System Builder Barometer 2003

The ability to provide high-quality tailored customer service lies at the heart of the system builder’s value proposition. Custom configuration and installation are the bread and butter of system builders, according to nearly every respondent.

In fact, the top four value-added services, as

indicated by system builders, revolve around building, installing, maintaining and repairing systems. The ability for vendors to simplify and automate these tasks — through embedded software, remote diagnostics and tools, etc. — will make these tasks easier for system builders, building loyalty and fostering channel commitment.

On the horizon (and a harbinger of the times), many system builders indicated that security and identity management were among the next tier of value-added items they were offering customers. The numbers were higher among smaller system builders — perhaps indicative of that group’s work with legal, accounting and healthcare verticals where a premium is placed on security.

Top Value-Added Services Provided

1. Custom configuration and installation 95%

2. Field maintenance and deskside service 75%

3. Diagnostics and recovery services 71%

4. Help desk operation, telephone support 66%

5. Security and identity management 31%

Applications and utilities

Customer demand drives software integration decisions, according to system builders, with the need to decrease support issues and increase revenue and margins as secondary issues. It’s little surprise that topping the list of software specified by customers is business and communications applications, such as word processors and e-mail, but ranked third and fourth on the list were system integrity, such as anti-virus software, and backup and recovery software. Clearly, customers are concerned about loss of data and privacy due to viruses and hackers.

Among larger system builders, getting a handle on operating efficiencies weighed in as the second most pressing business consideration by more than half of that group. This indicates that larger system builders might welcome recent mid-market moves by vendors in supply chain management, customer resource management and enterprise resource planning.

According to respondents, some of the top issues shaping market demand and driving customer requests are cuts in IT costs and constrained IT spending. On the plus side, they also point to improving the user experience, enhancing user productivity and wireless connectivity as significant drivers of market demand.

On the product side, system builders are seeking healthy product sales margins, ranging from 16 to 24 per cent, further suggesting that lowering of their supply and support costs are key elements in continuing a profitable business. The highest margin system builder offerings are big-ticket items in the form of servers, at 24 per cent. Average selling prices of pr

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