Monday, May 11, 2009

Which one of the following is Really Your Technology Partner: The IT Manufacturer or the Value-Added Reseller?

One of the biggest questions faced by companies seeking to make large technology purchases is which firm to partner with to get the job done. Will you work with a local Value-Added Reseller (VAR) or purchase directly from the hardware and software manufacturers? Where can you get the best price? How can you tell a good VAR from a bad one? Do you really need a VAR/integrator if you have a capable IT staff? Who is going to be there to help you through the process, so your project is deemed a success rather than a crash-and-burn-catastrophe? After all, even the best-intentioned decisions can be disastrous if implemented poorly.

It is not uncommon that VARS will many times outlast the manufacturers as manufacturers get bought and sold quite frequently (i.e. Optika -> Stellent -> Oracle or; OTG -> Legato -> EMC; or; Great Plains -> Microsoft Dynamics GP).

To begin, it may be helpful to define who the possible players on your team may be:

Manufacturer – The company that makes the actual product, whether it be hardware or software. These companies may or may not have a direct sales channel. It is quite possible that the manufacturer of your product only sells its products through its partners – its VARs. Microsoft serves as a great example of this model.

They manufacturer and publish software, but resell it through a network of indirect channel partners.

VAR – The term “VAR” or "value-added reseller" is a term used to describe various types of solution providers (SPs), such as: application service providers (ASPs), Internet Service Providers (ISPs), e-business and IT consultants, Web developers, independent software vendors (ISVs) and traditional resellers of hardware and software. Generally speaking though, a VAR is a company that takes an existing product and adds its own “value” before selling to the consumer.

This added value can be in the form of things like professional consulting services, custom development, hardware, vertical industry expertise, specialized services, complementary applications, etc.

Systems Integrator – A systems integrator – in the truest sense of the word – does not sell product. Instead, after the purchase, integrators work to install the base software product(s), and customize the product(s) to make them work together with your existing systems.

Likely, you’ll have a combination of the three types of players working with you on your projects. The important thing is to get the balance right. Of course you want a manufacturer who produces a quality product. And, of course you want an integrator who will get you up and running smoothly. But how do you know that the manufacturer’s product is really the right one for you? Do you want to bring in an integrator mid-stream, after the “homework” has been done and product decisions have been made? Further, will the integrator you select be an IT generalist, versus an expert in Content Management?

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