April 15, 1999 09:00 AM
HAMPTON, N.H.--(BUSINESS WIRE)--April 15, 1999-- Direct Vendors, Local VARs, and Inacom Rated Best Overall Channel Partners Among Corporate End Users; Relationship Problems Between Channels and Systems Vendors Intensify
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 DELL and Gateway GTW , 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 ICO , two good to average partners, Compucom CMPC and MicroAge MICA , and three corporate resellers for whom several specific areas of weakness emerge - GE Capital, Vanstar VST , and Entex. The weighted customer satisfaction scores, with the hypothetical perfect score set at 100 points, are listed in the table below.
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 CPQ , IBM IBM , and Hewlett-Packard HWP 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).
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