Side Streets

By SmallBusinessComputing Staff | Posted June 01, 2000
by Keith Kirkpatrick

Despite all of the noise pc vendors make about the virtues of purchasing directly from them, there are other avenues worth exploring. While buying straight from a manufacturer has its advantages, (see the main guide) many customers, especially small businesses, will find more value in other purchasing alternatives.

Among these is the choice to buy from Value Added Resellers (VARs) or other third party consultants that offer an added level of hand holding, as well as customized solutions and support options.

Another new option is buying from dot-com companies that are making a push to provide what they call "subscription-based computing." These companies offer solutions at a per-workstation fee for a complete hardware, software, and maintenance package.

Retail stores are another possibility. CompUSA, Office Depot, and other chain stores are getting in on the action, selling PCs and services designed for the small business market.

WHAT FOLLOWS
For this Buyers Guide we spoke to two VARs and we quizzed them on their range of offerings. We also talked with their customers in an effort to gauge their overall satisfaction with their purchasing experience. We then followed the same procedure when talking to the dot-com companies.

When it came to exploring the retail options, we tried to touch upon what they have to offer. Unfortunately we were able to have only limited conversations with the retail chains. However, retailers like the two we discuss, along with various independent stores scattered throughout the U.S., are valuable resources that should not be overlooked.

THE VALUE OF RESELLERS
Traditionally, small businesses have turned to VARs for assistance when setting up networks. They are typically certified and have expertise in installing and supporting specific hardware brands. Plus, in many instances, they can provide faster response to service calls than vendors.

VARs sell service, first and foremost. As a result, the total price of equipment, installation, training, and any other service, is going to be higher than if you went into a retail store and picked up the PCs, or called a vendor direct.

Purchasing directly from vendors may initially seem to be cheaper, however, in many cases it can prove to be far more expensive. While the hardware is relatively cheap, the additional costs (software, installation, and maintenance) may be just as costly as using a VAR, if not more so.

VARs sell themselves on the concept that direct vendors just sell buyers equipment, without really listening to their concerns and taking the time to determine what is actually required and appropriate. VARs, however, do take the time ­ which you pay for ­ and the end result is a customized setup and a working relationship with an integrator. Purchasing through VARs is a highly beneficial option for small businesses with minimal or no internal IT support.

If you do choose to use a VAR, be aware that many only work with specific vendors. As a result, they often get preferential pricing because of the number of systems they purchase for their clients. More importantly, vendors that deal with one or two specific brands tend to know them very well, and have the experience to know which problems tend to crop up and how to fix them quickly ­ without needing to go through lengthy and costly diagnostic sessions.

The best way to locate a VAR is to ask for recommendations from other businesses that are similar in size and requirements to your company. It's also possible to select a hardware vendor and ask them to suggest a few local VARs that work with their products. Then be sure to call each one and get references.

Finally, the Internet is a great way to track down VARs. Using any search engine will result in a list of countless VARs in specific areas. But the same rules apply. Get references and evaluate the type of companies they have worked with previously.

The Lloyd Group, New York, N.Y. (www.thelloydgroup.com)
Joseph Bulger, managing director with BCRS LLC, a New York-based accounting firm, decided to purchase a complete installation of about 18 computers and three servers. The company turned to The Lloyd Group for assistance.

The Lloyd Group, like many VARs, completed an onsite inspection at BCRS, came up with a recommended configuration for the company, and handled all aspects of installation, setup, and monthly maintenance on the network.

"We're tax accountants," Bulger says. "We can't afford to lose any time. We needed the expertise in setting up our network, and the assurance that 24-hours a day, including Saturday and Sunday, someone could come in to fix a problem if needed."

The Lloyd Group was founded in 1995 and primarily services small- and medium-sized businesses in the New York metropolitan area; the company also has clients in other locales around the country.

"We're a real service-oriented company," says Adam Eiseman, the company's founder. "We don't force our clients to buy the hardware we recommend." Customers can purchase products from other vendors, including direct vendors such as Dell, but because the company exclusively sells Compaq machines, it is very experienced in servicing and supporting Compaq's hardware. "If customers do buy Compaq hardware, we give them a 5-percent discount [off] our labor [charges]," Eiseman says.

"If we go out to support a Dell machine, we might not know all the issues," Eiseman says. "Plus, if it's a Dell warranty issue, they're paying us to sit on the phone with Dell."

Currently, for most business-productivity applications, Eiseman recommends using a 500MHz or 600MHz Pentium III machine mated to 128MB of RAM, 16MB of video RAM, and a 13.5GB hard drive. He adds that most clients should go with a 17-inch monitor or bigger. They should also opt for Windows NT over Windows 98, because NT is more powerful and can easily be upgraded to Windows 2000, a more robust and stable operating system.

In many cases Eiseman suggests leasing PCs to clients rather than purchasing, given the relatively short life cycle of technology equipment. "I recommend that my clients lease," Eiseman says, noting that while his company doesn't directly provide leasing services, Compaq has a leasing program, and he often recommends banks that have provided leasing services to other clients. "Three years is optimal, because the machines are covered under the warranty for the whole time."

Eiseman says that a typical client can expect to get a quote on a full installation (workstations and servers) in about a week, which will include three or four different options and the pros and cons of each. Customers are also encouraged to purchase blocks of service time in advance, in increments of 10, 30, or 60 hours, to ensure that if a problem comes up, The Lloyd Group can respond. The company also provides a twice-a-year maintenance service, at which time it provides routine preventative maintenance, upgrades, and other work on each workstation.

In the end, Eiseman recommends that anyone looking to work with a VAR should not make the decision based on price alone. "Look for someone that you can have a relationship with," he says. "Someone who is going to be there for you and isn't going to sell you a load of junk."

Aztec Systems, Carrollton, Tex. (www.aztecsystems.com)
Aztec Systems of Carrollton, Texas, is making a name for itself in the Dallas-Fort Worth region. Like The Lloyd Group, Aztec Systems is focused on providing more than just cheap PCs. "If you are interested in just getting products, you're better off going direct," says Tim Bryan, Aztec's vice president of sales. If, however, more is needed, VARs are the right place to look.

Typically, Aztec will do an onsite inspection and meet with a client to determine what equipment is best suited for the company. A PC installation will only take a few hours to generate a price quote, Bryan says. More complicated situations, such as integrating or migrating legacy software systems to standardized back-end software can take more time, but usually results in superior value for the customer.

The Dallas Arboretum & Botanical Society Inc., a botanical garden with 55 employees, sought out Aztec in May 1999 to upgrade its entire system of networks and PCs. The challenge presented to Aztec was to network the society's two houses and two trailers so it would have internal e-mail and external Internet access. Plus, there were several mini-networks already operating within this environment, but none of them operated under the same operating system.

"We take a look at what clients already have in house," Bryan says. "For small businesses with legacy software, there's a lot of transitioning going on, and those are the type of customers weare best for."

The coordinator of the project, Tracy DeVage, is the director of finance for the Dallas Arboretum, and admits that no one on staff had the expertise for such a complicated project. "I'm a certified public accountant, not an MIS guru," DeVage says. "I got the job as head of technology here by default, because I know how to turn on a computer. There was no way I could do it myself. And we knew this was not an easy installation."

Aztec solved the situation by connecting the two servers located on either side of the property via routers and ISDN lines, and then connected approximately 25 PCs to the servers.

Aztec Systems generally uses Compaq and Hewlett-Packard desktop computers because they know the brands and can support them better than other equipment. Bryan recommends at least a 500MHz Pentium III system with 128MB of RAM, and an 8GB hard disk for most applications.

"Right now, the sweet spot is a 500 MHz system," Bryan says. "The sweet spot is the point at which the processor is highly available, yet the cost is low."

In addition to installing and configuring PCs and servers, Aztec Systems offers a value-added service called Acute System Monitor, which provides remote access and system monitoring of software and hardware. Currently, pricing is set at $50 per month for server installations and $8 per month for each workstation.

"Resellers are always going to be here, because some small businesses do not have a full-time support staff," Bryan says. "Most can get a basic setup running, but to get it running optimally, an expert is usually needed."

In all, Dallas Arboretum found Aztec very helpful and pleasant to deal with and responsive to most problems. "Fortunately, the guys I dealt with at Aztec were patient and responsive," DeVage says.

DOT-COMS
Several Internet-based companies have introduced subscription-based PC procurement systems that allow small businesses to get fully configured and supported hardware and software for a single, per client monthly fee.

Typically, the subscription fee is between $150 and $250 per PC, per month. This can get expensive in larger installations. However, for smaller firms with no internal IT and a small number of PCs that need to be managed, these services may be just the ticket. We take a look at two such services.

Companies in this category usually offer two to three standard contracts that include a PC, an O/S, business application software, routine support, and upgrades for a monthly fee. Should any problem arise, it's simply a matter of calling the company and having them either work on the problem remotely, or having them send out a technician.

Also keep in mind that if legacy and custom applications are in place, these companies may have a hard time supporting them, even though they say they will. Custom setups may best be left to VARs and other specialized professionals.

Everdream Corporation (www.everdream.com)
Everdream provides a monthly subscription service based on a fixed configuration, says the company's chief executive, Gary Griffiths.

Currently, that configuration consists of a Pentium processor, 128MB of RAM, a 17GB hard drive, 16MB Video card, 10/100 NIC Card (Intel), 56Kbps modem, and a 17-inch monitor. According to the company, this configuration will change as new and faster technologies arrive.

While Microsoft's ubiquitous suite of Office productivity tools are standard, customers are able to add any third party applications they like.

In addition to getting 24/7 technical support, the $150 per month, per client subscription fee covers a variety of add-on services, including unlimited Internet access, which includes DSL for free with a minimum of 10 PCs per office. Everdream also includes automated remote daily backup of all files and data, data migration to the new PCs, free online training, and software management and upgrade services, which ensure users always have the latest version of the software.

Everdream actually works with VARs to install and set up PCs and networks so customers aren't stuck with a bunch of PCs they can't get running. Currently, the company is only officially working with VARs in northern California, but it also has distribution agreements with national companies such as Ricoh Corporation and Concentric Networks.

"I think it's a fabulous service," says Diane Hayford, president of Skyline Design Studios, a four-person, Palo Alto, Calif.-based landscaping firm. Hayford signed on as a beta tester in September 1999, and has had nothing but praise for the service.

"By and large, I haven't had many problems," Hayford says. "When I did have problems, 99 percent of the time they were able to take care of them over the telephone or by using the remote-access technology."

The contract is set for 30 months, at the end of which a new PC is shipped, ready to go, Griffiths says. Startup is also fast. Everdream claims a period of two days between the time a Web order is placed and the PCs are delivered.

Center Beam Incorporated (www.centerbeam.com)
CenterBeam.com also provides a subscription-based service via its Web site. Using Dell desktops, the company provides current-level, Pentium III computers and a host of Microsoft productivity software that is customized to each business' needs. Like Everdream.com, CenterBeam provides equipment for a monthly subscription fee, and handles all required support and upgrade work throughout the life of the three-year contract.

"We're trying to solve the IT complexity issue by offering a complete computer-subscription service," says George John, the vice president of CenterBeam. John notes that the average cost per PC will run about $200 per month. However, the cost also includes the setup of any sort of networking, Internet access, configuration, and backup services that are required, allowing businesses to focus on what they do best.

Core Media Connect Inc., a 10-person technical-recruiting firm based in San Francisco, Calif., decided last September to move to a larger office and wanted to upgrade its computer equipment as well. But instead of simply purchasing PCs from various manufacturers and trying to get them to all work together, the company decided to use one supplier to procure and manage their infrastructure.

"We went with CenterBeam because we don't have an IS person on staff, we contract someone for specific problems as they arise," says Claire Prymus, the vice president of Core Media. She adds that the biggest issue for the company was to make sure the system could be maintained as simply and easily as possible with minimal effort on Core Media's part.

"We're not very technical at all," she says. "I'm not sure if it's a big cost savings for the equipment alone, but it's a huge time savings, which allows us to go about our business."

While CenterBeam uses local VARs to handle the initial installation of computers and servers, it manages the day-to-day support tasks, such as supplying fixes, downloads, and software updates through a remote link. Backups are also handled this way.

If there's one drawback to the subscription model, it's that generally speaking, customers need to be located in an area served by a VAR that works with the dot-com service. Currently, CenterBeam services clients in Phoenix, Ariz., San Francisco, Calif., and the surrounding areas of San Diego, Denver, Detroit, Dallas, and Washington, D.C.

On the plus side, there's no fear of obsolescence. "Computers are outdated the moment you buy them," Prymus says. "But with CenterBeam, you get an upgrade whenever you need one."

RETAIL
With all of the other options available today, there is still some merit to good old retail shops like CompUSA and OfficeDepot. Not only do they generally offer a greater selection of both hardware and software products, but some also include resources and guides designed specifically for small business owners looking to get the most out of technology.

CompUSA offers dedicated account executives that assist in selecting appropriate business equipment. Plus, these reps can also help determine purchasing plans, leasing options, and other payment arrangements to best suit individual budgets.

Another perk with CompUSA is its PC vendor program with IBM designed specifically for small businesses. For example, CompUSA offers IBM's Small Business Series PC 300GL machine. The unit sports a 350MHz Intel Celeron processor and includes Microsoft Office Small Business Edition and Lotus SmartSuite. Also included is RingCentral software for fax management.

Meanwhile, OfficeDepot includes a useful small business resource center on its Web site, which provides recent articles on many issues, including staffing, procurement of equipment and services, and information on setting up Web sites, as well as downloadable forms, spreadsheets, and helpful advice.

There are also literally thousands of local retail stores that can often provide advice, service, and special pricing for small businesses. It's wise to check around to see who offers the best package of deals on equipment and service.

The best way to find out more about retail offerings is to go to the stores, quiz the staff, and ask them what they can do to help. While prices are often fixed in national retail chains, smaller retailers can, and will, cut deals to get business ­ especially if you're buying more than a few PCs or copies of software. It's a worthwhile strategy, and a good way to initiate a relationship with retailers.

WHAT WE THINK
In all, the key to solving computing needs lies in your ability to gather as much information as possible about various providers. Generally speaking, VARs will offer the most comprehensive service and expertise, but most likely will also be the most expensive route. Dot-com companies that provide subscription models are less expensive, but can also be less flexible in terms of the equipment and the freedom to integrate existing equipment. Retail stores, while offering a greater selection of products, generally don't have the expertise in working with small businesses.

After you've compared what each can offer, make sure to get references. Once a choice has been made, make sure that you're satisfied and that they live up to their end of the bargain.

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