The VAR Kickback System and How You Can Make a Good Living from Vendors
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The problem here is that everyone is incentivized to play along, even the CEOs in most cases. Everyone has something to gain whether it is being able to hire cheaper people, not having to do their own jobs well, or whatever that even business owners with their own money on the line can find themselves feeling like the system isn't "that bad". The desire to "get something for free" can be so strong that even the person getting screwed might get sucked into it (in which case it's not unethical like it is when it is someone paid to protect against this scenario that takes advantage of it.)
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One of the keys here is looking at what some key roles of the CIO are. Some of the most important things that CIOs do are...
- Make key IT decisions and/or acquire the right people to make key IT decisions.
- Ensure that IT processes are good.
- Protect the company from bad IT decisions or actors.
In the case of having a VAR "do their job" for them, they actually skip all three of these three key responsibilities. Instead they use their position to generally create an appearance of doing these, while actually doing either nothing, or actually doing the opposite of them. This is where we get into serious ethical breaches.
It's like hiring a guard for your store, then it turns out the guard is the one who called up the thieves, told them to meet them out back, and turned off the cameras while they emptied the till.
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This system basically benefits absolutely everyone in the chain, except for the investors. There is no incentive for really anyone, anywhere along the way, to question or fight it. At every level of management, it's in the interest of everyone to keep the system going. It increases salaries while lowering the requirements for skill, experience, workload, and risk. Why do hard work and take on risks when you can do no work, look the other way, and your boss is more likely to reward you!
The House of Cards problem is a major factor here. Even if people are doing financial audits, it's hard to catch. And when caught, it's often hard to prove. And by the time it is audited, caught, and proven, there is such a good chance that everyone will have already gotten away with it it doesn't matter!
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Of course, there are cases of "real" traditional kickbacks as well. What I gave as an example above works best in smaller to medium businesses. In large one, convincing a business to buy a million dollars of storage or gobs of software licensing that isn't needed, or just accepting inflated prices on purchases can create a windfall of hundreds of thousands or millions for vendors or resellers which can find its way back to the IT purchase approver or influencer. Maybe it's as simple as a few nice dinners or a nice bottle of scotch, maybe it's a golf club membership, maybe its free passes to expensive trade shows, could be a cruise or a vacation, a new car, or a wad of cash. There are many ways, some essentially impossible to trace, in which a salesman could make a bad decision very worthwhile to someone in IT.
Given the often high salaries of sales people and low salaries of IT, this makes the effect much stronger. It might not be the vendor, but a salesman themselves doing the transaction!
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This gets trickier when you add IT Outsourcing factor.
I hope one day we all have cloud wages.
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@emad-r said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
This gets trickier when you add IT Outsourcing factor.
I hope one day we all have cloud wages.
Outsourcing your IT is the only right way for most SMB to get real IT.
They cannot afford it otherwise..
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@jaredbusch said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@emad-r said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
This gets trickier when you add IT Outsourcing factor.
I hope one day we all have cloud wages.
Outsourcing your IT is the only right way for most SMB to get real IT.
They cannot afford it otherwise..
The thing that confuses a lot of people, is that they don't understand what this means and they think that outsourcing "is" the solution, rather than outsourcing being the only path to the solution.
So many people outsource once, badly, and then think that that somehow shows that outsourcing itself is bad. Yet insource, have things just as bad, and don't make the same logical leap.
It's like driving to the store. The answer is "use a car" but that doesn't mean that buying the wrong car or driving badly isn't still a problem.
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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...
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@jaredbusch said in [The VAR Kickback System and How You
Outsourcing your IT is the only right way for most SMB to get real IT.
They cannot afford it otherwise..
Why?
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If anyone knows of a vacancy for an IT Manager where you don't actually have to do any work but still get a decent salary then please let me know, I'd love to apply!
It's not a picture I recognise. Every IT manager I know or have met works pretty hard and are constantly having to justify their roles to prevent them being made redundant and/or outsourced. It's not an easy career. Maybe it's common in the US, but if so, it's definitely a harsher environment in the UK.
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@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...
Hey @scottalanmiller ... now people on Reddit are discussing you, too. LOL.
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@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.
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@carnival-boy said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
@jaredbusch said in [The VAR Kickback System and How You
Outsourcing your IT is the only right way for most SMB to get real IT.
They cannot afford it otherwise..
Why?
Because you HAVE to either pay way too much, get way too little, or the IT person is just donating their time.
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@carnival-boy said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
If anyone knows of a vacancy for an IT Manager where you don't actually have to do any work but still get a decent salary then please let me know, I'd love to apply!
Those don't tend to stay vacant long. I knew of one paying $150K, if you consider that good, recently. But as you can imagine, people lined up to fill it. Zero technical responsibilities and the old guy was fired for having stolen many hundreds of thousands of dollars and it eventually got "too obvious" to keep him.
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@carnival-boy said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
It's not a picture I recognise. Every IT manager I know or have met works pretty hard and are constantly having to justify their roles to prevent them being made redundant and/or outsourced. It's not an easy career. Maybe it's common in the US, but if so, it's definitely a harsher environment in the UK.
That's a different effect. And to some degree, you are seeing roles that we generally say shouldn't exist that need to defend themselves. That's unrelated to doing a good job or a bad one or the VAR issue or whatever, that's the "a role that doesn't make sense in an SMB problem."
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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:
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.
MSP says "SMBs should employ MSPs", internal IT says "SMBs should employ internal IT". There's no point being proven either way, just different viewpoints and lots of confirmation bias from both sides.
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@carnival-boy 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.
MSP says "SMBs should employ MSPs", internal IT says "SMBs should employ internal IT". There's no point being proven either way, just different viewpoints and lots of confirmation bias from both sides.
Yes, but one has simple math and logic. The other has nothing. There is no benefit to internal IT. It's costly and risky. MSPs can do anything internal IT can do, at the same price, but has more options. It's literally impossible to come up with any potential benefit to internal IT.
All arguments for the Internet IT model at small scale come from misinformation about MSPs. Like claiming that all resources are shared, that mark up is high, that they are not on site, etc.
Every positive argument for internal IT equally applies to MSPs. but not every MSP benefit applies to internal IT.
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@scottalanmiller said in The VAR Kickback System and How You Can Make a Good Living from Vendors:
It's literally impossible to come up with any potential benefit to internal IT.
Er, ok.
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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:
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.
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@carnival-boy 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:
It's literally impossible to come up with any potential benefit to internal IT.
Er, ok.
It just is, because literally anything Internal IT can have as an "advantage" you can have with an MSP, too. There's no way for Internal IT to have some special feature.
Remember, Internal IT is just an MSP on payroll to the company. Whether MSP or Internal IT, it's all "another organization" to the company.
I've been talking about this for many years, and all points I've ever heard for internal IT are always based on total misconceptions about what an MSP is. Always assuming something that isn't true about them.
