The Channel Needs a K.I.S.S.By Michael Vizard | Posted 2007-05-17 Email Print
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If vendors are truly serious about making it easier for solution providers to do business, then they should heed the old mantra of NASA: "Keep it simple, stupid."
Everywhere you go these days, vendorsmost notably Hewlett-Packard and IBMfinally are doing more than just talking about making it easier to do business with them. They're actually doing something about it.
Unfortunately, it's going to take some time before most of them can unravel the mess of chaotic processes that have evolved inside their organizations over the last 20 years. But at least many of them are trying.
The reasons why all this work is starting now rather than, say, five years ago, are complex, but a lot of it has to do with the dwindling nature of the top tier of the solution-provider community. The fact of that matter is most vendors are focusing their recruiting efforts on a very finite section of the solution-provider community, namely the companies that generated in excess of $10 million of revenue.
The logic behind those concentrated efforts is that the vendors figure only companies of this size are worth spending all the time and energy to recruit, because in their world, 20 percent of their partners generate 80 percent of their revenues. That means that in order for them to justify all the time and energy on recruiting a partner, it has to be for somebody who can make their elite 20 percent club.
The problem they are running into is the fact that most of the larger solution providers are trying to limit the number of vendors they have to do business with. This results from the overhead associated with managing the diverse number of vendor channel programs they are associated with.
In fact, a recent survey of 215 subscribers of eWEEK Strategic Partner, conducted jointly by Ziff Davis and BlueRoads, found that only about 35 percent feel they take advantage of the market development funds and co-op dollars available to them, while only 36 percent felt that vendors had their best interests at heart. And just to put a little more emphasis on the point, 51 percent said cumbersome channel programs were a major justification for dropping a vendor.
That kind of environment makes it pretty difficult for vendors to recruit the types of solution providers they seek most at a time when the big vendors are trying to strengthen their relative positions in the SMB market that is largely owned by the channel.
For years now, people have been telling vendors that their channel programs were too complex, but in the interest of greater accountability, most channel chiefs erred on the side of caution. But as pressure from upper management continues to mount to increase sales and gain market share, channel chiefs are looking for ways to make it easier for solution providers to do business with them instead of with a rival.
Unfortunately, all too often this means tinkering with IT systems in the hopes that e-commerce systems will magically transform the situation instead of looking at their core product offerings. For example, storage vendor Equalogix has done a nice job of simplifying its offering so that most deals can be closed inside of a 30 to 50 day window because sales people don't have to sort through 25 different configurations and product offerings in order to sell something to the customer. Of course, most vendors have 25 different configurations and add on products as part of a lame attempt to maximize profits that usually only serve to string out the sales cycle.
If vendors are truly serious about making it easier for solution providers to do business with them, then the first place they need to start is by making it easier for the customer to buy products. Because the only time solution providers are making any real money is when their customers are buying products and the associated downstream services that drive the profit model for just about every solution provider in the channel today.
Or, in other words, keep it simple, stupid.