Trends Report

SMB IT Channel Preferences

Direct From The Manufacturer Dominates

January 24th, 2007
MS
Michael Speyer
With contributors:
Heidi Shey , Merv Adrian

Summary

Small and medium-size businesses (SMBs) purchase hardware and software through a wide range of channels. Channel preferences vary by company size and product type. The reasons for selecting a particular channel include price, product availability, and providing IT skills that SMBs don't have. Direct from the manufacturer is the most popular channel for purchasing commoditized products like PCs and servers. Value-added resellers (VARs), systems integrators (SIs), and various retailers (online and brick and mortar) also move large volumes of IT products. VARs and SIs succeed at solutions sales and at selling more complex products like networking. Vendor channel management programs should focus on making VARs and SIs successful in the customers' eyes to build long-term, profitable business relationships. Overall, SMB channel preferences have not varied much over the past 24 months. Brick-and-mortar retailers are the exceptions; they have become an insignificant presence for hardware sales but remain credible in software sales. Availability of financing has little impact on channel choice, although this can help accelerate deal completion.

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