VARs reign in LAN equipment procurement

A recent survey performed by In-Stat/MDR has found that VARs are the most popular channel for LAN equipment procurement for large and small businesses alike. The report surveyed decision-making and/or people with purchasing authority for network equipment and services at their company or organization.

What

was revealed was that even though larger companies are more likely to buy directly from a manufacturer smaller companies are more likely to buy through retail or VARs, which was the preferred way to go, according to the respondents. With 56.4 per cent of survey respondents indicating that they purchase their LAN equipment through that channel.

When purchasing through VARs, “”after-sale service and Support”” and “”quality products”” were the two most important criteria amongst survey respondents. Conversely, when purchasing through retail outlets, “”low price”” was overwhelmingly the selection criterion. These results simply reflect the nature of the types of products that are sold in each of the channels, and manufacturers need to assure themselves that their distribution strategy is aligned with their product strategy.

In-Stat/MDR also found that:

  • Trade magazines and word of mouth were both key means cited by panelists as the best way for equipment manufacturers and VARs to advertise to them. Additionally, for VARs, vendor recommendations were also very important.
  • Many panel companies use both distributors as well as system integrators, when they select VARs; VAR recommendations were only “”somewhat”” important in the product selection process; and that VAR certification by vendors was, likewise, only “”somewhat”” important to panelists.

This Market Alert is drawn from the In-Stat/MDR report, Channels For LAN Equipment; How They’re Buying ‘Stuff’ In 2002, which is the ninth installment of the LAN Research Panel and provides primary, end-user data on the use of channels for LAN equipment purchases by companies and organizations today. The report includes information and analysis on: the types of channels used to purchase LAN equipment, key criteria used to select channel partners for LAN equipment purchases, most effective means for manufacturers and VARs to advertise to potential customers, key benefits sought by potential customers through working with channel partners, as well as certain VAR-specific data.

 

Louise Handley is an analyst at In-Stat/MDR (http://www.instat.com), a research firm that offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals, and market specialists worldwide.

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