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Responding to a firestorm of negative press and angry partners, Symantec’s channel chief, Julie Parrish, clarified what the company believes are a number of misconceptions that cropped up in the wake of statements Symantec Chief Operating Officer Enrique Salem recently made to Wall Street analysts.
Parrish spoke with Channel Insider about the comments by Salem and how they have been portrayed as channel-unfriendly. The controversy stems from statements Salem made about offering top customers the option to buy direct, cutting distributors out of some enterprise deals, and automating the renewal process of small and midsize business partners.
Read Symantec’s He Said-She Said
Parrish says there are misconceptions around all three.
“All accounts have had the ability to buy direct in the past,” Parrish says. In that space—the top 700 to 900 customers—about two-thirds were already buying direct, according to Parrish. The subtle change that happened in April came when Symantec actually informed those largest of customers that they indeed had that option to buy direct.
“That leaves tens of thousands of accounts where we’ve said the rest of that business needs to be channel-led,” says Parrish. And on those deals where customers chose to buy directly from Symantec, Parrish says that Symantec did not change any compensation or make any pricing discounts. “We simply said to these accounts, ‘You can buy directly from us.'”
Parrish says that contrary to press reports here and elsewhere, Symantec did inform its Platinum partners of the change.
“This is not the kind of change where you issue a mass e-mail,” she says. “It’s a conversation. It’s not a newsletter item.” Parrish said the news was delivered to partners via their field sales reps.
“We made this change in April. We’ve been operating for 90 days without this kind of uproar.”
Second, Parrish clarified the company’s position on cutting distributors out of the top deals. Parrish says there is a specific piece of business where distributors are a bottleneck—enterprise buying programs and enterprise site licenses—the things that make up Symantec’s Flex Buying Program.
“Pricing was negotiated with the end user anyway,” Parrish said. While Enrique Salem told Wall Street analysts that Symantec did expect there to be a positive impact to margins because of the change, Parrish says that any margin improvement would be negligible. Savings would come from an elimination of distributor rebates and sales rep commissions, a small piece of the pie to begin with. Symantec is making the change to simplify these deals and not to improve margins, according to Parrish.
“It’s all about streamlining the process,” she says. Overall the change would impact 30 to 40 transactions per quarter in the United States.
Finally, Parrish says that Symantec is not taking SMB renewals direct.
“People have confused the fact that we are sending notices to our customers 60 days before it’s time to renew,” Parrish says. Those notices, which are not new, give customers their partner’s name and tell the customer to contact the partner to renew. If those accounts have not renewed, another notice is sent in 30 days to the customer. The customer is given the option of contacting the partner or buying direct from Symantec for the MSRP.
The big concern at Symantec has been that “nobody has taken down these renewals,” Parrish says. “When we’ve been looking at our renewals business, we have a lot more one-to-one contact in larger businesses. But all of us have a problem keeping up with the masses.”
That’s why Symantec is investing in “a lot of automation” to make that process easier, Parrish says. This isn’t a strategy, she says. It’s a direction for the upcoming fiscal year, which began in April.
In his comments to Wall Street analysts, Salem said such a system wouldn’t be online until the 2009 or 2010 timeframe.
Parrish says that such a system would keep SMB partners’ best interests in mind, giving customers the option to renew with partners or renew online with Symantec, and the commission would go to the partner.
“We need our partners to renew that business,” Parrish says. “They should be in there 90 days ahead of time. When we see that is not happening we say, ‘Somebody should take that down. Let’s line that up with customers.'”
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