The VAR Kickback System and How You Can Make a Good Living from Vendors
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You can take the situation and flip it around... how often can you find an SMB that is not doing this model, at least partially. They exist, to be sure, but they are decently hard to find, it turns out. Now loads, and loads of people will claim that they don't do this and say that they use an MSP. But pressure them or investigate the MSP and almost always you find that the MSP isn't actually an MSP, but a VAR. Calling VARs MSPs is an extremely common way to cover this process. Sometimes they even pay them in an MSP capacity which does more to make it hard to identify.
Pick some totally random companies, try not to filter by some known factor like "they are really good at their IT" as that could potentially throw things off. But just do some investigation where you can. Dollars to donuts, if you really dig and pay attention, you'll find sales people running the show, at least partially, essentially everywhere.
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The thing that people often miss about this system, is that it doesn't require any coordination, planning, intent, conspiracy, or anything else that people like to look for. It's just human nature, self preservation, and normal sales. It happens in nearly every industry, IT is just bigger, broader, and more complex than most making it an easier target.
If we take the things that people say about businesses, especially SMBs, from management to IT, and just ponder them - it turns out that this system is exactly what you'd expect. Nothing surprising. Owners and CEOs of SMBs are often untrained, busy, and like to make the excuse that IT is tech and ignore it. IT people are often underpaid and undertrained - pressured to do things that they are not well prepared to do. But they are scared for their jobs because someone is always willing to come along and do things cheaper. CEOs and CFOs in the SMB can rarely put the numbers together to evaluate IT value, so shifting money from salary to purchasing often makes IT look like heroes, even when wasting money, due to financial reporting sloppiness. Then add sales people with mouths to feed and jobs to do.... it's all just as natural as can be.
It's easy to be upset or blame individuals or feel like it must be coordinated between all of these parties. But it really isn't, not 99% of the time. It's a system that is always at the ready and easily accessible.
And if you talk about it in any group for any length of time, you'll find people who are so confident in it that they will defend it and regularly say things like "how can we be expected to do anything else."
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Here is a really common way to spot this effect going on.
I was talking to the IT guy or my friend in IT and he had this project to do, so he called up three [vendors, resellors, salesman friends] to get quotes.
That's how you engage this process - leading with "sell me stuff" instead of leading with "determine if we need to buy something." The goal in that engagement is to spend money, not to meet a business need.
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@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
The goal in that engagement is to spend money, not to meet a business need.
and, via the nature of the process, have somebody do your job for you! Exactly like you've described above.
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@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
Here is a really common way to spot this effect going on.
I was talking to the IT guy or my friend in IT and he had this project to do, so he called up three [vendors, resellors, salesman friends] to get quotes.
That's how you engage this process - leading with "sell me stuff" instead of leading with "determine if we need to buy something." The goal in that engagement is to spend money, not to meet a business need.
I would honestly say that in a case like this, the "IT guy" sees a need to purchase something (he may or may not know what he actually needs) and reaches out to his vendors to get pricing.
The case is subjective.
If my manager comes to me and says I want a new laptop, I can quickly lookup the age, model and other details of that laptop and then find a comparable but newer model to replace it.
In a case like that I might "just call my rep to quote out X".
Now the case you're describing is the IT guy who has no idea what the business needs, and just farms it out. Which is where I think a lot of people have a bone to pick with this topic as a whole.
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@bnrstnr said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
The goal in that engagement is to spend money, not to meet a business need.
and, via the nature of the process, have somebody do your job for you! Exactly like you've described above.
Yeah. It's not a big conscious thing in most cases. It's just someone offering you a free thing where they do a huge part of your job on your behalf, who wouldn't say yes to that! Oh wait, we shoudln't say yes to that. But "free stuff" is very, very hard to resist. Especially when you think (and are normally right) that nearly everyone is doing it.
That's what makes the system work so well, it's so common that you can use the excuse "it's just how things work."
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@dustinb3403 said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
Now the case you're describing is the IT guy who has no idea what the business needs, and just farms it out. Which is where I think a lot of people have a bone to pick with this topic as a whole.
Why would people have a bone with that, though? I can see someone being shocked that this happens, but that's just a lack of exposure. And the people who do it will not like it being talked about, but, um, yeah, that's the idea. Where does anyone have a bone to pick with the system, though? And why pick the bone with me instead of with the entire industry set up this way?
I feel like the kid in the crowd pointing out that the emperor is naked. Except... the entire crowd is naked and they are mad that it was pointed out.
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@dustinb3403 said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
I would honestly say that in a case like this, the "IT guy" sees a need to purchase something (he may or may not know what he actually needs) and reaches out to his vendors to get pricing.
Right, that's the issue. He "sees a need to purchase something" instead of "seeing a need to evaluate the business needs". I know what you are saying, but jumping over IT straight to buying is the problem.
It's easy to expose as a gap. If the business already knows that it needs to buy things, and the sales people sell things, what role does IT play if that's all that IT does - passing the "I want to buy" message to the "I want to sell" people? IT is a useless middleman in that scenario.
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@scottalanmiller but seeing a need to purchase something doesn't mean that he skipped the investigative stage, or that he knows the system is an aging or past end of life and needs to be replaced.
Now I can agree he shouldn't go out and say "what do I need to buy?" The conversation should be "I need a system that does XYZ, quote it."
But that isn't what is happening in your scenario. It is John the IT guy going out and saying "We need to use this software, what do I need to run it and check off these boxes?"
Which I totally agree is a flawed approach.
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@dustinb3403 said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@scottalanmiller but seeing a need to purchase something doesn't mean that he skipped the investigative stage, or that he knows the system is an aging or past end of life and needs to be replaced.
Now I can agree he shouldn't go out and say "what do I need to buy?" The conversation should be "I need a system that does XYZ, quote it."
But that isn't what is happening in your scenario. It is John the IT guy going out and saying "We need to use this software, what do I need to run it and check off these boxes?"
Which I totally agree is a flawed approach.
Right, everyone has to "buy things", it's the skipping of the evaluation phase - which we can often see in asking for quotes on too broad of a range. Like "I need storage" instead of "I need this very precise item or very precise alternative."
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@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
Like "I need storage" instead of "I need this very precise item or very precise alternative."
That kind request sounds like something an end user would say not an IT professional.
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@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@dave247 said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@dave247 said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@dave247 said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
I posted this over on the sysadmin subreddit: https://www.reddit.com/r/sysadmin/comments/8e4oli/is_there_really_a_var_kickback_system_that_it/
Not too many people agree with or like the post...
Well DUH, lol. They are the ones leveraging the system. Of course they will react passionately, that proves the point more than disproves it.
Wow. "They"? Reddit is a community just like this one. Just because it's not Mangolassi.it doesn't mean it should just be dismissed. Yes, there are VARs lurking there, but there are also thousands of IT folks of all levels.
I'm dismissing people who are reacting negatively to something that is really obvious and well known; not dismissing Reddit. That "most" people take offence to it is expected.
But Reddit is not like ML, ML is a pro tech community, Reddit is an open forum.
I thought ML was also an open forum too.. And I'm not talking about reddit as a whole, I'm talking about the sysadmin subreddit -- also a pro tech community.
I know nothing of official limits to the subreddit. Perhaps there are. ML is "on your honour" but is for IT pros (or those trying to become them) only. It's not audited and there is no policing. But Reddit itself is not filtered even "on your honor" and if the subreddit is, I'm not aware.
As a general thing, though, that subreddit is not seen as being very technical or professional. That's pure opinion, but one I hear from a lot of places. I definitely don't spend time there as it's not a good place for peer review, conversation, or advice within IT. It's a very different culture than you'd expect in peer situations.
It's just a bigger place, so there's going to be more of a variety over at reddit. Aside from that, there's not much difference between ML and the Sysadmin subreddit in terms of who can be a member.
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@black3dynamite said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
Like "I need storage" instead of "I need this very precise item or very precise alternative."
That kind request sounds like something an end user would say not an IT professional.
Well that's why we often say "those aren't IT pros, those are IT buyers". End users that buy IT, but don't do IT themselves.
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@dave247 said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@dave247 said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@dave247 said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@dave247 said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
I posted this over on the sysadmin subreddit: https://www.reddit.com/r/sysadmin/comments/8e4oli/is_there_really_a_var_kickback_system_that_it/
Not too many people agree with or like the post...
Well DUH, lol. They are the ones leveraging the system. Of course they will react passionately, that proves the point more than disproves it.
Wow. "They"? Reddit is a community just like this one. Just because it's not Mangolassi.it doesn't mean it should just be dismissed. Yes, there are VARs lurking there, but there are also thousands of IT folks of all levels.
I'm dismissing people who are reacting negatively to something that is really obvious and well known; not dismissing Reddit. That "most" people take offence to it is expected.
But Reddit is not like ML, ML is a pro tech community, Reddit is an open forum.
I thought ML was also an open forum too.. And I'm not talking about reddit as a whole, I'm talking about the sysadmin subreddit -- also a pro tech community.
I know nothing of official limits to the subreddit. Perhaps there are. ML is "on your honour" but is for IT pros (or those trying to become them) only. It's not audited and there is no policing. But Reddit itself is not filtered even "on your honor" and if the subreddit is, I'm not aware.
As a general thing, though, that subreddit is not seen as being very technical or professional. That's pure opinion, but one I hear from a lot of places. I definitely don't spend time there as it's not a good place for peer review, conversation, or advice within IT. It's a very different culture than you'd expect in peer situations.
It's just a bigger place, so there's going to be more of a variety over at reddit. Aside from that, there's not much difference between ML and the Sysadmin subreddit in terms of who can be a member.
No joking we even have @spiceworks here. . . .
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@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@dave247 said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@dave247 said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
I posted this over on the sysadmin subreddit: https://www.reddit.com/r/sysadmin/comments/8e4oli/is_there_really_a_var_kickback_system_that_it/
Not too many people agree with or like the post...
Well DUH, lol. They are the ones leveraging the system. Of course they will react passionately, that proves the point more than disproves it.
Wow. "They"? Reddit is a community just like this one. Just because it's not Mangolassi.it doesn't mean it should just be dismissed. Yes, there are VARs lurking there, but there are also thousands of IT folks of all levels.
I'm dismissing people who are reacting negatively to something that is really obvious and well known; not dismissing Reddit. That "most" people take offence to it is expected.
But Reddit is not like ML, ML is a pro tech community, Reddit is an open forum.
And here is an equally opposite response from someone's reply to your post:
Scott Alan Miller works for an MSP. He has a vested interest in pushing this point of view and his opinion should be taken with a gigantic grain of salt.
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I can see how SMB IT can get sucked into this. When having a conversation with a VAR they specifically try to direct the conversation to areas they suspect you are less knowageable in and try to make you feel inadequate. Their sales pitch grinds to a halt when you prove you know more about it than their sales pitch covers.
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When I was internal SMB IT, my counterpart in our sister company in the states had their terminal servers managed by someone else, their network covered by someone else, and even convinced them to hire a help desk tech. They had 50 users.
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I'm kind of torn about the whole internal SMB IT thing. The problem is there are a lot of bad MSPs out there, and most owners don't know how to get a good MSP. I think internal IT is better than a bad MSP.
However, once a SMB is gotten into ship shape, the workload for an SMB tech is so small. I got into development because there was so little of my time taken up but technical IT related tasks. I tried getting into improving business workflow, but that didn't get very far because I wasn't trusted as more than a tech.
For internal SMB IT to really be worth it, IT has to be deeply involved in the business side of things. There's just not enough straight technical work.
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delete
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@flaxking said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
I tried getting into improving business workflow, but that didn't get very far because I wasn't trusted as more than a tech.
...For internal SMB IT to really be worth it, IT has to be deeply involved in the business side of things. There's just not enough straight technical work.I agree completely and think it's a real shame that you weren't trusted. When I was an internal IT Manager I worked extremely closely with the CEO and CFO to align their business plan to the IT strategy. I was uniquely placed in that I worked across departments in all areas of the business, so I had an intimate knowledge of, for example, the finance department and the production department. Whereas other department heads tended to work in silos. I was there to bridge these silos.
VAR management was a key part of my role. I outsourced where I could, or where I lacked skills, or where I simply lacked time. Basically, if a VAR could do a job better and cheaper than I could get it done internally, I'd outsource it. If they couldn't, I'd do it internally. My experience of the business and of my team guided me towards these decisions.
I don't think a salesman could ever bullshit me. In many cases I'd work with VARs that didn't even employ salesmen. They were just a bunch of engineers doing what they love and making a reasonable living from it. I now work for one of those VARs.
I'm not offended by Scott. I find the idea that it would be "literally impossible" that NTG couldn't do a better job than I did more bizarre than offensive. I simply can't imagine a world that is as black and white as Scott's. I think it's where self-belief turns in to fanaticism.
