A recent Canalys report validates what the IT channel sector has known all along – the channel is the backbone of the tech industry. Vendors depend on partners to deliver solutions and grow their footprint, while end-user organizations need their expertise to support operational needs.
Every so often, however, vendors make decisions that call into question their ‘trustfulness’. Most recently, Broadcom’s scrapping of the VMware partner programme shook up the channel. The damage of Broadcom’s decision to the channel is real. Only partners with a minimum of $500,000 annual VMware revenue are being invited to join Broadcom’s Advantage Partner Programme.
The larger players may be able to mitigate the impact of this decision better, but the smaller and medium-sized channel players may not have the financial muscle and skill set to easily make the move to another vendor. More crucially though, they have customers relying on them to help navigate through this disruption too.
Such events serve as a reminder that channel partners also must select technology vendors with the same stringent criteria and vigor that the latter adopt to choose them.
Find a match
Evaluate vendors for their toolsets, business size, the markets they target, broader strategy, and organizational culture to ensure that they are a good fit for your business approach, values, and customer base. Solutions that are designed for enterprises of over 50,000 users may incorporate the latest and greatest technology, but they may not address the needs of organizations of say 5,000 users.
Strengthening channel partnerships and fortifying defenses in the technology sector
Likewise, don’t hesitate to assess vendors’ medium to long-term goals and aspirations. Do they have an acquisition-driven growth strategy, or are they likely to be acquired? When did the last acquisition/merger take place? At the time, was there excessive employee and partner turnover?
Also, are they displaying signs of stability or instability? For example, outsourcing support services to cut headcounts and costs, frequent senior management changes, or too many employee departures, are all warning signs. Are they sharing their product development roadmap? If they don’t have one, it’s a red flag!
Realistically, no one can predict future events with certainty, but don’t hesitate to ask for access to senior management to discuss such areas.
Local-level flexibility, agility and support
Especially if you service small and medium-sized enterprises, you need vendors who understand the requirements of your market and are flexible in meeting your customers’ requirements. Stipulating minimum license numbers, extremely strict license terms, but poorly defined SLAs that don’t assure service standards and responsibilities, means that the vendor isn’t a suitable partner for the market that you, as a value-added reseller, service.
Do the vendors you partner with provide in-region and in-time zone support, and have a local, physical presence so that you can pick up the phone for support in a client emergency or crisis? Typically smaller channel partners have deep expertise in the technologies they provide, but they can never have the same level of in-depth knowledge of every product to the same standard as the technology vendors. Therefore, to provide customers with the best level of service, you need to minimize scenarios where you have to wait for vendor support to come online or delay response to a new commercial query because the vendor’s processes are long-drawn.
Look for vendors who can provide flexible support that is tailored to the needs of your business model and customer base. If an issue arises with a small start-up customer, immediate assistance is required as the organization is unlikely to have many internal IT resources. Do the vendors have the agility and will to do so, or will your small business customers be lower down the food chain?
The quality of account management provided by vendors is equally important. Typically, managed service providers on average work with around 15 technology vendors at any point in time. That’s 15 different contracts, 15 different account management and support teams, 15 different commercial arrangements, and so on.
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Managing the relationship with so many technology vendors is an administration-heavy activity. You need the technology vendors to have effective processes. By way of an example, many channel partners lament the nightmares that can occur when it comes to dealing with invoicing queries with Accounts Payable teams at big technology vendors.
Accessibility to all aspects of vendors’ organization is so important. Marketing is a good example. Does the vendor provide cost-effective co-marketing funding to support business growth initiatives? Some of the larger vendors demand a strict minimum spend from the channel partners to qualify for market development funds, regardless of the size of the VAR. This inflexibility in criteria is unhelpful.
Don’t be just a number!
At the end of the day, any vendor-channel partner relationship must be driven by the mutual objective of recruiting and maintaining happy customers. To achieve this realistically, business models and approaches to customer service must closely align too. It reduces business risk for both parties, and especially for the customers. Aligning with the biggest and most powerful vendor in your space doesn’t guarantee trustworthiness.
