No Pain, No Gain

Vendors and partners need to listen to each other if the market is going to move forward

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By  Andrew Seymour Published  November 22, 2007

Channel dynamics are notoriously convoluted, but if vendors and resellers are serious about creating a vibrant market capable of prevailing beyond a pure price argument then it's vital for both camps to listen to each other.

This week's Digital Business Channel (DBC) event in the UAE saw more than 100 resellers from across the Middle East and Africa rub shoulders with commercial-focused vendors on a purposeful mission to extend their first-tier coverage in the region.

As well as underscoring the pressure that solutions providers are under to identify vendors that just might give them the edge in a fiercely opaque market place, the show reinforced the importance of the channel in the eyes of vendors eager to locate competent partners. Brands such as AEG, Brocade, Xerox and Oki - to name just a few - were all waving the partner recruitment stick in a clear show of their intent to scale up in either the SMB or corporate space.

Just as importantly, DBC provided a fascinating insight into the issues and challenges that are keeping the Middle East channel awake at night. From listening to the dialogue between vendors and resellers, it's clear that certain topics are putting a strain on the relationship and until this discord is addressed the channel will always feel penalised.

Margin concerns - somewhat predictably - preyed on the minds of many resellers, a number of which expressed a growing frustration at the bottom-line pressures they face and an unhealthy dependence on rebate programmes to make any money. Finding a simple answer to this enduring dilemma is tricky, but vendors could do worse than draw a link between this complaint and the increasingly common accusation that the market is far too over-distributed.

The mindset that more partners automatically means more revenue seems to persist in this market, when in actual fact the opposite approach would arguably provide better results. Resellers want to know what help they are going to receive in growing their business, hiring the necessary staff and generally absorbing the costs that come with penetrating the market place for a vendor's products. Manufacturers with an over-inflated and uncontainable channel could find themselves with a problem on their hands if the situation spirals any further out of control.

A lack of procedures to eradicate instances of opportunists coming in at the last minute to win projects that another reseller has spent weeks preparing is also leaving some corners of the channel exasperated. Those manufacturers who haven't already introduced effective deal registration programmes in this region really need to think about doing so if they are genuine about their promises to address the pain points of their partners.

The same goes for training and certification programmes, another emotive subject eating away at Middle East resellers. Vendors must be bold enough to rip out the clunky channel training policies they have been using in this region for the past ten years and replace them with systems that are flexible, cost-effective and user-friendly. If that means utilising the web in cases where a lab situation is not needed or developing programmes that can be segmented and therefore digested on a discretionary basis, then so be it.

This is not meant to sound like a forum for bashing vendors because if there was another theme to emerge from DBC it was that resellers must also stand up and be counted when it comes to developing a sophisticated business model. It's all well and good saying vendors don't provide enough assistance to the channel and the market is overcrowded, but resellers must take it upon themselves to evaluate the areas that they need to improve and make the required investment. The willingness to commit needs to come from both sides, and if it is not forthcoming then there are plenty of options for either party to go elsewhere.

Of course, all of this has to be taken in the context of a market where personal relationships still dictate an enormous amount of what goes on. Whether it's price discounts, deal allocations or financing support, the influence of the individual is a powerful variable that has to be factored into almost everything. That doesn't, however, mean that vendors and resellers should stop listening to each other. The market will only become a healthier place if all pillars of the channel share these concerns and work towards a practical way of resolving them.

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