As technology sprints to keep up with the millennium, IT newcomersld - but we often have no real idea what such words mean. When is a Var not a systems integrator but a Vap instead? And does it really matter? may find themselves confused and lagging in the reseller branding marathon.
Vars, Vaps, DMRs are now all common terms in the modern lexicon - gone are the days when all PC sellers were just dealers.
Welcome to the channel terminology olympics, where no sooner have you got to grips with the latest names than there's a new acronym competing for a place a few hours later. So what do vendors and distributors mean when they refer to the channel? A general definition is anyone involved in the root to market of PCs.
The branding of resellers within the channel can prove more than a little confusing. Although it is in our nature to label and differentiate, terms lose their value if they fail to convey what the user wants to know. Take the universal term, dealer. Such jargon can be interpreted in different ways.
Nick Pye, managing director of distributor Midwich Thame, says it is far from his favourite term because it conjures up images of used car dealers, wheeler dealers or Del Boy. Pye prefers the good old standby term reseller.
Mario Demacio, sales manager for systems integration at 3Com, says the term dealer hasn't been used for some time at the networking firm, but many of the other channel terms are in circulation.
Lotus refers to the whole area as the 'partner community'. But, as David Thorpe, manager of partner marketing at Lotus' and IBM's Partner Organisation points out, it doesn't seem to be in use anymore: 'It reflects a part of the channel that has moved on and developed.'
Thorpe also claims it is impossible to segment by terminology. Customers and industry alike are often confused by the meanings, according to Alex Pidgley, marketing programs manager at Toshiba. 'The trick is to use standard terminology and put the market into sectors on the back of categories recommended by research companies. But it is vital to stick with just one classification because there are so many definitions.'
There are a lot of grey areas where this jargon overlaps. Where does one term stop and another begin? Any self-respecting vendor or distributor might find themselves losing sleep over the difference between a Var and a systems integrator. It varies according to definition, but most resellers are Vars, that is, they add services such as support or training on top of supplying products.
Pye says: 'To Midwich Thame, a Var buys hardware, probably owns its own software and provides support for both.' A systems integrator is normally a larger kind of Var which provides a full system.
It ensures commercial computer systems fit with manufacturing systems, the software and computer match, and takes into account hardware and customer needs.
Some distributors though don't differentiate. James Wickes, managing director of Ideal Hardware, says: 'Personally, I don't distinguish between the terms Var and systems integrator.'
Other industry players do use them, but admit they can be problematic.
Pye says: 'We officially use terms like Vap, another word for Var, if we want to qualify a reseller further, but they can convey confusing signals.'
You can't draw a definitive line where Vars stop and systems integrators begin. One man's Var is different to another's. Definitions can also prove a bit confusing because a lot of companies in the channel are into more than one market. For example, a company could be a systems integrator that sells networking. As Demacio points out: 'It's an odd situation because any firm can call itself anything and can label itself in such a way that makes it stand out from the crowd.'
Most seem to handle the overlapping by developing their own categorisation, accreditation or terminology - of which resellers are often prepared to pay for inclusion. Vince Smith, IBM marketing programs manager, says terms like Var are around but have no legal standing. 'We only use two official terms within the firm: reseller - that is, any firm that wants to sell our products; and business partner - dealers that have a direct relationship with IBM, such as Computacenter, Elcom or SCH. This is part of our strategy to simplify doing business with IBM.'
By reducing terminology, IBM doesn't have the hassle of separate contracts for one company, which may qualify for more than one category, and can finalise everything into one contract.
Lotus, which merged its programme with IBM at the start of the year, requires resellers to go through basic training in Lotus products and pass exams before becoming Certified Lotus Professionals.
Microsoft has, in its own inhibited way, set up an own-brand programme for the channel, where organisations become Microsoft Certified Solution Providers, or MCSPs. To qualify, a reseller must be trained in the company's products, get certified and enrol. The status also costs MCSPs an annual membership fee of #950 plus VAT. It operates on two levels - the majority of MCSPs belong to the members' scheme, which Microsoft launched in 1993, but the higher levels may be nominated to become partners - a programme available since January last year - and receive extra benefits.
Peter Harborow, UK manager of Corel, says the key lies in questioning resellers: 'Once you have established what they provide, you can determine where they stand in the reseller world.'
3Com is one of many vendors with its own accreditation. Demacio says: 'We divide the channel into three categories - networking partner (NP), solutions partner (SP) and advanced solutions provider (ASP). This way customers know what level of dealer they're involved with.'
Novell is another vendor which prefers to use its own accreditation programme and segment people. Murrey Treece, channel and northern regional sales manager at Novell, says it uses mail-order reseller (MOR) and Var in every day conversation, but doesn't officially use terminology common in the industry apart from reseller.
Distributors also need to jump the hurdle of defining reseller types.
David Clark, marketing director of Computer 2000, says: 'The challenge for distributors lies in segmenting the market and then treating resellers accordingly. There will always be a crossover and it's difficult to pigeon hole.'
So Computer 2000 differentiates according to the type of business and the market which addresses, such as between retailers, direct marketing resellers (DMRs) and corporate resellers.
Some companies value the terms for business. 'For us, as a distributor, the terms help identify that someone could be a valid customer of Midwich Thame,' says Pye. He adds that on the back of this, distributors may decide to specialise in one particular area of the market, such as retail.
People tend to agree that the entire IT industry is suffering under the strain of too many terms and acronyms. However, Simon Fagan, divisional manager at CHS Electronics, believes that although there is a lot of jargon, the degree to which they become confusing depends on how well-established an organisation is in the channel.
One problem, according to Pidgley, is keeping track of new or unfamiliar words, for example, Vap: 'Manufacturers introduce new terms to differentiate themselves and resellers.'
Smith explains that, from a customer perspective, there are too many terms floating around and it can cause confusion. 'Customers having problems don't know who to consult - should they go to a Var or a systems integrator?
The terms had a place while the market was evolving, but now things are different.'
Smith says the time has come for resellers to move towards a more integrated approach service. 'The terminology has had its day. Integration is the key.' In the past, terminology such as Var did help people to distinguish between dealers, but their relevance today is questionable.
Treece disagrees with the view that there is too much jargon, arguing that it still serves a purpose and, after all, something is better than nothing for deciphering various brands.
'The terminology is active within the industry, but using the exact correct term is not critical,' he says. 'It's not a situation where corporates will refuse to buy from resellers if they're not called systems integrators or if their brandings don't correspond.'
In an ideal world, of course, says Thorpe, a more structured approach would rule out such debate. 'It would be great if we could arrive at a consistent set of terms that people used and recognised, which would change and develop as the industry develops.'
The pattern of past terminology seems to point towards an evolutionary process in the future, with the industry continuing to rebrand itself as it matures and resellers needing to get equipped to stay in the race.
'The channel is going to change quickly, which will lead to a new level of value add,' says Chris Lewis, corporate customer unit manager for Microsoft.
'It's waking up to the service need and it's up to resellers to skill up.'
DEALER - OTHERWISE KNOWN AS ...
RESELLER - The same as a dealer, now the preferred industry term.
VAR - Value-added reseller. A reseller can now generally refer to itself as a Var if it adds on any extra service. Usually refers to a smaller company.
SYSTEMS INTEGRATOR - Provides a full package, fits components together and includes things like putting in a network. Usually a multifaceted organisation.
VAP - Value-added provider. The same as a Var.
DMR - Direct marketing reseller. Sells through mail order.
MOR - Mail-order reseller. The same as a DMR.
SOLUTIONS PROVIDER - Advises customers on total packages.
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