Symantec Plays SemanticsBy Pedro Pereira | Posted 2008-07-22 Email Print
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It is still not entirely clear whether Symantec plans a shift toward more direct sales.
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 email@example.com.