The Psion and Varlink partnership

It is almost one year since Psion Teklogix UK - the mobile computing and wireless data capture solutions specialist - announced a major overhaul of its UK channel strategy. While it continues to sell its supply chain products such as vehicle-mounted computers, bar code scanner/readers, speech recognition and RFID solutions directly to end users, since last February the Psion Teklogix range of mobile computing products, which includes the revolutionary new iKn PDA, has only been available through authorized distributors and resellers.

As part of the restructure, Psion Teklogix appointed York-based Varlink - a specialist distributor of mobile computing,and data capture products selling exclusively to IT Resellers, system integrators and solution providers - as distributor for its range of mobile terminals. In this wide ranging interview, IT Reseller speaks to Mike Pullon, CEO  of Varlink, and Paul Westmoreland, managing director of Psion Teklogix UK, about the two companies' relationship and developments in the markets that they serve.

When Psion Teklogix announced its new market strategy, your plan was to continue to sell supply chain products such as vehicle-mounted computers, bar code scanner/readers, speech recognition and RFID solutions directly to end users, while the Psion Teklogix range of mobile computing products, which includes the revolutionary new Ikn PDA, would only be available through authorized distributors and resellers.

One year on, how much of the company's business comes from direct sales and how much through distributors and resellers?
Paul Westmoreland (PW):  This model was seen as a first step towards a wider partner-based strategy, moving to this model was never going to be easy and particularly in the UK distribution has played a huge part in helping us. Not all countries have adopted a distribution/reseller model - some countries aligned with value-added partners.  We have not measured total company performance via just distribution/reseller, but indications would lead us to believe that we are about 30% partner-based after 12 months, which is a great achievement!

Has the new distribution strategy been a success?
Mike Pullen (MP): Yes, it is clear that many of our IT resellers have been willing to listen to the Psion Teklogix message and to take the products to their end users. Our year to date Psion Teklogix sales are, as a result, more than 20% over plan and have  contributed significantly to the fact that when we completed our year end, in  August, our growth over the prior year was over 90%.

How has the strategy benefited Varlink's business?
MP:  It has enabled us to open new accounts and to strengthen our relationship with existing accounts. Psion Teklogix products tend to be selected for large projects and this has had positive impact on our average order value.

How does the strategy and close partnership with companies like Varlink benefit end users of the Psion Teklogix range? i.e., what are the advantages to end of the new sales approach?
PW:  There have been several benefits but particularly I would mention marketing reach - the strategy has brought an existing reseller community to us that previously we had no visibility of. Other benefits such as 24/7 quoting, cost savings in order processing, and many more.  For our joint end users we see products being fulfilled quicker, an expansion of application knowledge and understanding, more choice of partner and ultimately greater end user satisfaction.

Psion Teklogix has perhaps been best known in the logistics and warehousing sectors but you are becoming increasingly successful in the mobile worker market. How much of Psion's business is now in the mobile sector?
MP: We don't know precisely where every terminal is installed but a large proportion of the terminals that we have sold have had GPRS capability which indicates use in the mobile sector. The largest individual Ikn sale that we have made was for a mobile application.

Are you focusing on a particular segment of the mobile market and, if so, which, and why?
MP: The focus on applications and segments comes from our customers rather than from us. I don't think that they would appreciate me telling their competitors where their wins are coming from! What I can say is that we are seeing interest from Systems Integrators and Solution providers across all established mobile applications.

What are they key drivers in the mobile market and do they vary from those in the warehousing sector?
PW:  The "outdoor" mobile market is in my opinion a completely different market to that of warehousing, a greater emphasis on ruggedness exists (IP, shock and drops, battery autonomy, temperature range etc). The only common area between warehousing and other markets is that customers are looking to drive similar benefits from the solution they implement. By this I mean all customers look to increase efficiencies, productivity, and accuracy and reduce central cost.

In the markets that you serve how has the competitive landscape changed in the past year and, if so, in what ways?
MP: Ikn has challenged the manufacturers that have held sway to this point. The product is available in a number of variants that provide end users with the ability to pick a specification that meets the precise performance/function/feature/benefit/price mix demanded by the application. The adoption of windows operating systems over proprietary software means that end users can have their application software ported to devices of their choice. This has certainly created more competition in the market place. I would also like to think that access to products like Psion Teklogix Ikn and The WORKABOUT PRO, through distribution channels like Varlink's has enabled end users to get more choice and better value

What are the key challenges in the mobile/warehousing markets?
PW:  As a company Psion  Teklogix not only provides a platform for customer solutions but also technology enablers like Radio Frequency Identification (RFiD), Voice and  Biometrics. Our biggest challenge is to present new enablement's and the same enablement's but in different form factors.

What's driving technology uptake in the mobile/warehousing markets?
MP: Rapid ROI - driven by customer service and productivity gains. The rapid exchange of accurate data over a LAN or WAN is essential for those looking for a commercial advantage

What are the challenges that lie ahead for Psion and Varlink in both the mobile and the warehousing sectors? How are the companies addressing them?
PW: Given that we have enjoyed an equally exceptional 12 months we see most of the challenges behind us. I see our next step combining our approach with distribution and resellers to the partner base building relationships and product support/knowledge and helping partners win business for us both. This is a long-term approach and will mean our direct sales resources will be focused primarily on this activity which, in turn, helps us move to the final stage of being partner focused as a business.

Going forward, what sectors do you believe will offer the greatest growth potential?
MP: We are seeing opportunities arising out of most sectors of the economy. Clearly those that will gain most are those that can engineer that maximum operational gain from implementation. I'm not sure that this is sector specific although any field service, sales or merchandising application that is using daily batch  transfer of data rather than a GPRS based real time approach may be losing significant financial and customer service benefits

What are the major concerns that potential users have in buying and then using mobile and warehousing hardware?
PW:  Like Mike, I have seen in the past  customers buy a technology platform that is not right for the environment  they are in, this leads to customer experience and user perception being dented and the main ROI not being realised. Also, in our markets we see that customers want the longest term they can get from their hardware and expect in some cases to achieve a 5 year plus term from a platform that costs very little - again this doesn't work. We have embarked on a programme of future-proofing our platforms so that they become increasingly easier to support technology changes without the need to re-invest in completely new hardware, this approach helps us exceed 5 years in many cases.

What are the major pieces of functionality that users look for and why?
MP: This depends on the application. In general terms the major choices are made around the following:
1. Communications - batch or real time and if real time LAN, usually WIFI, or WAN, usually GPRS. An increasing proportion of GPRS applications now call for GPS.
2. Data Capture, the choice between 1 D and 2 D scanning or, on an increasing basis, if the application requires a read/write capability, RFID.
3. Operating System, CE.net or Windows mobile - this will be driven by the operational needs of the application
4. User interfaces - the type of keyboard (full or PDA style) and screen size. These are sometimes over looked but the successful implementation of a solution may be compromised if the operators find the terminal difficult to use.
5. Is the terminal fit for purpose? Will it stand up to the demands of the workplace in which it is going to be used? Are there cases, straps, cradles and charging options that are suitable for the employees that have to use the terminals?

How do you balance functionality with practicality - do users want ever more features and capabilities or do they prefer simple technology?
PW:  This is largely down to the partnership we have when we help deliver a complete solution. Software plays a large part and in cases where simplification is required, we can work alongside our joint partners to help them make full use of the technology and provide ways of simplifying the offer.  Where customers want everything in one platform and have a requirement to rationalize the number of pieces of equipment carried or used, then presenting a more complex solution is often the direction customers go down.  I think both apply depending on where they are in their respective technology adoption.

Are potential users still concerned about the perceived security risks that historically have been associated mobile computing? How are Psion and Varlink overcoming these concerns?
MP: As we deal exclusively with resellers that are selling a complete solution we are rarely asked any questions about security risks. PW: We work with industry standard protocols that allow developers and customers to leverage security offerings

Who gets involved in the hardware decision-making process?
MP: Increasingly our customers work in a cross functional approval and selection process. This requires input from those that use, support, program and pay for the kit. This type of broad buy-in to selection at an early stage increases the probability of smooth implementation.
PW:  Decision makers are usually buried deeper in a customer's organisation. We try and work alongside the beneficiaries, finance, technical and senior management collectively as they underwrite the decision.

Mobile computing and wireless data capture technology is an important investment - how can customers be assured that they are getting the right solution?
MP: It is unusual for our customers to win a significant order without going through a rigorous selection and test process.  End users that set clear selection criteria and agree project goals for their suppliers that can be proven during a pilot, usually end up making the right choice.
PW:  We do find ourselves guiding some customers through our experience. In such cases we try to show them similar installations to help them see the proof of concept before making any decisions.

What are the most exciting developments in the mobile computing arena?
MP: Converged form factors with multi functionality - terminals that can connect to a network or a cellular phone network that can read multi dimensional barcodes and provide RFID capability. Terminals that have VOIP functionality and that can take photographs and that can host GPS software. This means that increasing numbers, of even the most esoteric application demands, can be met whilst providing strong ROI opportunities.

PW: Watch this space!

www.psionteklogix.co.uk
www.varlink.co.uk

About Psion Teklogix
Psion Teklogix is a global provider of solutions for mobile computing and wireless data collection. The company's fully integrated mobile computing solutions include rugged hardware, secure wireless networks, robust software, professional services and exceptional support programs. With over three decades of industry experience, Psion Teklogix has customers in more than 80 countries around the world, and over 36 sales and support offices in 17 countries.

About Varlink:
Varlink is a specialist distributor of Mobile Computing, Barcoding and RFID Data Capture products selling exclusively to IT Resellers, System Integrators and Solution Providers. The company offers an outstanding e-commerce website designed to provide the information which is routinely required by IT Resellers to win and retain business. Among its many valuable features, the site allows VARs to effectively source application meeting products, download PDFs, check PIN protected reseller discounts, check stock availability, place orders online, request RMAs, post technical questions and access POD information.  To help IT resellers meet the growing demand for reliable and cost effective mobile computing equipment, Varlink has developed a range of marketing development resources and online capabilities for the VAR community and the company was presented with the "Emerging Company of the Year" Award at CRN Channel Awards 2007