Acts of Desperation?Acts of Desperation?

Last year, I noted in Costco Wants In Too that vendors are doing anything to gain market share in the IPT space. I can't fault Costco for that, but what I can't help is even though the gear is good- in these spaces, it almost always is installed poorly. Sure they get a deal, but is it really a deal after it's been installed- maybe one year later?

Last year, I noted in Costco Wants In Too that vendors are doing anything to gain market share in the IPT space. I can't fault Costco for that, but what I can't help is even though the gear is good- in these spaces, it almost always is installed poorly. Sure they get a deal, but is it really a deal after it's been installed- maybe one year later?Again, Costco is doing more deals but this time with Mitel and Microsoft, again in the very-small SMB space. In the Mitel venture they are hawking the AccessLine Digital System 1000 and it's loaded with features and value. Then, in the Microsoft deal, they will offer the Quanta Computer's Syspine Digital Operator Phone System powered by Microsoft without Active Directory- and it's an IP-PBX. Last year, Costco offered the SimpliPhones system, which is now being sold on Ebay, Staples and just about everywhere on the Web.

So what does this mean?

For the dealers and VARs, just take a deep breath. First, remember that two tin cans and a string are still good sales tools. But the real lesson is remembering that down and dirty as these wares may or may not be- it's not your problem. Instead, they are opportunities. Remember the KSU-Less systems that are still around? The same rules apply- these customers may one day grow up and into bigger requirements. Until then, when the gear is installed wrong and when it does come up with issues- who will they eventually call? Service opportunities will abound as they did in the KSU-Less space. Wouldn't you rather sell time (billable) than nothing? The other profitable mark on these customers is that they will install many of the wares incorrectly without battery back up, grounding, AC and circuit protection, and then on the data side mistakes abound too. This all equals REVENUE.

For the factory guys, you can get more market share but it's only temporary. When these customers look back after their growth stage, they do have a tendency to remember their past "phone experience." This is often when they will break away from the manufacturer and move to another. So whether or not your products- such as what's being sold by Costco, Ebay, Staples and the many other retailers- can support a solid migration path through the customer growth and change cycles remains challenging. Will these sales earn your company loyal customers, or are they just padding your market penetration numbers? Then, will these products (branded outlet deals) help or hurt your branding or corporate image?

For users (customers) beware. Buy short today and I will get your cash later, or another dealer or VAR will too. The smarter thing to do is look at these deals but then consider outside resources for installation and support. Just about anything can work as a phone system, but if the installation is haphazard so will your business front be- meaning the phone system is the doorway into your business. Make it shine.

Plug and play isn't what it's cracked up to be and at least you can start off with a better installation environment by hiring a pro. There's nothing different about the channel behavior than yesterday or 20 years ago. and that includes the human behavior and realization that you always get what you pay for.