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Vendors and system integrators both cooperate and compete

Article-Vendors and system integrators both cooperate and compete

System integrators would be able to do very little good for their clients without the technology provided by automation product vendors. Conversely, many vendors have realized that their products alone won't satisfy an end user's automation needs. Someone has to assemble all of the pieces and make them work together.

There was a time when the vendors themselves would provide all of the required design and installation services for end users who lacked the necessary technical resources in-house. Early automation products weren't typically all that sophisticated, but most were expensive and all were proprietary. Vendors enjoyed significant profit margins and could afford to include an engineer for free with “every box.” And they pretty much had to. No one else was going to be able to figure out how to make their products work.

But in recent years, many automation products have been reduced to commodities that most companies can afford and understand. Open-architecture hardware and Windows-based software combined with more competitive pricing have opened the door to third-party service providers like system integrators.

Having recognized this trend, virtually all major automation vendors have created partnership programs for carefully selected system integrators who receive special training, pricing and technical support. In return, these “certified” or “authorized” integrators are expected to recommend that vendor's products whenever possible. Some vendors claim that over half of their sales come through system integrators who either buy products directly or specify the products that the end user buys.

Conversely, the vendors and their distributors are a rich source of leads for their system integrator partners. System integrators generally tend to rely on referrals to find new work and distributors routinely learn of upcoming projects every time an end user inquires about a product. The synergy is almost symbiotic. The integrator gets a project on which to work, the end user gets the outside engineering assistance they need and the distributor gets another purchase order to pass along to the vendor.

Some vendors take the partnerships further, bringing a local partner on sales calls to reassure users that they can get everything they need for projects from cooperating sources. An integrator nearby has the expertise to make it work.

Some vendors realize the income potential of providing products and services themselves but are forced to adapt to lower profit margins, tempted to get into system integration even if it means competing with their integrator partners. As in the early days of automation, some vendors include an engineer with every box, but now they charge for services by the hour.

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