Blurring Lines

May 20, 2011

Q: I’m worried that the lines are blurring between manufactures and integrators. We are seeing our end-user clients contacting the manufacturers directly. Is it because of consolidations and mergers? Is it one more thing for us to be worried about, or do you see the manufacturers maintaining boundaries and loyalty?

A: Well, this question/answer will surely flood my inbox… No, in my perfect world, something like this would never happen. Now, in the real world, what seems to be a concern is the purchasing model and decision-making moving more toward an IT model. In the IT world, sometimes (not always) there is pressure from above to make significant technology purchases as close to the original developer or manufacturer as possible. What happens in this scenario is that the end-user — say a hospital or hospital buying group — needs accountability and assurances to guard against product obsolesce and to ensure bugs, upgrades, patches, etc. get immediate attention for years to come. I’m seeing requests for technology and long-term warranty bonds. I suggest integrators be very careful when requesting this type of bond as it may extend well beyond their contracted warranty period.

I don’t see any direct connection yet to this being driven by mergers or consolidation. I see the end-user motivation for doing this more as being able to hold the technology provider/manufacturer directly responsible without any finger-pointing or in case the integrator who originally installed the system lost that product line, had financial problems, left town, etc. The rub often comes when the manufacturer extends these five- and 10-year warranties when the integrators only provide labor for the one-year period as specified in the contract. If an end-user knows the product has an extend warranty period then, naturally, they want that passed through. Who covers the cost for your labor? What is the exposure to the integrator in that situation?

Will the manufacturers honor the traditional boundaries and our channel? I sure hope so. For that to happen, though, we need to provide value in each and every transaction and demonstrate to both the end-user and manufacturer that our role is absolutely necessary. If the integrator becomes more of an obstacle than a value-added resource, then we all should worry. The vast majority of NSCA members can prove their value beyond a shadow of a doubt. And, they can prove it even when their pricing differential becomes exposed. My job is to make sure we all stay ahead of this and keep proving that our channel is the very best choice to deliver systems technology to the end user. — CW

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