Reinventing the Channel Chief

With razor-thin margins eating away at the relationship between solution providers and hardware vendors, one of the interesting questions facing the industry is: What is the future role of channel chiefs within their organization?

For all intents and purposes, falling product margins have turned far too many channel chiefs into custodians whose main job is to maintain certain levels of transaction volume each quarter.

And yet we all know that the real opportunity for the channel going forward is to take the lead on evangelizing and selling high-margin emerging technologies that comes with lots of add-on services.

Unfortunately, not many channel chiefs are well trained to drive emerging technologies into the channel, so that’s why it’s worth taking note of the dual role that Edison Peres plays as the channel chief for Cisco.

In addition to running the channel, Peres is also the company executive in charge of determining the route to market that Cisco will use to bring products to market.

In the case of this week’s TelePresence announcement, it was Peres who decided which 23 Cisco partners would be the most competent solution providers capable of bringing these products to market.

He chose those partners based on technical competence and then deliberately limited the number of initial partners that could offer the product to 23 in order to make sure that margins stay relatively healthy over a significant period of time.

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Most channel chiefs don’t wield that kind of influence within their organizations.

Often they are playing a subordinate role to a vice president of sales, or worse yet, marketing, which sees the channel as a support group for the direct sales team or as a route to market that only fulfills demand for low-margin, high-volume products.

You can pretty much always tell how strategic any given company thinks the channel is just by looking at where the channel chief falls within the management hierarchy.

Click here to view exclusive channel research from Amazon Consulting.

Hopefully, the fact that Peres is leading not only the channel but also Cisco’s route to market strategy is a concept the will rub off on other vendors that increasingly need the channel to sell high margin emerging technologies.

But in order for that to happen, they first need to walk the walk by empowering the channel chiefs responsible for making that happen with the ability to drive product development decisions in addition to choosing the most appropriate route to market for any given set of products.

Ultimately, this may require a complete new generation of channel chiefs that have stronger technology and customer backgrounds, but it’s pretty clear this change is going to take place anyway.

The only thing that is not known is how long it will take for this evolution to take place and which companies in each market segment are going to get an edge on their rivals by embracing these necessary changes first.

Michael Vizard is editorial director of Ziff Davis Media’s Enterprise Technology group. He can be reached at michael_vizard@ziffdavis.com.