Solution Providers Feel Effects of Vendor LayoffsBy Kathleen A. Martin | Posted 2009-01-19 Email Print
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As IT vendors cut headcount and resources, solution providers say they’re seeing less of their vendor representatives and having to wait longer for service and support.
If you’re wondering what affect the layoffs at large technology vendors will have on the channel, you only have to wait to find out, literally.
As vendors trim their ranks, their ability to service and support their channel partners will diminish. Already, solution providers are reporting few channel account manager meetings and longer wait times for support calls.
"Since many of the layoffs were announced, we see vendor representatives covering larger areas than before. This mean less contact with our representatives," says Pete Busam, vice president and chief operating officer of Decisive Business Systems in New Jersey. "Those we used to see once every other week we now see once every other month."
Many say the channel is a relationship business, in which solution providers don’t do business with vendors but rather with the people who run the programs and enable channel field operations. The unsung heroes of the channel are geographic executives—such as North America channel chiefs—and regional sales staff—often called channel account managers. Unfortunately, these positions are often the ones most at risk when layoffs happen.
Channel Insider has reviewed publicly available reports of layoffs at technology vendors and solution providers. Since October, more than 100,000 technical, sales and market positions have been eliminated as a result of the deteriorating economy.
In recent months, several North America and global channel chiefs have either changed positions or left their positions as a result of corporate restructuring. Reports of many more channel account managers being let go are replete on social network message boards and personal blogs. While layoffs aren’t cutting off transaction between solution providers and vendors, it is having an impact and creating more work for partners.
"It takes time to build new relationships. I don’t run a large manufacturing company, but it would seem to me you keep the people that build the relationships and know how to build business with their channel partners," says Mike Hicks, general manager at Electronic Business Machines in Lexington, Ky.
The importance of channel relationships means vendors are taking a big chance by laying off channel sales and support personnel. Sales and channel managers often take years of relationships with them when they leave a job by choice or reorganization, furthering the potential disconnect between vendors and their solution provider customers.
"Times are tough and you cannot just move from company to company. If you have your own phone, you have your own contacts," says Doug Mahan, who recently lost his sales job at an IT vendor. "A full Rolodex and networked relations is the No. 1 thing employers are looking for after job skill."
Solution providers are experiencing many of the same economic pressures affecting large IT vendors. One recommendation they offer is cutting back on perks before personnel. Employees know full well the need to cut costs, and many would be willing to forego free coffee and company-paid cell phones in favor of a paycheck and continue to grow their company.
"We do not offer all the perks of a company paid for cell phone, free lunches in the break room or pay for the Internet at home," says Hicks. "We are an employee-owned company and we continue to grow our profits and revenue by taking care of our customers together."