The 2008 VARBusiness Annual Report Card offers tremendous insight into vendor partners. It shows who's on top of the vendor heap and who's on the bottom. It indicates where solution providers are happiest and where they see the need for vast improvement.
In the following pages, you'll learn about innovation and quality as well as see how various vendors performed in their respective categories. All the scores are based on the results of surveys of solution providers that deal specifically with these vendors. For more perspective, here are 10 top-line findings to keep in mind before you dive into this year's ARC.
1. The Highest Individual Category Score? Intel
Quality is always at the top of the list of characteristics VARs look at when choosing a vendor. It starts with quality, and then trickles down into all the other criteria. And excellent quality is a big reason why chip maker Intel Corp., for instance, handily beat Advanced Micro Devices Inc. (AMD) in the Client and Server Processors category. Intel earned a whopping 108 in quality and reliability--a score unrivaled by any other vendor in any category or criterion in the entire survey. In addition, the product innovation subcategory had the highest average score of 88--up from 77 in 2007--indicating that vendors are putting effort into this area and that VARs are noticing.
2. Quality Counts, But ...
Toshiba Corp. managed to edge out Panasonic Corp.--by one point in the Notebooks/Mobile Computers category--with a stellar score of 105 in quality (tied with EMC Corp. and NEC Display). Although Toshiba lost the product innovation subcategory to Panasonic--it scored a respectable 88 in quality--the vendor earned first place in the other two subcategories, propelling it to the top of Notebooks and Mobile Computers. Panasonic struggled in managing channel conflict, revenue and profit potential, and communication, effectively overshadowing the vendor's amazing achievement in quality. Despite those challenges, Panasonic's showing in the Notebooks category was an incredible ARC debut.
3. VARs: It's All About Communication
Many VARs cited communication as vitally important to their vendor relationship. With so many ways to communicate today, it's important the vendors choose the method that solution providers prefer, and to be sure the communication itself is valuable. Panasonic's score overall suffered largely because VARs weren't satisfied with the desktop manufacturer's communication. That wasn't lost on Sheila O'Neil, vice president of channel sales.
"Our partners are very vocal. It's information they want," O'Neil said. "[They want to know] how to sell against the competition, what's happening in the market--and it's about hearing from us what's happening so they are better prepared."
4. EMC Captured The Most Winning MarksThe only two of the 18 criteria that EMC did not capture were quality and compatibility; both of those went to Intel. In past surveys, though, EMC was not always the channel's darling. The company has embarked upon a serious channel feedback initiative, and many VARs have noticed significant changes.
As Keith Norbie, director of the storage/VMware division of Nexus Information Systems, notes in "Managing Channel Conflict" (pg. 38), to be successful in the channel companies must be willing to have steely determination to make necessary changes. EMC asked for feedback, received it and then paid their VARs more than just lip service. The vendor's top-notch scores are proof of that: EMC racked up the highest overall score in the survey: 87.
5. Vendors Aren't Shocked When They Do Poorly
Several big-name vendors received bad report cards in 2008. Companies with unhappy VARs generally know they have a problem or two.
Julie Parrish, Symantec Corp.'s former vice president of global channels, says in "Symantec Stalls Out" (p. 36), that the low scores were no surprise. However, moving forward, she notes that Symantec has a handle on where the biggest issues are, and is addressing them by revamping support, simplifying its licensing programs, reducing the number of product offering price curves, and changing processes for its customer care and support lines.
Hewlett-Packard Co., too, has a tough row to hoe. In the Workgroup Printers category, it earned the lowest marks in half of the criterion, including ones VARs consider among the most important, such as return on investment, partnership, and revenue profit potential.
6. The Lowest Score Was Acer's
Despite HP's and Symantec's poor performances, neither earned the lowest score in the entire ARC. That dubious distinction was claimed by Acer Inc. in Notebooks and Mobile Computers. It scored a 36 in the training criterion of the support subcategory.
7. Newcomer Dell Makes A MarkThis is the first year Dell Inc. resellers were polled for the ARC, and more than 70 VARs completed and returned their surveys. The results were a mixed bag, with Dell turning in a mediocre performance overall as it finished sixth among seven vendors in the Notebooks and Mobile Computers category, tied for third among four companies in Midrange (High-End) Servers and tied for fifth among seven vendors in the Network Storage category. Within the criteria, it fared well in compatibility and ease of integration in the Network Storage category (third place) and tied for second place with Sun Microsystems Inc. in partner portal in the partnership subcategory for Midrange Servers.
While Dell received kudos for its revamped return program, in our story "Dell's In" (p. 32), VARs report still having trust issues with the computer manufacturer. Many solution providers don't feel comfortable doing business with Dell, based on previous experiences and on the vendor's reputation of being quite the opposite of channel-friendly. John Zammett, president of HorizonTek Inc., a Huntington, N.Y.-based storage solution provider, said, "We have no intention of partnering with Dell. We see Dell as a competitor. We can outsell them by the value-add we provide. They can't do the [up-close] and personal service we provide."
8. Show VARs The Money
Revenue and profit potential is one of the most important criterion that channel partners rate vendors on in the support subcategory. However, it's not one of the first things vendors can offer. The foundation starts with excellent communication, quality support and clear understanding of their channel partners' customers. Once those objectives are met, then a VAR can start making money.
Vendors are working on showing VARs stronger revenue and profit potential, as it moved from an average score of 65 last year to 71 this year.
9. Partner Portals In Need Of More Work
While certainly not the sexiest part of the vendor/channel relationship, partner portals should not be ignored--but according to this year's Annual Report Card survey results, they are. A world-class portal could provide current communications, training and postsales support documentation (even video!) and hit upon all areas that VARs repeatedly said need improvement. Simply put, effort in improving partner portals could pay off in at least three different criteria, but sadly, no vendor has stepped up their efforts. Last year, partner portal averaged a dismal 62; in this ARC, VARs gave the criteria an average score of 57. In both the 2007 and 2008 ARC surveys, partner portal earned among the lowest scores of the ARC criteria.
10. Vendors Sweat The Details, Every Day
Sure, it's tough for vendors to offer innovative products and work within a very short cycle time, but, hey, solution providers have to do it, and they expect the same from their suppliers. EMC, which won high marks in quality and reliability, is no stranger to detail. Ken Steinhardt, CTO for customer operations at top-finisher EMC, said that his company tests components and finished products using a broad range of "torture tests." That might mean shaking them, putting them in hot rooms and cold rooms, and then extensively testing them to see how well they work with a broad range of EMC and non-EMC products.