Vendor 'Brand Burn'

I call it "brand burn."

At no time in the history of the computer business have the separate brands of the individual products that make up a solution been less important. My prediction: In 2003, it will become crystal clear that the solution provider is the brand.

IT purchases are being driven by well-documented return on investment (ROI) propositions offered by the total solution. Every IT expenditure is being scrutinized not for which brands of individual products make up the solution, but for the initial cost of the IT expenditure, the total cost of ownership and how long it will take to recoup the investment. This sharp focus on ROI is causing an acceleration of brand burn.

The market-share shifts caused by the phenomenon of brand burn will be most dramatic in the SMB segment. That's because major vendors consistently underestimate the solutions power offered by the tens of thousands of solution providers covering these accounts.

The fact is there are major vendors pushing forward with penny-wise, pound-foolish channel strategies. They are sacrificing relationships with the broad channel in favor of a select few partners they are subtly pressuring to be vendor-exclusive. Never mind that market dynamics have driven many single-vendor solution providers into extinction. At the same time, many of these vendors are building costly services arms to support their own brand agendas, despite their attempts to profess product-neutrality. What's interesting about the top executives driving these channel strategies is that few of them have any in-the-trenches experience with SMB customers. They are like politicians out of touch with grassroots voters.

And like the politician who gets tossed out of office in an election upset, these executives are going to get a big wake-up call. It will come in the form of market-share losses that will eventually result in those executives being replaced and sharp cutbacks in vendor services forces,along with channel strategy shifts to correct the sins of the past.

Which vendors do you expect to develop brand burn? Let me know at (781) 839-1221 or via e-mail at [email protected].