1. CHANNEL CONFLICT
The age-old specter of channel conflict remains the single largest peeve that gets under solution providers' collective skin. It can take many forms: vendors that try to bypass their partners to target customers directly; sales reps that swoop in at the last minute and decimate partner margins to close a sale; or even channel strategies that pit partner against partner to build up conflict within the ranks.
"It really [bothers] me when vendor sales reps do 'whatever is necessary' to maximize their commissions, even if it negatively impacts our profitability," said the solution provider executive who works with a number of leading IT vendors, including Cisco and HP. "They are simply money-motivated and have little to no regard for the health of the channel or our business."
No solution provider wants to spin his wheels working against a vendor sales rep. "We chase the same sale they do, or vice versa," said the executive at the Southern California-based solution provider. He tells a story about how sales representatives at one major IT vendor will circumvent the vendor's deal registration system by calling customer prospects at the start of a the fiscal year and tag them as "named accounts" that are off-limits to channel partners. To be fair, he said the vendor is working to rein in the overly aggressive sales reps.
Another channel conflict-related problem, the solution provider said, is when vendors recruit too many partners with the same or overlapping territories. "The OEM will sign up as many VARs as possible, allowing 'Darwinism' to determine winners and losers," he said.
Relationships between IT vendors and solution providers will probably never be entirely free of conflict. But channel partners keep reminding IT vendors that alliances with solution providers are mutually beneficial. And the fewer "peeves" that come between them, the more profitable those relationships can be for both parties.
PUBLISHED AUGUST 12, 2013