Going in Circles Around a Global Channel

Just about every business pundit and senior executive on the planet these days is talking about the importance of globalization.

But while everybody sagely nods their head in agreement very few people actually understand that opening an office in another country does not mean that you have actually gone global. What it means is that you have gone international, which is an important first step, but it’s a far cry from being global.

All you have to do is ask somebody who has tried to put together a deal involving three or more geographies about just how difficult it is to be truly global. For the most part, none of the vendors or distributors have truly global systems or channel programs so they can’t properly process those types of transactions and when they can they can’t really give you credit for doing it.

So at the end of the day, the solution provider, distributor and vendor all put in a lot of excruciatingly hard work on a deal that, after all is said and done, is questionably profitable.

The good news is that research firm Amazon Consulting reports that half the channel chiefs they recently surveyed said they are working on globalizing their channel programs in the next 12 months. The bad news is that probably 100 percent of the channel chiefs out there are not sure what that exactly means when it comes to dealing with regional laws, customs and business cultures, let alone accounting systems.

But as much as you may wish for these types of deals to go away, there is no getting away from them. The fact is that customers are going global all the time these days because different elements of the business, such as purchasing, may be headquartered in Asia while sales is still headquartered in the U.S. But when it comes to IT, they still want one solution provider throat to choke so they will increasingly demand that IT services companies need to support them on a global basis.

And beyond what’s happening at the customer level, there’s also the whole move to managed services to consider. Theoretically, managed services allow solution providers to compete in any geography once they can get their arms around the actual equipment involved. So for all intents and purposes the decision to embrace managed services effectively means that you’ve decided to compete at some point on a global level whether you like it or not because even if you don’t offer global services there is some guy in India or China getting ready to offer services in your local market.

At the moment, it’s really only the big vendors such as IBM and Cisco that have enough financial muscle to help a solution provider drive a global deal. Cisco, for example, has just created a managed service program that allows solution providers to offer a consistent set of commercial terms to their customers regardless of geography.

IBM, meanwhile, by dint of sheer muscle, has been trying to connect ISVs and solution providers around the world through a series of ad hoc deals that rely on the expertise of their people to pull together.

But if the channel is really going to evolve alongside the whole move to globalization, the entire industry is going to have take a long hard look at how it does business today because what’s in place at the moment simply isn’t going to cut it. And rather than simply letting that evolve haphazardly, the time may be at hand for channel chiefs and their advisory boards to get together to really figure out how to create a truly global channel once and for all.
For more on this topic, check out this interview with Ingram Micro CEO Greg Spierkel