CRN Research: Hardware Channel Satisfaction Plunges To Two-Year Low

The overall channel satisfaction rating for all 11 hardware vendors came in at 21.6 percent in August, down from 25.7 percent in July and 31 percent in June. CRN defines the overall satisfaction rating as the percentage of solution providers satisfied with channel programs minus the percentage that are dissatisfied.

Several individual vendors also hit new lows in August. For example, Sun Microsystems' overall satisfaction rating dropped to 9 percent last month, eclipsing the previous low of 11 percent this past April. 3Com fell to 24 percent in August, compared with its previous low of 29 percent in December 2002. Advanced Micro Devices (AMD) declined to 19 percent in August, below its previous low of 21 percent in April 2002.

Other vendors are near record lows in terms of channel satisfaction. IBM's overall channel satisfaction rating of 24 percent in August was barely above its record-low figure of 23 percent set just the previous month. ViewSonic's 28 percent rating last month tied its previous low set in June 2002. Intel's rating of 40 percent in both July and August was just above its all-time low of 36 percent in June 2002.

These results are consistent with longer-term trends in the data, which reveals that over the past 18 months, the overall level of channel satisfaction for the 11 hardware vendors as a group has been declining steadily. August's 21.6 percent satisfaction rating represents a decline of more than one-third from the 34.3 percent rating in December 2001, despite some individual months in which the satisfaction rating increased. A six-month moving average of the data, which provides a more accurate assessment of longer-term trends, reveals a similar decline.

All individual hardware vendors have seen declines in their overall channel satisfaction ratings over the past 18 months, and in some cases the magnitude of the drop has been significant. 3Com, AMD and Sun Microsystems, for example, have seen declines of more than 30 percent in their satisfaction ratings between December 2001 and August 2003.

Cisco is worthy of special mention, as it is the only one of the 11 vendors surveyed that has actually seen its overall channel satisfaction rating increase in the July-August 2003 period. Small and midsize VARs, which make up the majority of respondents to the CRN Monthly Channel Satisfaction Surveys, are a strong point for this vendor, as I described in a previous research report. Nonetheless, even Cisco's channel satisfaction rating has declined more than 20 percent in the past 18 months.

Another past research report revealed several elements, such as lead-generation programs and free marketing materials, that solution providers think are critical to a good channel program. Are vendors failing in these areas, leading to low (and falling) satisfaction ratings? Or are there other factors that are unique to each vendor? E-mail me with your thoughts.

Next week: Channel satisfaction with software vendors also hits a new low.

John Roberts is CRN' s director of editorial research and can be reached at [email protected]