Buying direct - counting the costs of making a saving

If an end user's business is office furniture then they should be expert in office furniture; they shouldn't have to become an expert in IT. That's the view of one network supplier Network News talked to about buying network products direct - something that is becoming increasingly easy to do via mail-order catalogues, retail outlets or over the internet.

With prices falling, vendors have been trying to make products easier to use so that they can find cheaper routes to the market. Increasingly, the impression the industry is trying to give is that networking is cheap and easy.

Ramp Networks is one such vendor that is pushing products through catalogues and retail on the basis that they are cheap and simple to install. One example of this is its WebRamp product, an auto-configuring router with an integrated four-port Ethernet hub that Ramp claims can be installed in five simple steps.

In its marketing literature, the company is obviously pitching the product at non-technical users, saying that the product is so simple to install it "eradicates the need and expense of contracting a network specialist".

Although the product is available in the UK, Ramp isn't yet offering it for sale to UK users over the internet, though this is soon to change.

Hendrick Wacker, director of European sales for Ramp, argued that it is up to the user to decide if they should buy direct. "It is possible to run a network without expert help, but primarily it depends upon the size of the network and applications run over it. We believe it is possible to install and maintain a small network with minimal expense.

The majority of our customers are companies with less than 12 users, where IT expertise is thin on the ground and considered too expensive."

He admits that you will not get the same levels of service buying direct but thinks this matters less and less. "Like the PC market, as networking products become easier to use, customers will not need the same level of services."

An offer you can't refuse

Dilip Mistry is MD of data comms company, MultiTech, and he believes that buying direct is fine if what you are purchasing is a 'glue and go' product - ie one that takes little configuration.

"If this is not the case and the company does not have a person on-site with enough technical knowledge to fix the problem, then there is no one to turn to. It is almost always the case that cutting the price of a product leads to a cut in the funds available for support," he said.

But bargain-basement prices are, not surprisingly, attracting buyers.

A recent survey conducted by Black Box, a company that sells direct via catalogue, found that almost 60 per cent of SMEs buy on a price basis - but that 70 per cent are dissatisfied with product reliability and technical support.

If you are less than certain about how to install and use network products, buying direct is a false economy, said Mistry. "If everything works fine then yes they are bargains. If they do not and there is no support and the network goes down, or business is affected, or if people need to be contracted to sort out the problem then they may not seem such bargains."

It's not all bad as there are some products that you can buy direct without worrying - most people will be able to manage simple modems and it is now feasible to self-install simple networking solutions like NICs (network interface cards) and basic hubs. But it's not advisable for businesses that depend on their networks, said Paul Gardner, chairman of the Network Users' Association (NUA), an organisation that helps small businesses with network support.

"I don't believe that we have reached the point of 'plug-and-play' networking yet. Even simple installations of two Windows 95/98 PCs being connected together to share files seems to leave users wanting support. We have had quite a few new people join our group in order to be able to obtain advice and peer support."

Basic networking products have become simpler and cheaper but this has increased the need for support not reduced it, argued Gardner. Some vendors, like Ramp, do provide online support via the web and run telephone numbers, fax-back and 24-hour e-mail help, but these are not always easy to get through to, won't always give you an immediate response and don't give you the option of getting expert help on-site.

"In order to cut costs, most vendors cut down on the paperwork and the frills delivered with products. Hence, you no longer have detailed installation guides on paper and the electronic help files shipped with most products leave a lot to be desired. As a result there is a healthy market in third-party books and training materials."

Thin end of the wedge

These can be good sources of information, but Gardner believes that users having to rely on such material are just a symptom of many suppliers selling them short. "Maybe vendors are happy to let others provide this information, but I feel that they are then letting their customers down and not presenting a professional image."

Gardner believes most experienced customers will shop around and buy from either a knowledgeable dealer who adds value by providing support - but at a greater cost - or will buy a product which comes with the better installation and support options.

Paying someone else for the support is a good option, especially if you use products from different vendors or if you've bought them from different places.

The real crux of the matter is whether you have the in-house technical expertise or not. Most small businesses will not have any expertise, but any company with an IT department may feel confident enough to support or even buy and install their own networks.

London Internet Exchange (LINX) bought a Gigabit Ethernet switch, for what it claims is Europe's largest internet exchange point, direct from Packet Engines last year; but LINX obviously has solid in-house network skills. Chairman, Keith Mitchell, said the sense of buying direct depends entirely on the organisation's level of expertise and competency with networking equipment. "For those individuals or organisations with a low level of technical expertise it would be wiser to buy from a supplier who provides support, or to employ specialist engineers to provide this support," he said.

Ask the experts

Even the large companies that have their own in-house expertise tend to look for external help, said Adam Austin, head of enterprise networking at Computacenter - his customers include the Woolwich Building Society and Railtrack.

"You are talking about mission-critical solutions here and corporates would not buy networks in isolation - they would have other technology integrated as well. It may be possible in the SME market and with very small networks but a lot of networking is about planning and design. You have to understand what you are going to get out of the network."

But SMEs need as much support as any company according to Grahame Smee, MD of Data Connectivity Services, a distributor and provider of support.

He said that the growth in simple, inexpensive networking is increasing the demand for support.

"More networks are being sold into the SMEs with only a minimal number of internal IT staff. They are then dependent on the value added reseller for advice and support and this opportunity is now and is significant.

You may be able to buy a firewall off the page, but who do you call when it doesn't interoperate?"

In spite of selling products through some direct routes, Ramp's Wacker also thinks the product reseller offers the best support. "Really if you pay for support, you are probably better off getting it from the guy who sold you the products in the first place. He knows the products he's selling to you and has access to the right manufacturer contacts to approach with any tricky questions."

BUY NOW, PAY LATER: PUTTING PRICE BEFORE TECHNICAL SUPPORT

Black Box provides over 7,000 network products and services directly to end users - mostly in the corporate market. A recent survey conducted by the company found that over half of SME companies buy network products on the basis of cost. It believes that this is a significant factor in the high level of disaffection with networking products - 70 per cent of the companies in the survey said that they are dissatisfied with product reliability and technical support.

For the survey, Black Box quizzed 235 people responsible for IT purchasing in SMEs, ranging in size from two to 50 employees, about their buying habits. While brand name was considered the least important reason for buying, six out of 10 users said they would change supplier if a new supplier offered free technical support or on-site service.

Patrick Hudgell, technical director for Black Box, said that the results clearly indicate that many SMEs are trying to scrape by with the minimum investment required in networking and that this is resulting in poor performance, network down time and loss of productivity.

"Growing SMEs need to start looking beyond the short term - planning for future expansion capability, long-term network infrastructure and training personnel - before it's too late, not to mention too costly," he said. Black Box also believes that only 22 per cent of SMEs who don't have network support employ a qualified IT manager or technician.

Brendan Burns, UK policy vice-chairman for the Federation of Small Businesses, agreed that SMEs need to pay more attention to their networking development and support. "The real cost of not obtaining after-sales support is an indirect cost that few SMEs can afford," he said. "Too many small businesses have installed networks only to find their computer problems have increased and efficiency has decreased. Networking can be a major benefit, but the process must be well thought out and not approached on a piecemeal basis."

EUROSTAR: ON TRACK

Eurostar recently replaced its old network with new technology to ensure a stable, future-proof infrastructure. The company has its own IT staff and considerable expertise in some areas, and it did buy some network products direct. But it took expert advice on the product selection and contracted integration specialist, Integralis, to carry out the work.

Some products that can be bought direct do need expert configuration.

This is particularly true of network security products, explained Tony Rowan, technical manager of Integralis: "If you install a firewall and don't configure it, it's pointless. It's important to ensure the full configuration is set up not just the rule base."

It may be cheaper to buy such products direct - but the cost of installing them without expert help could be high. Rod Fife, general manager of networks and operations at Eurostar UK, said that getting expert help in was essential.

"By applying (Integralis') knowledge of networking standards it was able to help us establish the correct network design and suggest possible solutions."