Partner preferences

In a small corner of Barcelona this week, more than 650 resellers from across EMEA met with senior regional executives from HP. These weren't any ordinary resellers either. Their appearance at the vendor's inaugural EMEA Preferred Partner summit marked them out as highly valuable resellers; dependable stalwarts who have made HP's portfolio a fundamental component of their business model.

  • E-Mail
By  Andrew Seymour Published  September 19, 2006

In a small corner of Barcelona this week, more than 650 resellers from across EMEA met with senior regional executives from HP. These weren't any ordinary resellers either. Their appearance at the vendor's inaugural EMEA Preferred Partner summit marked them out as highly valuable resellers; dependable stalwarts who have made HP's portfolio a fundamental component of their business model.

The term 'Preferred Partner' was coined one year ago after the then newly-installed boss Mark Hurd spotted that it wasn't particularly easy to distinguish between those resellers selling a bit of HP kit opportunistically, and those investing in building up their expertise of the company’s technology.

From a CEO’s perspective, you want plenty of resellers doing the latter. But, more to the point, you want that to be identifiable to the customer. Hurd's assessment simply confirmed that the cream of HP's partner community lacked a certain special status that they clearly deserved. 12 months on, and the gathering of these 650 top resellers, proves HP has made great strides in defining and addressing the highly qualified partners that are genuinely in it for the long haul.

While representation from MEA accounted for just 1% of total attendees at the conference - not a particularly inspiring figure given HP does more than a billion dollars in the region - the very concept of the 'preferred partner' is something that should be on the minds of every vendor developing a channel strategy in the Middle East.

Of course, geographic challenges mean that reseller recruitment is always going to be something of a landgrab exercise in this part of the world, especially for newcomers. They will naturally attempt to secure the services of a distribution partner which can offer immediate access to the broadest network of resellers possible. This mentality is understandable: not only does the vendor require market reach to showcase its offering, but it will also be facing intense pressure to chalk up strong numbers and impress the EMEA management team it is reporting in to. But to achieve long term success, vendors must strike a delicate balance between quality and quantity.

Most companies in the IT channel sector still work to the conventional 80-20 rule - that is, 80% of revenues are derived from just 20% of customers. IBM's hardware and software for example, is sold by hundreds of second tier resellers across the Middle East , but the relationships it has with between 20 and 30 of its leading tier-one business partners provide the bulk of sales. And if you factor SBM and GBM into equation - the exclusive partners of IBM for certain product lines in Saudi and the Gulf - then the figure rises to a whopping 85%.

IBM has been in the region a long time and is one vendor that has identified which partners warrant a close relationship and preferential treatment. But are other vendors doing enough to reward and motivate the dedicated minority of partners who bring in the majority of business and uphold brand value like it is their own? Or are these resellers simply just given the dubious title of "Gold" or "Premium" partner and left to plough their own furrow?

As the market matures further and the competitive stakes increase, the need for vendors to develop their own 'preferred partner' mechanisms will be integral to sustainable growth and success. In a geography like the Middle East , volume and coverage will always play a leading part in most decisions that are made, but vendors must also reserve special treatment for those partners that truly make a difference.

Resellers which invest in new technology, display incredible brand loyalty, and provide the genuine ‘added value’ that so many manufacturers preach must be properly nurtured. This doesn't mean all other categories of partners have to be excluded, but it does mean that more precision is required when it comes to achieving the right balance. 650 resellers, which gathered in that small corner of Barcelona earlier this week, can vouch for that.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code