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The battle for solution providers to become more exclusive with certain vendors has come to this: Even when you play by all the rules, sometimes it’s still not enough.
Case in point: Earlier this year a large multinational solution provider had a big opportunity with a client that included new servers, storage, software and more. As the solution provider had done hundreds of times in the past, he went to register a portion of the deal with the largest vendor included in the solution. But this time, instead of a quick approval, he got an unexpected call back.
“They said, ‘Hang on, what about [networking products]? And can you register your VMware through [our] OEM rather than with VMware direct?’ ” said the solution provider CEO, who asked not to be named. He told the vendor that this specific client was a legacy customer of another networking vendor and that it normally registers virtualization directly with VMware.
“They said if you’re not going to do all four of those lines, we’re not giving you the storage and server registration. We told them that we were already displacing another [server and storage] with this solution, but that we have to be receptive to what the client wants. We can’t force [your products] on them.”
According to the solution provider CEO, the vendor’s field sales rep told him that he was going to give the deal registration to another partner who was willing to register its products across the board to ensure the vendor had full visibility with that client.
“It’s gotten very sticky, very uncomfortable that that’s the type of approach we see,” said the CEO. “They were pretty honest that it’s the way it’s been dictated to them, that if they can’t find a partner to offer a total [one-vendor] solution in the data center, a solution that used to be just server and storage, they’ll find someone else. They made it known that they’re supposed to get a banner to fly across all of those areas.”
In another example, the same solution provider said he was asked to rescind a registered deal that already had been approved because he wasn’t selling a vendor’s products across the board. The vendor wanted another partner that was willing to do so.
Clearly, the battle lines are being drawn. As more vendors offer products in a broader range of technology areas, those vendors are expecting VARs to choose sides. Several solution providers said the outcome of this struggle could have a decidedly negative impact on the channel’s effectiveness to serve customers.
NEXT: M&A Fuels Exclusivity Frenzy
