Fatal distraction

Channel development is an area that many vendors have worked tirelessly to improve - now it is vitally important for the market's future that those efforts don't take a backseat in the months ahead.

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By  Andrew Seymour Published  November 23, 2008

Channel development is an area that many vendors have worked tirelessly to improve in a bid to further their indirect business in the Middle East. It is vitally important for the market’s future that those efforts don’t take a backseat in the months ahead.

Rarely a week goes by without a vendor stating their commitment to the region or hailing the significance of an efficient reseller network to the ambitions they harbour for Middle East growth. The more sincere ones tend to back this sentiment up with tangible examples of investment — refreshing their channel programmes to make them more compelling or funding regular technical events, perhaps.

More often that not, however, the rhetoric fails to materialise into anything meaningful and a lack of accountability means it generally passes by unnoticed.

The channel may have grown accustomed to this scenario, but in the present environment it could prove that little bit more difficult to swallow. In times of uncertainty, the one thing resellers don’t need is vendors talking up the market without paying any attention to the support and assistance they require.

For all of those vendors that have gone on record as saying they will make a difference in the channel, the message is simple: the next few months will offer you the perfect opportunity to demonstrate that.

You only have to look at what is happening in other industries to realise that an element of panic has set in among many organisations, causing them to exercise an unprecedented level of prudence, regardless of whether it is absolutely necessary. That undoubtedly has consequences for the IT sector, even if certain vendors have risked their credibility during recent weeks with incongruous claims that the nature of their solutions or products renders them virtually immune from the economic turbulence.

While resellers are urging a show of support and stability from vendors, it is both inevitable and understandable that vendors themselves will implement a degree of belt-tightening. Sun Microsystems’ MENA operation last week published a statement denying it would be locally impacted by news of corporate plans to cull 6,000 jobs worldwide — although curiously it was only able to provide this assurance for the ‘interim’ period.

Resellers claim they are seeing growing signs of conservatism from suppliers in the market. Talk in the channel is that vendors such as Cisco have put the freeze on hiring for the time being, while others have become stricter with payment terms and collections. Whichever angle you come at it from, there are implications for the channel.

It is only natural that vendors will need to ensure their own houses are in order first before worrying about their partners’ problems, but they would do well to remember that neglecting allies during this time could be as damaging as failing to correct any internal issues.

The call for greater transparency has certainly never been louder. Market commentators argue that vendors need to go to greater lengths to understand what their business model means for their most valuable partners, and more importantly what will happen if they change it in any way. Greater attention will need to be paid to liquidity and working capital in the channel, as well as the actions core partners intend on making in the short term. Even taking more interest in the dynamics at play within a key reseller’s customer base may prove to be a useful exercise for vendors determined to understand and ease any potential pain points among the channel.

We’ve entered a period where it could become very easy for vendors to take their eye off the ball — the truth is that they need to ensure exactly the opposite happens.

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