The Value of VARs

— April 10, 2007

According to Steve Hilton, a VP at the Boston-based research firm Yankee Group, a number of small and medium-size companies have turned to value-added resellers (VARs), which essentially package together components from various technology vendors to create customized solutions. These smaller companies don't have the internal technology knowledge or large IT staffs to handle specific technology issues, and VARs can provide a great service in implementing specific technology solutions, Hilton explains.

CT&T, an Arkansas-based telephone consulting firm, serves as a VAR for Byers Engineering Company, which provides software solutions and services to the telecommunications industry. CT&T integrated its Byers Telco package into several independent telephone companies in the Midwest. To a wider audience CT&T represents Byers Engineering products based on its extensive knowledge and experience with its telecommunications customers. Tim Finefield, operations manager at CT&T, is available to his clients 24/7 by cell phone. Or he might just show up in person if a phone call doesn't provide enough service.

"We have a more one-on-one rapport with the companies we work with," says Finefield. "They can catch me on the phone quicker than a big company that has developed the software. I feel that's a big advantage to them, as opposed to other products we compete against."

Expertise is another advantage CT&T has to offer. Finefield says CT&T's clients and customers appreciate that the people they're dealing with understand what "telephone" is all about. This thinking is in line with Hilton's advice: "I believe it's important to pick a VAR that has experience in your area of expertise," he relates.

The Role of VARs

The work that VARs can offer depends on a client's needs. VARs pitch new technology solutions if a company wants to upgrade an existing software package. They'll share different solution options and pros/cons of the solution. Companies also work with VARs to complete a particular project and integrate it with an existing solution.

"If you need to implement a technology solution that incorporates communications services or requires a variety of technology pieces in the solution, a lot of times VARs are great to help you do that," Hilton says. "They not only select products but also do the required implementation or integration."

Hilton says VARs also provide businesses with a choice of technology brands for certain products from an unbiased view. VARs can select the best solution from the vendors they represent, while individual vendors will often push their own products.

Doug Houser, VP of sales and marketing at DBK Concepts, a Florida-based VAR that partners with several mobile data-collection solutions, says those VARs that are truly making money wrap some service around their product offering and are not just selling out of a box. This might be pre-sales consulting or post sales such as repair, warranty and software maintenance.

For example, DBK Concepts developed a mobile solution for the Florida Department of Transportation (DOT) and its fleet of tow trucks, called Road Rangers. The state offers this service to keep traffic flowing on major highways and keep patrol officers from dealing with minor breakdowns. DBK selected rugged laptops from Xplore Technologies (a DBK partner company) for its trucks. It also integrated GPS software and wireless communication into the solution to track each truck's location.

"The installation and repair work for them afterward--in their eyes--has turned out to be more valuable than the initial consulting," Houser says. "They just don't have the manpower to do this otherwise."
Broad Sky Networks, an Oregon-based satellite broadband reseller, is one of the first VARs to work with WildBlue, a Colorado-based provider of high-speed Internet via satellite. Although customers pay a bit more to use the VAR services of Broad Sky Networks, president Mike Mudd says this provides them with the ability to have a national vendor for all their far-flung sites where cable or DSL are not available.

"When companies want to find a vendor to integrate and deploy a business-class network to support their sites, they will look to a VAR to help accomplish that," Mudd says. "We add VPN security and additional installation and support for WildBlue clients to properly integrate them back into a corporate network."

Campgrounds and resorts work with Broad Sky Networks when they want to provide Internet connectivity to guests. The Washington DOT is another client using Broad Sky Networks as a VAR for WildBlue. The state maintains a remote monitoring site in a rural ski pass. A control tower with a WildBlue dish attached to it provides information back to the Washington DOT, enabling it to check if the ski area is passable. Updated photos are provided by WildBlue via Broad Sky Networks.

"WildBlue does a good job supporting their VARs and their clients and putting those two together based on expertise in their specific market," Mudd says.

Choosing a VAR for Mobile Support

VARs and systems integrators ranked as the most trusted providers across all mobile support services in late 2005, according to a study by The Telecom Intelligence Group, titled, "Mobile Communicators in the U.S. Workplace." VARs ranged from 28 percent to 37 percent as the preferred providers, depending on the specific support service. Yet its research in October 2006 revealed a significantly lower level of preference for VARs as a mobility support partner. Participants ranked wireless service providers the preferred mobility support partner at 37 percent, with VARs falling to 7 percent.

The same research revealed that the top factors influencing the selection of a mobility support services partner were:

  • the ability to provide a believable view of ROI;
  • the ability to address all wireless communications elements (devices, infrastructure, applications, etc.);
  • the availability of service level agreements;
  • a single point of contact and accountability; and
  • an agnostic take on technology, carriers and vendors.

Among the least influential factors were the lowest price, customer testimonials and staff certifications.

Yankee Group's Hilton says he's also seeing VARs realize they need to offer broader broadband solutions; they tend to either partner with VARs or acquire other VARs to offer larger solution sets. Says Hilton, "I think we'll see more of that in the next two to five years."

Vicki Powers is a freelance writer specializing in business and technology.

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