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Channel Ecosystems

One side benefit of the down economy is that software vendors are finally making it easier to do business with them. Within the past month, IBM, J.D. Edwards and Oracle have all heightened their channel emphasis as part of an overall effort to define a more efficient go-to-market strategy.

BEA, CommerceOne, Adobe, Borland and others are expected to follow suit as just about every vendor in the industry moves to create a channel ecosystem that consists of systems integrators, consultants, custom developers and resellers.

What each of these vendors is slowly but surely discovering is what Microsoft discovered years ago: An ecosystem in which each element of the channel contributes to the health and well-being of the other elements is the most successful business model you can have.

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MICHAEL VIZARD Can be reached at (650) 513-4227 or via e-mail at mvizard@cmp.com.

As a result, a lot of software vendors are throttling back on supporting and maintaining a direct-sales force. Given that most software vendors can't really police their own sales forces in a way that minimizes channel conflict, reductions in direct-sales personnel is a good thing for the channel and vendor shareholders. It fundamentally lowers the cost of sales while giving partners the incentive they need to champion that vendor's products.

Within Global 2000 companies, the most trusted source of information regarding new products and technologies is the channel. The simple truth is that most IT organizations must spend the vast majority of their time and resources supporting existing applications and systems. They rely on the channel for guidance about the impact that new disruptive technologies will have on their business. The channel's influence is even more evident in the midmarket. These companies rely heavily on solution providers because their internal groups are essentially general contractors managing relationships with their channel partners. Their IT strategy directly reflects the collective guidance and wisdom of these partners.

The challenge and opportunity for people in the channel is to more aggressively drive the creation of ecosystems around geographic and vertical-industry expertise. That way, when the economy does come back, software vendors won't be able to afford to forget who their friends really are.

Are you listening? Do you agree? I can be reached at (650) 513-4227 or via e-mail at mvizard@cmp.com.

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