intelligence on the top revenue producers in the system builder channel. The source for this survey was attendees of System Builder Summit Spring 2000, a semi-annual industry event that unites 200 of the top members of the system builder channel with technology vendors. Summit Spring 2000 attendees from North America represent annual sales of nearly 4.3 million desktop, notebook and server systems; making them fifth in total system volume sales, behind Dell, Compaq, Gateway and Hewlett-Packard.

Cohesion, a channel marketing agency, was retained to design, conduct and report the major findings of the research. A self-administered questionnaire was e-mailed and/or faxed to confirmed Summit Spring 2000 attendees, followed by a telephone call to solicit responses from non-responders. An additional source of data used for this survey, including unit volume information, was the event enrollment form.

Key Findings

The major changes taking place in the system builder channel are the direct result of falling hardware margins and the Internet. Many key findings will, therefore, guide other resellers in defining new business models, as well as offer insight to the vendors that rely on the channel for product and service sell-through. Some key findings specific to the Internet activity of Summit system builders include:

1. In the past six months, the percentage of Summit system builders that added or increased their Internet connectivity and integration services doubled.

2. All Summit system builders implement an e-commerce strategy.

65 percent currently have, or plan to have (in the next 6 months), an extranet or virtual private network (VPN) in place for repeat customers and ongoing accounts.

4. E-commerce transactions have become the third most frequent type of transaction between Summit system builders and their customers.

5. A secure transaction site tends to increase the share of revenue from e-commerce transactions by 9 percentage points for Summit system builders.

For Further Information

The complete white paper is available for $795. To obtain a copy of "Trends and New Opportunities in the System Builder Market," contact:

Karen Strub
Cohesion Inc.
800-981-9154 ext. 5823
kstrub@cohesioninc.com

For more information about System Builder Summit, call 503-675-3550 or visit www.systembuildersummit.com

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