Symantec screwed up.
First the vendor dissed partners, encouraged customers to bypass those
partners and signaled an intention to cut distributors out of some business.
Then, in seeking to clarify its position, Symantec raised more questions.
The mess started with a recent report about comments Chief Operating Officer
Enrique Salem made June 12 to analysts regarding the company's channel.
Making the case that large customers are better off dealing with Symantec
directly than through a partner, Salem
said, "I don't [think] that somebody who's working with the channel is
driving as much value as somebody who's working with a Global 2000 firm."
He also said 700 to 900 large customers now have the option of buying directly
from Symantec, and that the company's largest partners can bypass distribution
and deal directly with the vendor. Bypassing distributors, he said, would
generate better margins.
The comments caused an uproar once public. Symantec channel chief Julie
Parrish tried to douse
the fire with a clarification July 16. She said Symantec's largest
customers have always had the option of buying direct, and in April, "Symantec
actually informed those largest of customers that they indeed had that option
to buy direct."
Parrish added that distributors cause a "bottleneck" with
enterprise accounts, particularly in deals involving custom enterprise licenses
that require a lot of back and forth. But any margin improvement from bypassing
distributors, she said, would be negligible. Savings would come from the
elimination of distribution rebates and sales rep commissions.
Parrish, whose channel cred is unimpeachable, had the unfortunate task of
trying to reframe Salem's comments
in a positive light as she sought to appease partners. But she didn't succeed
entirely because the damage was already done.
Salem, who was
addressing a Wall Street audience whose priorities differed from those
of the channel, came across as tactless in references to partners.
One would infer from Salem's
comments that partners offer value in some instances, but not always. That will
not sit well with partners who, if they see large customers bypass them to deal
directly with Symantec, might just be tempted to shift all their customers to
Symantec's competition as soon as they get the chance.
Symantec has been a good friend to the channel through the years. But
something is going on here that is not entirely clear because the vendor is
playing semantics.
Supposedly, Symantec's largest customers could buy directly from the vendor
all along, according to Parrish, but for some reason the vendor in April felt
compelled to "inform" them of this.
Parrish maintains that Symantec remains committed to the channel, but you
can't blame partners if they are feeling uneasy about the company's direction
and whether Salem's comments signal
a shift to more direct business.
It may well be that, in the end, this was all just a big misunderstanding.
But whatever Symantec decides to do, meant to do or wants to do, it had
better make things very clear very soon. You need only think back a few years
to see what unclear rules of engagement can do to the relationship between a
vendor and its partners, as was the case with Hewlett-Packard.
HP learned its lesson, but it took a while. The question is whether Symantec
will prove a quick learner. Considering how much competition the vendor has out
there, the quicker the better.
Pedro Pereira is editor of eWEEK Strategic Partner and
a contributing editor for Channel Insider. He is at
pedro.pereira@ziffdavisenterprise.com.
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