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The Final Word On Exclusivity
In the end, several VARs said they have been frustrated by the amount of resources spent dealing with vendor exclusivity, resources that could have been better spent serving customers. In the first example we gave of the conflict, the solution provider wasn’t able to get better pricing for selling one vendor across the board and had to bring in technical staff to find tertiary products to get the opportunity to get to a price point he was able to compete with, he said.
“It’s a bummer. It’s not put us in a good position,” the solution provider CEO said. “It creates a couple of issues. [Vendors] can’t dictate that [end users] have to go homogenous to a solution. [No one] should be doing that. You’re doing the client a disservice ramming it down their throat.
“Exclusivity programs also push end users to choose a partner that they might not be comfortable with,” he said. “Just because you fly [a vendor’s] banner doesn’t mean the client won’t see a degradation in support. [A vendor] might win the battle, but they’ll lose the war that way. Do you really want your name associated with a partner the [end user] didn’t want and is not comfortable with? Do you really need to be so zealous there? If your solution is the best and an industry standard, that’s great. But let’s evolve together and not force it. It’s creating unproductive selling behavior.”
Finally, if you think VARs face a challenge trying to balance the needs of customers with the requests of their vendor partners, imagine the pressure a distributor faces when billions of dollars are at stake. Greg Spierkel, CEO of Ingram Micro, believes vendor exclusivity is a nonissue for about 80 percent of vendors that have a narrow portfolio of offerings. But that doesn’t mean the other 20 percent don’t create pressure that’s felt across the channel. Solution providers should fight for their right to sell best-of-breed solutions to customers, regardless of what vendor that is, Spierkel said, because a vendor’s offerings might be the best in one technology area, but not in another.
“You may feel this piece is not quite as good as with other parts of the portfolio. That’s a fair thing to say. Then it gets to be a choice,” he said.
Vendors that strive for an “all-in strategy may lose some business because VARs won’t or can’t go exclusive with them,” Spierkel said.
“There’s always risk if a vendor struggles with part of its portfolio or if you don’t have something else in your portfolio. [A vendor] might do well for three years and all of a sudden they’re not the best in networking or computing or storage. Or they might struggle with supply. Then you’re caught,” Spierkel said. “I’m not a proponent of exclusivity to the utmost. You have to be careful. Everybody should always deal with the No. 1 or No. 2 player in a sector. If you carry two, great. If you carry three, maybe that’s overkill. But you shouldn’t be beholden to one. You might have to potentially miss some opportunities.”
—Scott Campbell
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