The Universal Truths of Channel BuildingBy Pedro Pereira | Posted 2005-12-28 Email Print
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Opinion: Increasing numbers of vendors are moving to an all-channel model, but picking partners takes some work.Some things are universal truths: The bigger the rush, the harder it is to find your keys. Or the slower your Internet connection gets.
And if you're an IT vendor trying to reach the widest and deepest customer base possible, you need to work with the channel.
You need VARs, integrators and service providers to create excitement among customers for your products, and to sell, integrate and service those products.
This trend is sure to continue in 2006 because the value of a strong network of channel partners is no longer in question, Dell notwithstanding.
Vendors that this year announced plans to go all channel include well-established brands such as Panda Software and NEC Solutions, as well as less known vendors such as network protection vendor InfoExpress and e-mail security companies MailFrontier and Nemx.
These companies recognize that continuing to invest in a direct-sales infrastructure would merely misplace limited resources, which can best be applied to technology development and partner support and marketing functions.
Especially if they are aiming for customers in the vast and varied small and midsize market space, vendors' best prospects of success lie in working through partners.
But in taking this approach, it's important to keep in mind that partners are as varied as the end customers themselves.
Vendors must have a clear idea as to what they are trying to accomplish by signing up partnerswhich customer segments they are trying to reach and what types of channel companies are best equipped to reach them.
Logically, a security vendor should look for partners that have built a security practice, or at the very least, have the ability to invest in such a practice. Vendors should spend enough time analyzing each potential partner's capabilities to ensure that there is a good match.
Also critical, though not necessarily easy, is an assessment of a potential partner's financial health. It would be a waste of resources to sign up a partner that proceeded to go out of business in a few months.
The importance of selectivity in choosing partners cannot be overestimated. And that goes for VAR partners as well as distributors.
A vendor with hot technology that can get the attention of all major distributors may be tempted to forge partnerships with all of them. More often than not, however, it is advisable to pick one distributor that is willing to put some energy behind joint efforts to promote the technology to VARs and integrators.
Specialized distributors, such as D&H Distributing, Avnet Partner Solutions and Alternative Technologies, are often the best choice for a vendor making its first foray into two-tier distribution
Keeping the channel narrow in the beginning helps focus and prevents a quick erosion of profit margins. Market saturation also is avoidable if the vendor keeps in mind a partner's geographic reach and keeps overlap with other partners in the region to a minimum.
Making the right choices in selecting partners requires discipline, the willingness to understand partner needs and a legitimate commitment to investing in the business viability of partners.
Vendors should also keep in mind another universal truth as they seek to do business with the channel: Trying to run before you walk is the surest way to fall.
Pedro Pereira is a contributing editor for The Channel Insider. He covered the channel from 1996 to 2001, took a break, and now he's back. He can be reached at email@example.com.