1st Quarter 1999 Distribution & Fulfillment
Customer Satisfaction Study Completed
Direct Vendors, Local VARs, and Inacom Rated Best
Overall Channel Partners Among Corporate End
Users; Relationship Problems Between Channels
and Systems Vendors Intensify
HAMPTON, N.H.--(BUSINESS WIRE)--April 15, 1999-- According to
the results of TBR's 1st Quarter 1999 Distribution & Fulfillment
Customer Satisfaction Study, corporate end users primarily base their overall satisfaction with channel
partners on product delivery and availability, ease of doing business and accountability, volume
purchasing agreements, and returns policies. Support services quality is also becoming a prominent
issue in terms of which channel partners are selected and retained for continued business relationships.
Channel partners are analyzed in the report according to type classification (corporate resellers,
local/specialty VARs, direct vendors) and by primary channel partner. The competitive analysis reveals
the direct vendors Dell (NASDAQ:DELL - news) and Gateway (NYSE:GTW - news), the local VARs,
and one of the corporate resellers rank in the top tier for end user satisfaction. Among the corporate
resellers, the study findings point to one extraordinary channel partner, Inacom (NYSE:ICO - news), two
good to average partners, Compucom (NYSE:CMPC - news) and MicroAge (NYSE:MICA - news), and
three corporate resellers for whom several specific areas of weakness emerge - GE Capital, Vanstar
(NYSE:VST - news), and Entex. The weighted customer satisfaction scores, with the hypothetical
perfect score set at 100 points, are listed in the table below.
-0-
Channel Partner Weighted Customer
Satisfaction Score
Dell 84.94
Local VARs 83.88
Gateway 83.60
Inacom 82.68
Compucom 80.55
MicroAge 79.46
GE Capital 76.32
Vanstar 76.11
Entex 74.85
The local VARs tend to be viewed as the best choice for a channel relationship after the direct vendors,
and actually represent a better choice for ease of doing business and on-site support expertise. Both
Dell and Gateway are consistently rated better than the corporate resellers for most attributes. Direct
vendors' scores for volume discounting, on-site support response, and on-site expertise are comparable
to those for the corporate resellers. The direct vendors rank better than the local VARs for hardware
evaluation/selection advice, set-up and configuration, accountability, and parts replacements. Dell's only
weakness is for on-site support expertise, for which its customers in the sample rate Dell's third party
service providers significantly lower than they rate them for their on-site response. Gateway's
weaknesses include the usual suspects: volume discounting, technical support response, and the lack
of on-site support availability.
Among the corporate resellers, Inacom is perceived as superior to its competition due to its consistency
and excellent understanding of its customers' requirements. Inacom holds its own against both the local
VARs and the direct vendors. MicroAge and Compucom are seen as relatively good business partners
with a few strengths relative to their corporate reseller competition. GE Capital's principal weaknesses
include returns policies, accountability, and product delivery/availability. Entex's weaknesses revolve
around the difficulty of working with the company, primarily due to its recent re-organizational activities
and subsequent confusion. Inacom's Vanstar division's satisfaction scores trend much lower than those
for Inacom and the company primarily suffers from a perception of inconsistent support and an
unwillingness to communicate properly with customers.
The second portion of the study consists of in-depth interviews with major channel players regarding
their satisfaction with the hardware systems vendors' channel programs and product integrity. While the
previous quarter's study pointed to Compaq as the principal agitator of deteriorating vendor/channel
relations, this study finds that channel conflicts run deep due to significant cut-backs in programs by all
three systems vendors and that live, face-to-face contact is becoming increasingly difficult. Compaq
(NYSE: CPQ - news), IBM (NYSE: IBM - news), and Hewlett-Packard (NYSE: HWP - news) are cited
by the channels for reducing their channel programs, although IBM's and, particularly HP's scores were
somewhat better than Compaq's for returns policies, price protection, and inventory policies. The
systems vendors are generally considered very poor communicators and unwilling to assume proper
accountability, and the returns policies issue is as much on the minds of the channels as it is with the
end users. While both HP and IBM are criticized for their lack of visibility (feet on the street) with their
PC products, Hewlett-Packard's product integrity for their desktop systems, including performance and
upgradability, is rated much lower than that for either Compaq or IBM.
While last quarter's channel interviews were accented with uncertainty and fear about the future, today
the channels appear to be a little more realistic about the changes taking place in the industry, and are
motivated to provide better services to corporate end user customers.
The end user sample consisted primarily of MIS/IT or purchasing managers at medium and large
companies (500 or more employees) who buy a minimum of 100 systems annually. The sample of 331
respondents represents an installed base of over two million desktops, servers and notebooks and a
purchase intent of over 500,000 systems over the next 12 months. The channel sample consists of 50
purchasing, operations and marketing managers at the leading systems integration, corporate reseller,
distributor, and local VAR companies. A complimentary copy of the Executive Summary for this report
is available at TBR's Web site at www.tbri.com (go to the Press Releases section, and look up this
press release).
Contact:
Technology Business Research, Inc.
Julie Perron, (603) 929-1166
perron@tbri.com
or
Ed Wagner, (650) 712-0355
ewagner@tbri.com
or
Jon Lindy, (203) 426-7172
lindy@tbri.com
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