VARs and IT Consultants Take Heed: Performance Trumps PriceBy Pedro Pereira | Posted 2008-09-04 Email Print
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A new Aberdeen study concludes customers are more interested in applications that work than in cost savings, a lesson that VARs, IT consultants and solution providers should take to heart.
It’s always nice to save a few bucks, right? But faced with the
decision of quality versus price, the wise buyer will pay a little more.
Wise buyers are made, not born. So it takes some experience to get this right. Wise sellers, though, are a different matter.
In the realm of managed services, if a recent study by Aberdeen Group is any indication, the wisdom lever is tipping toward buyers. It seems customers have gotten wise to the importance of quality over price.
The Aberdeen study concluded that saving money remains important, but customers are happiest when the technology does what it purports to do. They get positively tickled when their applications load quickly, perform as they should and don’t crash.
Customers can be crazy like that.
Of course, they are not turning their backs on a bargain. "Decrease in networking cost" ranked second in the list of drivers for adopting managed network services, according to the study. Thirty-five percent of respondents picked the cost criterion as a managed services performance indicator, while 37 percent picked application availability and 28 percent, application response time.
Network hardware uptime garnered a 27 percent rating, curiously enough. Yet, uptime is the most common measure in the SLA (service level agreements) that service providers offer customers.
With that in mind, it’s no wonder that almost half of the Aberdeen study participants – 46 percent – indicated they are dissatisfied with the level of service they are getting.
The study points to a disconnect between service providers and customers, says Bojan Simic, an Aberdeen research analyst who authored a report based on the study.
"I really didn’t expect this type of disconnect between what end users want and what the service providers are offering," says Simic. "It is application performance that will drive satisfaction up," says Simic, who adds he was struck by the results.
Providers tend to emphasize network uptime and cost savings, but customers are moving beyond that as their needs increase. They consider uptime and savings a given, and now they want to make sure the applications perform well.
The study polled IT staff and senior management from companies of different sizes. About one-third of companies were enterprises with revenues of more than $1 billion, another third were companies with revenue between $50 million and $1 billion, and the remaining third were companies with revenue under $50 million.
Company size and the type of service provider used by the company plays a role in the study’s results. In a future study, Aberdeen will measure satisfaction levels by provider type – telco, equipment vendor and solution provider or system integrator.
I could speculate on how that might turn out, but I’ll be patient and wait for more concrete data.
What we know for sure now is that providers’ service guarantees aren’t exactly matching customer priorities. Clearly, a re-evaluation of services, tools and SLAs is necessary on the provider end.
Providers should take heart that uptime isn’t as big a priority as it used to be. When something works, customers tend to take it for granted and focus on other areas they want to improve.
The challenge for providers is to make the necessary adjustments.
Pedro Pereira is editor of eWEEK Strategic Partner and a contributing editor for Channel Insider. He is at email@example.com.