System Builder Barometer 2003

According to the NASBA Thinking Out of the White Box survey, the top challenges for system builders in 2003 are customer retention at 49 per cent, support requirements at 46 per cent and competitive inroads at 45 per cent.

Not surprisingly system builders are highly focused on growing

their relationships with new and existing customers. However, the survey also shows that respondents are keen to strengthen their relationships on the supply side, as well. The top three marketing priorities, as ranked by respondents, were winning new accounts, growing existing accounts and strengthening current vendor engagements. This third priority indicates it might be more difficult for vendors to engage with new system builder partners. However, the first two items far and away outpaced results for the third. This implies that vendors who can help attract new customers and up-sell or cross-sell into existing accounts will be welcome new partners.

Among smaller builders, advertising, Web marketing and public relations were al rated as marketing support activities they planned to undertake during 2003. Larger builders ranked trade shows; advertising and Web marketing as there top marketing support activities. Correspondingly, large vendors placed a higher premium on trade shows than smaller vendors for product information as well. It would seem that vendors would be well served to focus Web-based efforts on smaller builders, concentrating trade show efforts and support material on larger builders.


There’s little doubt that 2002 was a crushing year for the technology industry. IT spending was one of the hardest hit budgets among all segments, except consumers. But the system builder channel, which enjoys some of the closest relationships with customers, is optimistic that 2003 will not repeat 2002. They believe they are now poised to deliver on the great promises that vendors have made this year in all product categories: desktop, notebooks, servers, handhelds and appliances.

They continue to expand their market reach to focus more on the consumer and small business, which make up on average 82 per cent of their business. The system builder channel is going head to head against direct sellers offerings. They are hitting broad vertical sectors such as retail, education, healthcare, manufacturing, and government.

System builders are making a legitimate run at the global technology market, with nearly a third of the U.S. PC market and almost two thirds of the worldwide PC market already in hand.

The traditional lines of distinction separating system builders, integrators, and VARs is blurring, as the white box channel starts to take on multiple roles and pursue markets once reserved for the others. The system builders are in essence challenging the entire technology landscape with a business model that promises stronger customer ties and superior customization.

System builders expect to continue to be a force in the marketplace by focusing their efforts on customer-centric competencies, such as custom configuration, rapid turnaround, intimacy with the technology needs of their customers, and great after-sales support. Vendors who can support this vision will be welcome by the system builder channel.

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Jim Love, Chief Content Officer, IT World Canada

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