Are We being Overly Paranoid About Vendors' Direct Intentions?

While I have some pretty strong opinions as to the right and the wrong approaches to each issue, one thing is certain: These days, there are more solution providers casting a wary eye toward vendors than ever.

The channel not only understands the need for vendors to take business direct under certain circumstances, it is in many ways supportive of this action. What concerns the channel are those vendors that claim they are only doing what the customer wants, when in reality that statement is a smoke screen under which they take away business that should have gone through the channel.

The main reason customers want to buy direct is because they believe they will get better pricing. In addition, one of the main reasons product manufacturers are building service organizations is to give them more control over accounts, which would give them the chance to sell more products.

Does anyone really think IBM Global Services or Hewlett-Packard's service organization is going to recommend a competitor's product over technology from its own parent company? Fat chance.

What vendors need to realize is that their channel partners are watching them very closely. Software developers and hardware manufacturers should ask themselves what perceptions they are giving their channel partners through their end-user marketing and channel programs. And we in the channel need to ask ourselves what signals vendors are sending about their longer-term strategies.

IBM is an excellent example. IGS has grown to $35 billion in sales. While $6 billion of that is connected to indirect channels, is there any doubt that IBM's product divisions view IGS as anything other than a means to sell IBM products? Does IBM expect any of us to believe that IGS doesn't have an advantage in selling IBM products, considering it can drive down the price of those products far below what IBM charges even its largest solution providers? And what portion of IBM's marketing initiatives are aimed at getting end users to call IBM directly?

We are in a particularly interesting period right now because sales of IT equipment are anything but robust, and manufacturers are in some cases desperate. Over the next 12 months we need to watch very closely what vendors are doing to try to influence end users, and what they are doing to reach out to channel partners.

Vendors should be doing both. In many cases, they aren't, which could indicate a longer-term agenda that calls for more emphasis on the direct side of the business.

Before policy changes are made or significant initiatives are undertaken, suppliers need to consider how the channel might perceive the moves, regardless of vendors' intentions.

Too often, initiatives that were launched without thought of channel perception have failed because solution providers were not happy with their implementations. Many times, a little bit of forethought would have made for a much smoother rollout.

Moreover, many manufacturers have an inflated sense of their direct-sales capabilities, and only after they have ticked off their solution providers do they discover that their direct strategies leave something to be desired.

The point is, we need to watch what manufacturers do as much as what they say to know whether they are really committed to a strong channel.

Make something happen. I can be reached at (516) 562-7812 or via e-mail at [email protected].