Relying on a small number of alliances could be hazardous to the health of vendors and resellers, the head of IDC Canada has warned a group of VARs.

“”It definitely pays to have friends,”” Michael O’Neil, managing director of IDC Canada

told a national reseller sales conference in Toronto last Friday.

The market research firm came to that conclusion after a survey of 435 large and medium-sized Canadian companies found over 40 per cent had used only one bidder — not competitive bids — in their recent IT purchases.

In some categories of products, 60 per cent said they used a single source.

Those who think it was an all-or-nothing game would be wrong: Between 50 and 60 per cent of solutions were packages that included products or services from more than one supplier.

While the data suggests these companies prefer to deal with one trusted source, O’Neil said, it also shows the importance of vendors and resellers having widespread alliances with industry leaders.

“”If you’re going to gain access to opportunity it’s much better to do that by being wrapped into other companies’ approaches to solving customer problems than it is to take them on in competitive bid situations,”” O’Neil advised.

The survey showed the overwhelming majority of purchases by respondents had been of IT infrastructure (52 per cent by large companies, 63 per cent by medium-sized companies), followed by software applications (28 per cent of the purchases by large companies, 16 per cent by medium firms), with about 10 per cent of purchases in networking infrastructure.

The conference was sponsored by Ingram Micro Canada, a broadline IT distributor, which invited its top 150 resellers to network and hear IBM, 3Com and Lexmark outline their Canadian strategies.

The study also shows how important it is for vendors and resellers to stay close to their customers,”” O’Neil said in an interview after his address.

“”The investments (IT) suppliers have made in extensive customer relationships have positioned them to be preferred sources of supply in a significant number of opportunities.””

“”This is consistent with what we’re finding in SMB research as well,”” he added. Typically companies have a trusted supplier who are asked first to help solve a problem, and if they can’t, the company looks for other suppliers.

“”Access to market is not your ability to compete effectively in RFPs, it’s your ability to compete for mind share within the companies that already have (a large portion) of the market and to work with them to get at opportunity.””

Asked what Canadian companies who don’t have extensive partnerships should be doing, he replied: “”They can either figure it out or die,”” he said.

Comment: info@itbusiness.ca

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