Study Shows Customers Increasingly Rely On Solution Providers

The study also found that solution providers influence brand solutions of their customer 90 percent of the time, said Monty Cornell, research director for CMP Media's Technology Solutions Group, which released the report, called "The Expanded Role of Solution Providers In American Business." CMP, the publisher of VARBusiness, surveyed 790 solution providers through a Web-based poll. "Solution providers are an integral collaborative part in designing and specifying technologies and brands and deploying strategic solutions," Cornell said at a presentation Tuesday at the Breakaway Xchange conference here.

Total IT spending this year will be $533 billion, of which $342 billion will be purchased through indirect channels compared to $190 billion direct compared to last year where IT spending was $513 billion, of which $192 billion was direct and 320.9 billion was indirect, the study reported.

In 2003, companies will spend $357 billion on IT products and services through indirect channels compared to $199 directly. Things will start to pick up steam in 2004, where total IT spending through indirect channels will be $432 billion.

Moreover, solution providers are forging close ties with C-level executives. Sixty-eight percent cited the CEO, CFO or CIO as their primary contact, while 42 percent sited IT directors and managers. The remaining 26 percent said line of business and nontechnical VPs were their primary contact. Solution providers are meeting with their customers several times per month--those with accounts with 1,000 to 9,999 employees visit 35.2 times per year, and those with more than that visit their clients nearly 42 times a year.

Overall, the study concludes that the channel has successfully moved away from a model that focused on fixed fee transactions to performance-based ones over the past 10 years, a trend that Cornell said is poised to continue. "In another 10 years from now, hopefully the bars will have moved up, the channel will have matured even more," Cornell said.