Small-Business VARs Speak Out


VARBusiness' think-tank session looks at the issues important to SMBs


What's on the minds of small- business solution providers? Last month, VARBusiness editors David Strom and Jennifer D'Alessandro sat down with seven SMB VARs during D&H Distributing's annual partner conference in Hershey, Pa., to learn more about what this group of high-tech players is thinking. The discussion, led by senior technology editor Strom, found that distribution gets good marks; online ordering is gaining in popularity; and white boxes could save the day. Read on to see what else bubbled up in our think tank.

Distributor Satisfaction

Most attendees noted that they did a vast majority of their ordering via the Web. One challenge is establishing credibility with online partners.

Michael Muniz, owner of M&M Computers, New Cumberland, Pa.:
We've used all the major distributors. They've all made great strides in the past year with their Web sites. With online ordering, pricing is a lot better. It's odd to get any type of discounts from distributors, but they give you free shipping thresholds in many cases, and they give you better access to information. You can order at five o'clock in the morning,you can order at midnight if you want to. If you place an order, you can also follow up on it without having to call somebody.

Tony Moawad, owner of Sabretek, Harrisburg, Pa.:
I suppose I'm old-school. I kind of prefer talking to a sales rep, not because D&H is here, but because I like the fact that I have a dedicated sales rep I can call if I have any questions. You know, [things like: I'm looking for this, What do you think? When can we do this?

It's one thing if it's after five o'clock or it's 8 p.m., or whatever, and you're putting in orders and you can conveniently order it over the Web. But even when I do that, I'll still put in a note. At least that's the way it is on D&H,you can put in a note saying, "Please review." It will go to my salesperson before it's actually processed, if I want it to. I like having that one-on-one relationship.

Microsoft And Linux

Although not as many VARs are as proficient in deploying Linux as they are in deploying Windows OSs, they are increasingly seeing more applications for Linux. And, they are finding it being embraced by the likes of HP and IBM.

Wesley Mullis, systems engineer at Esh Computer Center, Gap, Pa.:
We have had customers moving off Microsoft products and onto Linux for basically their databases, back-office Web development, Web servers, file-and-print sharing, that type of thing. They are doing it to get away from the per-server Microsoft licensing issues. You don't find as many people proficient in administrating Linux as you will find [proficient Windows' administrators. That can be a drawback. But more and more, you're seeing more Linux, [and you're seeing it being embraced by HP, IBM and others. You're going to see more and more of Linux going forward.

Craig Wilson, owner of Computer and Network Solutions, Harrisburg, Pa.:
With Microsoft, we're seeing I guess what one might call quiet resentment. But if that's a trend, I think these IT guys with major investments in Microsoft software will sit on that delicate chair for some time and won't be prone to want to make sweeping changes. No matter how good you are, it will upset them more to ditch Microsoft, so in the short term they will stick with it, unless Microsoft pushes them over the edge.

Windows 2000 And XP

The consensus is that most businesses are happy with their current Windows OS, and so upgrading is a tough sell.

Moawad:
Businesses don't feel they need to change things if they're running Windows 2000. It's not giving them problems. They're able to do just about everything with 2000 that they need to do. Windows XP doesn't offer a whole lot to justify paying for a new OS or a new rollout of OSs across the enterprise.

Muniz:
We see about half the people actually installing Windows 2000 Professional over existing versions of Windows XP that came preloaded on their systems. We'll sell them the XP license because it is downgradable, and so our customers have an XP license, but they can continue to run 2000.

Tim Klan, owner of Expert Computers, Erie, Pa.:
We just had a school district place a very large order of roughly 150 units. The last day after they faxed the purchase order in, they called and wanted to get everything changed to 2000. They were planning on going with XP, but they got the prototype unit, and while they liked the unit, they didn't like XP.

White-Box Satisfaction

The VARs indicated that white-box sales have picked up tremendously. Customers report being more pleased with the reliability and the consistency of the system- builders' products.

Klan:
We had a school order 75 units from a major manufacturer, and when it got the PCs, they were all different. Some of the components had changed, even though they were ordered on the same purchase order. They had different graphics drivers, video drivers and so forth. So they had to have three different images to handle this one purchase.

We can guarantee that all of our PCs are all going to work together, and if the customer buys three more a month from now, they're still going to work together and have the same configuration.

Service Business

Service is a key differentiator, not only when SMB resellers buy their own components, but also when they sell their own products.

Rich Cancilla, owner of Response Computer, Pittsburgh, Pa.:
If you're not in the service business and you're selling hardware by itself, you're not going to be in business long. The service business has kept us in business for 16 years. The service business end of it is great. [If you get a service contract with a decent customer, you're going to make 80 percent on the service contract.

Wireless

Sounds like, finally, wireless might have its day in the sun.

Klan:
Wireless has really started taking off this year. The wireless networking products have been around, they've been available, but this year they've really hit home. Dealers we're forwarding wireless to are actually selling it. When new technology comes out, we write a lot of quotes, and then slowly those quotes turn into orders. Right now, we're seeing probably a 90 percent fill rate, meaning these quotes turn into actual orders whenever we quote wireless networking.