Bad Channel Math

Now that's bad channel math. And it happens more frequently than we think. At VARBusiness, we often hear such inflation of numbers, and poor accounting of partner program numbers andgulprevenues and margins.

Now, everyone will embellish from time to time, but you have to ask yourself two questions when faced with a bad channel math equation like the one above: What is the vendor really doing in its program, and will I ever be more than a number?

Every now and then, a vendor will rediscover channel religion, cobble together some elaborate program of systems and rewards for its would-be partners, and then race to sign as many new solution providers as possible. If you hear a vendor brag about scoring scores of new partners, think twice. In fact, think: What is the market demand for certain products? Then, what will a vendor need in terms of channel capacity to sell its products? Answering those two questions will help you determine whether there's enough business in a particular vendor program to make money.

Microsoft claims it added more than 100,000 channel partners in the past year, bringing its solution-provider ranks to nearly 380,000 globally. Microsoft can absorb and support an army of that size because it has a deployment base of 600 million desktops and servers around the world. And it owns the desktop operating system and office application markets. Other vendors don't have the luxury of bad channel math, since fuzzy numbers could ultimately cost valuable time and lost opportunities.

So, before you sign up with a vendor, double check its math and make sure you're aligning yourself with a company that has an eye for accurate channel measures.

Do you have examples of bad channel math? Send them to me at [email protected].