Purchasing Virtualization with VARs

[wgm3446]

I'm fairly new with the purchasing process of SAN solutions and virtualization. If anybody could tell me if this is accurate and possibly the proper procedure in purchasing equipment would be helpful.


We are looking at going from physical to a virtual environment with a SAN and VM hosts at the colo and a lightweight version at HQ (we are SMB with ~50 Employees). Replication and Backup Solutions included for DR. We reached out to a few VARs for pricing. One being a Tier 1 vendor (not saying who). Then we reached out to some local partners of Tier 1 to purchase, install, and service the equipment.

When the local partnered VARs tried to give us pricing they could not give us accurate hardware pricing because "another vendor" (being the Tier 1 vendor we reached out to first) has locked access.

Tier 1 explained to me, that 1 single VAR is locked into Tier 1 vendor unless I request them to relinquish the previous vendor. The whole purpose to that is so all partnered vendors are not competing against each other and everybody has their "fair share".

I remembered when you could just call up like 10 vendors and request bids for a solution and you pick the best priced/service.

Why has this changed? And how the hell am I supposed to get appropriate pricing if 1 vendor is locked into an account and others can't? Seems like I, the customer, cannot get competitive pricing anymore.

 

[Child of Wonder]

Yes, when we talk to a client about a vendor (Netapp, EMC, etc.) we register that sales opportunity with the vendor. This gives the registrar a price advantage over other resellers until that registration expires or is removed.

As a new customer, you're going to get competitive pricing if you go with a reputable and decent sized reseller. They want your business. Don't forget, the first numbers they give you aren't what you have to pay. Feel free to negotiate.

Working with a VAR is as much about trust as it is about pricing so make sure you select someone with a good reputation and a proven track record of success. Talk to your friends in the industry about who they recommend.

 

[geiger]

I tend to look at it this way, vendor 1 did the legwork of getting in the door and providing a solution. If you took the spec they provided and went to vendor 2-8 and they just provided a quote based off of skus they are getting the sales minus a point or 2, which they don't have to throw towards PS.

You could have 8-10 different "projects" though

 

[NetJunkie]

You can still get pricing from 10 different vendors. Don't talk to a VAR. Send out a RFP and get proposals back and choose the one you want. The problem here is you can't expect a VAR to spend a lot of timing properly sizing and designing a solution only to have you turn around and hand the bill of materials to like CDW who is happy to make 2 points on a deal. They'll steal the deal if they can...so manufacturers have given deal registration to partners for years.

There are ways to hold off on registration. As a customer you can tell the manufacturer rep to hold registration until you decide on a partner. Most likely you won't get the same level of attention from the VAR since it's a risk. It really depends on a few things....

You can SOMETIMES tell a manufacturer rep to take registration away from a partner but that's rare. We have contracts in place that makes that a bit tricky.

 

[Thuleman]

Why has this changed? And how the hell am I supposed to get appropriate pricing if 1 vendor is locked into an account and others can't? Seems like I, the customer, cannot get competitive pricing anymore.

Like NetJunkie said, if you want competitive pricing then put out a request for proposals.

If a VAR puts in the time to design your system for you they want to (and should) get paid for their effort.

Alternatively you can do the design yourself and then just ask someone to sell you the gear. This works well if you know what you are doing and if you know what exactly you need.

What I would do if I were in your situation is to ask businesses in your area which have gone the virtualization route whom they used to do it and how happy they were with the service.

I have a mixed relationship with VARs, there's a reason a lot of those guys pull 150k+ a year plus bonuses, and that reason is that you not only pay an hourly rate for their time but also pay a premium on the hardware. When you get good service and good advice then there is no problem as they earn that money. The problem is when you are treated as third class citizen just because you don't buy dozens of SANs per year.

 

[Deleted member 16178]

They call it a VAR for a reason. There is a cost for the value added.

Sounds like a small environment. You may not even need a VAR to architect it for you...

 

[wgm3446]

Thanks for the answers guys! We definitely have the knowledge to do it ourselves. It's just the Man power. It's literally me and one other guy, and we have 50 other responsibilities and unfortunately don't have the time to dedicate our time solely devoted to the project. Which is why we're in a way, looking for somebody else to implement.

I think I'll go down the RFP route. Thanks again!

 

[NetJunkie]

Couple things.

1. Most of my customers are very smart and have the knowledge....but like you they don't have the time. Nothing wrong with that.

2. You may be too late for RFP if a partner already has registration. Pulling reg from a partner isn't simple. If you had material contact with the partner and discussed the project they rightly have reg. Manufacturers can play some games to help another partner try and compete but....that's not well received and honestly, they aren't going to do it for a new smaller customer.

Unless a partner does something bad or you just don't want to work with them I doubt it'll get pulled. The manufacturer can ask the partner to let go of the reg..and we've done that...but they won't have to do it.

This is why I always warn my customers about who they talk to first about a project.

 

[QHalo]

I have a mixed relationship with VARs, there's a reason a lot of those guys pull 150k+ a year plus bonuses, and that reason is that you not only pay an hourly rate for their time but also pay a premium on the hardware. When you get good service and good advice then there is no problem as they earn that money. The problem is when you are treated as third class citizen just because you don't buy dozens of SANs per year.

Felt this before for sure. Such is the life of an SMB.

 

[NetJunkie]

Felt this before for sure. Such is the life of an SMB.

And such is the life of a VAR. What you'll find is that SMB customers are often more work than a Fortune 500 customer. They are so budget conscious that they want to see 20 different configuration options and tons of revisions. In the end you make 5% of the margin on that deal as you would a huge deal and the time invested is the same.

Two ways around that.

1. We have pre-built configs for SMB. Either they fit or they don't. If you said you had 100 servers you want to virtualize I'd have a pre-built config we could adjust a bit...but I'm not going to do 20 different configuration options.

2. Have SMB focused sales teams..which we've also started to do. My best pre-sales guys are costing us many in a SMB account. So we'll have the newer guys handle SMB. The only time that's a problem is if a SMB requests a specific person and they are one of my enterprise guys.

 

[Thuleman]

And such is the life of a VAR. What you'll find is that SMB customers are often more work than a Fortune 500 customer. They are so budget conscious that they want to see 20 different configuration options and tons of revisions. In the end you make 5% of the margin on that deal as you would a huge deal and the time invested is the same.

As customer I would appreciate if a VAR would just be up-front about that. If they would come out and say "listen, we can't spend a lot of time on your stuff, we can look over your ideas, give you a little advice, and get you a good deal on gear, but you'll have to do the design", or something along those lines.

What happened to me instead is that a VAR actively tried to sell me a blade system, without any actual design work, for significantly more than I could just order it from Dell for if I were to go to the web page myself. Tough to not feel slighted as a customer when shit like that happens. Or how about that EMC partner that says that they can't get a quote from EMC on storage but they are happy to just sell me an EQL instead even though I asked for a specific EMC array.

I am a firm believer in capitalism and that people need to get paid well for the work they do. I just get miffed when they don't do the work and don't pass on the savings either.

Though I think that's all a learning experience. My interaction with VARs (other than recently going through the process of joining one just to find out that the position would require to live out of a hotel 20+ days a month) is now limited to me sending over specs and them sending over a quote I can give to purchasing. That seems to work well for both sides.