Symantec Partners Outraged Over Direct Sales For Top Customers

During a June 12 conference, Symantec COO Enrique Salem alerted a group of analysts to a series of decisions that would significantly change the company's channel model by making moves to "drive efficiencies and reduce the overall cost structure in our go-to-market capabilities."

"Symantec over the last 25 years has been very focused on a two-tier distribution strategy, But as we've built out a very strong direct salesforce where we're heavily engaged with each customer, it doesn't make sense to continue to leverage both a distributor and a partner to serve let's say, the seven, eight, 900 largest customers in the world," said Salem, according to the meeting transcript. "So those deals will now give the customer the option to go direct. Again just simplifying our channel go-to-market for the largest companies in the world."

Salem also said to analysts during the conference that the company planned to go "from a two tier to a one-tier distribution system" as well as increase automation for a significant portion of the company's SMB software licensing renewals.

The news elicited a storm of angry e-mails from partners expressing confusion and outrage at the company's decisions, which flooded ChannelWeb's community discussion boards.

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"Symantec has lost their way," wrote an individual described as Rich Ozer. "Although we still recommend their backup products, their anti-virus offerings have become bloatware, their support has gone downhill and this channel decision destroys any goodwill among ISVs that remains."

Other partners said that the news compelled them to switch vendors or actively recommend alternative products to their customers.

"Wow, not the best business practice around SMB. My company and many other SMB partners will be forced to go with other vendors," wrote an individual called Kay. "I hope Symantec executives look very closely at what they are dong to their loyal partners; it will be a great revenue loss to them if not."

In defense of their channel practices that solidified direct sales opportunities for some of its largest customers, Symantec executives maintained that "there are no changes" to the company's channel program.

In an interview with ChannelWeb Tuesday, Salem maintained that the proposed channel policies instead constituted a "clarification," as opposed to a decisive change, delineating a "hard deck" of its top 700-900 companies that the company would and could sell to direct.

"We're clarifying what accounts have the possibility of going direct. It's not a change, it's a clarification," Salem said. "It's a customer choice. We will offer the customer the opportunity to buy direct. It's not a matter of saying 'you must.'"

Salem also claimed that the "hard deck" would not "exceed that 900 number," while emphasizing that the company's largest enterprise customers comprised a small percentage of the company's global "activity."

Salem added that most of the company's partners "aren't touching these accounts in any meaningful way."

"There's this 900 number, that's a relatively small percentage of total activity that we do," said Salem. "The focus has become a small subset of our total business."

Symantec execs further explained that the company has cultivated a streamlined process for SMB renewals by alerting the customer 30 days in advance of their subscription expiration date. However, company execs stopped short at saying that the company alerted the channel partner regarding subscription renewals prior to the expiration date.

Symantec Vice President of Global Channels Julie Parrish said that the company still planned to allow SMB partners reap the recurring revenue from customer software licensing renewals.

"We've spent significant time and money setting up a process of matching to see which partner is the originating partner," said Parrish."What we're doing is sending out notifications to customers that they need to renew."

However, other partners said that Symantec had consistently left them out of the renewal process by alerting the customer, while neglecting to advise them to renew through their reseller. One individual known as "hurdygurdy" wrote in a ChannelWeb discussion board that the customer had received renewal letters "every two days" from Symantec, only one of which mentioned the VAR as the appropriate reseller.

"What is odd is that we renewed this customer months ago. Don't they get paperwork back from the distributor? Why are they bothering my customer? Why is my customer calling me all confused? Why are we trying to make renewals confusing and a labor intensive process? You are wasting my time calling my customers, but I guess I will let you waste your time, just don't waste my time and the customer's time," the partner wrote.

"Sad that a firm that has been so channel centric is making the mistake others have made," wrote one self-described as "DBennett." "If Symantec alienates their channel, they will implode and become a footnote in the annals of computing history."