The VAR Guy

For a “dead” market, the break-fix IT channel looks pretty darn healthy, according to the OnForce Services Marketplace Index (OSMI) for 1Q 2009. Here’s the scoop, including perspectives from OnForce CEO Peter Cannone.

OnForce says 63 percent of the 1Q 2009 transactions in its online marketplace for VARs involved break-fix customer engagements, up from 59 percent in 4Q 2008. That data point — and additional hints about current IT channel trends — surfaced in the OSMI quarterly report today. Here’s the scoop and some perspective.

The nine-page quarterly report is filled with data points for VARs to digest. But these seven points kick off the report:

1. Total number of Break-fix events went up to 63% from 59% in Q4. The VAR Guy’s Spin: OnForce CEO Peter Cannone says companies are holding onto their existing hardware longer and new project work is harder to find. As a result, VARs that offer reliable break-fix services will be first in line when new project work accelerates during the economic recovery.
2. TV / video was the second highest volume category for onsite service in Q4; desktop computers ranked first for the third quarter in a row. The VAR Guy’s Spin: Businesses are cutting corporate travel. Consumers are skipping the movies and staying closer to home. In-office and in-home LCD screens and projectors are in high demand for video conferencing and entertainment. Plus, consumers/businesses are not going to make big desktop hardware investments until Windows 7 is available and considered a reliable operating system.
3. Hourly rates for point-of-Sale (POS) service dropped for the first time in  one year. The VAR Guy’s Spin: Some big retailers (Circuit City, etc.) have imploded, slowing demand for POS work. Solutions providers in the POS market should leap beyond the ordinary. Some retailers like Stop & Shop, for instance, now offer wireless point of sale devices (from Motorola/Symbol Technologies) for customers to use while shopping in the aisles. The POS devices actually reduce the need for checkout counter workers.
4. In Q4 hourly rates for voice over internet protocol (voip) fell below the national average; this changed in Q1 as hourly rates has now exceeded the average, although work order value fell in Q1. The VAR Guy’s Spin: That last sentence confuses The VAR Guy just a bit. But OnForce’s Cannone offered clarification. He says VoIP and bandwidth services continue to enjoy good demand, because that type of infrastructure can cut costs and improve worker productivity.
5. Hourly rates for projector onsite service were more expensive than every other consumer electronics category. The VAR Guy’s Spin: See item 2 above. Very closely related.
6. Ohio, Indiana, and Massachusetts were the least expensive states for onsite service in Q1. Hawaii, Delaware and Maine that were the least expensive states for onsite service in Q4. Hawaii and Delaware both moved into the top ten most expensive states. The VAR Guy’s Spin: Why the heck does The VAR Guy live in New York?
7. Houston, New York and Chicago saw more onsite service volume than any other city in Q1 of 2009 for the second quarter in a row. The VAR Guy’s Spin: Houston is a particularly interesting data point here. City-data.com says Houston is the sixth largest US metro area. Much of that recent growth involves hurricane survivors — business owners and consumers — who moved from New Orleans to Houston.

In a video interview, Cannone offered additional 1Q highlights for the IT channel. The VAR Guy wants to point out: OnForce spends considerable time describing how small VARs leverage the OnForce marketplace to book break-fix revenue. However, some very large service providers and PC companies use OnForce to outsource project work and break-fix work to VARs across North America.

Most of those big service providers and PC suppliers aren’t willing to discuss their use of OnForce — yet. But The VAR Guy suspects that will change as the marketplace continues to grow.

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