Symantec has reportedly made a strategic decision to take more business direct. The company is apparently offering big customers the option to dump their channel partners and deal directly with the vendor. And it is considering doing the same with small and midsize business contract renewals.
The company has apparently told its big enterprise clients about this. And Symantec has told Wall Street about this. But Symantec seems to have skipped the part about telling its channel partners. Partners contacted by ChannelWeb, which broke the story here, said they had not been contacted by Symantec about any changes, but that it made complete sense in retrospect because the company had indeed recently taken several deals direct.
That’s unfortunate, and not only because Symantec is changing the game for its partners in a rug-pulled-out-from-under kind of way. It’s also unfortunate because the company that once was viewed as channel-friendly hadn’t even let its partners know about the changes. According to recent research from Amazon Consulting in conjunction with Channel Insider, the lack of clean rules of engagement between the channel and vendors leaves end customers with a negative impression of the whole renewal process.
But that’s not all. Symantec may actually be leaving money on the table by taking those deals direct. The Amazon research shows that channel partners are much more likely to make use of contract renewals as an opportunity to upsell. Indeed, 45 percent of users who dealt with a vendor reported that they did not spend anything beyond the cost of the license as part of the renewal, according to Amazon. But resellers generated additional revenue 75 percent of the time, achieving an average uplift of 50 percent (compared to a vendor’s average uplift of 30 percent).
Symantec used to be a channel favorite, offering products that customers needed and a channel program that was good for solution provider and reseller partners. The first hint that the salad days were over came a few years ago when a difficult integration of an acquisition’s product lines and CRM system caused a seemingly unending river of misery for channel partners, who described it at the time as “horrible and excruciating.”
Symantec channel executives said in the summer of 2007 that the pain that it had inflicted on its channel partners was nearly over. Channel Chief Julie Parrish said the very top executives at the company were calling down a list of partners every week to talk about their problems and get a perspective on the channel’s pain. Maybe those executives got tired of hearing about it.