Channel Middle East talks strategy with some of the leading networking vendors in the Middle East to find out how they are managing and developing their channel approach
More pics ›
The Middle East networking market is a diverse business with incredibly sophisticated vendor solutions, being implemented by equally as skilled resellers, to fulfill the demands of modern enterprise’s in a region that has seen incredible growth over the last years.
Many of the solutions on offer very unique features to answer the in-depth demands of the CIO and the IT manager. These include serious inroads being made into next generation technologies such as cloud computing, hosted services and virtualised environments.
It is very interesting then, that on the face of it, there is relatively little to choose between the tactics that a vast majority of the networking vendor’s employ in the interaction and positioning of their Middle East channel.
Largely speaking, the two-tier model is favoured, with a distribution partner being responsible for fulfilling the needs of resellers, but also acting in a value added capacity to ensure that those resellers can maximise revenue streams from additional services and product pull-through.
Also, although all vendors will vehemently claim that they would never consider a direct sales approach with the end-user, and chastise competitors accordingly for supposedly doing so, there are plenty that work directly with systems integration partners supporting the work these partners do and carrying out pre-sales and occasionally post-sales support.
“Our current model is through distribution so we have a two-tier model, the [reseller] partner and the distribution layer,” explained Mahmoud El Ali, general manager of 3Com. “We are however, working with a number of different integrators and discussing with them a kind of tier-one partnership,” he revealed.
This sentiment from 3Com reflects the play-book that many channel managers follow in the Middle East, but despite the intricate nature of the networking business, with large scale implementations and long term commitments lending themselves to a close vendor and reseller partnership, the size, breadth and variety of countries in the region means a Middle East distributor is almost always an important ally for vendors looking to prosper.
The role of the tier-two players is often much more than just a logistical aid. Due to the fact that some vendors have not been here for a great deal of time, or do not have physical presence in some of the countries around the region, a distribution partner will often be appointed by networking vendors to work as a master distributor or an agent.
That distributor will shoulder a great deal of the responsibility for the market development, reseller support and product fulfillment in most, if not, all of the markets under their agreement.
Also, the networking market, in which the most prolific accounts are the large enterprise accounts, best suits a channel stratagem that is highly selective over the number and type of tier-one partners to ensure that these partners can meet the demands of the clientele.
Paul Sherry, regional director for Middle East and Africa at F5 Networks, which is tied with value-distribution partner SecureWay for the Middle East region, say the firm’s objective is to work as closely and as tightly as possible with its resellers here, an intention supported by a rigorously selective approach to its tier-one channel.
“At any one time we are focusing on about 10 to 15 resellers, across the whole region. The objective is to not to have as few as possible, but from our perspective smaller is better. We are not interested in having hundreds of resellers,” asserted Sherry.
As Sherry sees it, the focus on a few select channel partners is part of a long-term outlook, and one that has had to be fortified following the advent of the financial crisis, with the vendor increasing its commitment to those partners and upping the support it offers them.
“It is very easy to be opportunistic and do everything on a deal by deal basis. But if you make a commitment to a reseller, you will have a business plan and it won’t all happen in the first 60 or 90 days,” admitted Sherry. “It will take time to work and evolve and sometimes you have to walk away from deals, but having a longer term relationship with a partner is crucial to success. It is difficult because it is tough times and the whole channel is under pressure from end-users who know it’s a buyer’s market.”
In fact the support vendors can afford channel partners as we continue into the financial downturn is absolutely vital and something that will increasingly have to be relied upon in order to ensure survival of both the vendor and channel partner. Juniper Networks emphatically claims that support for the channel during these dark times has been at the forefront of its channel strategy.
Of particular importance, according to Taj El-Khayat, regional channel director at networking specialist Juniper, is investment from the vendor side into ensuring the channel business is sustainable.
“We understand that in the previous years our committed partners have invested so much in us and have helped us grow the business. It is our responsibly to help them grow through these tough times and help them by subsidising channel development plans,” asserted El-Khayat. “We know for a fact that if times were better, they would invest in us. But now that times are bad we have to help them with their bottom-lines in order that they can stay in business.”
It would not be fair to say Juniper is the only networking vendor that has taken on board the cries for greater vendor support during the downturn. There are certainly other very good examples of firms that have been working to ensure that their enterprise-facing channel have the means to deal with problems such as a slow in demand or projects being put on hold until funding comes through.
3Com, for instance, has been looking to help channel partners take advantage of the fact end-users might be considering other options to the dominant vendor in the market.
The company has responded to the fact that potential partners, that are already certified on Cisco solutions, might not be willing to re-invest in 3Com training.
“The question that has been raised by our enterprise partners is ‘OK we would love to be 3Com partners, but we don’t want to have to invest in a new team to sell 3Com’,” explained 3Com’s El Ali. “So we have created a special course that takes a Cisco technical person and helps them to become a 3Com expert in a week.”
One traditional avenue through which to levy support to channel partners is the partner programme, and some vendors are looking to this to underline the work of their alliances right now.
Aziz Ala’ali, regional director for the Middle East and Africa region at Extreme Networks, says the vendor renewed the focus of its channel programme at the start of last year 2008 to install an emphasis on educating and training its channel partners.
This however, could be viewed as not really recent enough to be relevant to meet the current tumultuous market conditions. But Ala’ali says that the firm did not stop there.
“A great example of [support] is the special channel summit we organised in Beirut in early April, which allowed us to inform and train our channel partners on the latest technology of Extreme Networks. We believe that only a well educated partner can deliver the required added value to our customers,” added Ala’ali.
Educational support and a strong partner programme are all very useful and aid channel partners will appreciate right now, but is this going far enough? Juniper’s El-Khayat is inclined to say no as he suggests that it is important the channel sees help being delivered in frontline business, on the sales floor, so to speak.
“We have a clear alignment and synchronisation in terms of how we align the partner’s sales force to our sales force. Looking at the economic crisis, we aim to increase motivating factors with the partner sales people to help them drive Juniper technology within the market place and in times like this, the sales person of a partner will focus on what sells the easiest in order for him to make his numbers,” he warned.
“What we do is strengthen the relationships between our account managers and partner’s account managers so that they have common objectives and to motivate them to sell more we give rewards to sales people so that they do not feel the gap in their revenue. Of course we do this with the acknowledgement and the agreement of their management and in addition to that we feel it is very important to carry out account mapping and planning together,” said El-Khayat.
In addition to carefully considering and implementing support strategies to bolster the work of the channel as we experience the negative effect of the financial crisis, vendors cannot neglect making future channel plans.
For some vendors future planning might be no more than assessing what they are currently doing and then planning to do more of the same and answer specific issues as they arise.
For others, perhaps the less established vendors in the market, the rest of 2009 and into next year present a chance to steal a march on the competition by increasing the scope and focus of their channel in the region.
Extreme Networks is one such vendor that is looking to growth the depth of its channel here.
“Over the next 12 months, we will ensure we appoint new channel partners in countries where the level of business will require more presence, and assist our current partners in attaining higher levels in the channel partner programme,” confirmed Extreme’s Ala’ali.
Conversely Sherry at F5 Networks suggests that it already has the resources in place to oversee the work of the channel and that future strategy will centre on consistency.
“Last year we hired a dedicated channel manager to oversee the partner programme and she has been driving many new marketing initiatives and new investments,” said Sherry. “It is about having the right skills and the right focus and together we can drive marketing programmes to create the right opportunities. I don’t think we are going to change what we are doing significantly. We are not looking to change the size of our channel, it’s more of the same and consistency.”
This is a similar approach to that to be adopted by Alcatel-Lucent in the region in the near future: “We are trying to maintain the install base and use opportunities in the market, and make sure that we empower the channel with some specific programmes that will help them grow, and will also ensure that the channel has the best margins that they can,” said Hesham El Nahhas, director of Enterprise Activities at Alcatel-Lucent.
When returning to the whiteboard and sketching out future channel plays in the networking field vendors will have to have their wits about them. Although the enterprise architecture domain is a stronger proposition than most, thanks to the constant pressure for IT managers and administrators to ensure their network is up to date and fit for purpose, it is also a market fraught with uncertainty with budgets slashed and customers highly sensitive when it comes to ROI and service.
As shown vendors are very selective over the channel partners that they have in the networking space and in turn demand a great deal of commitment from their channel to ensure that they get the market exposure and breadth needed.
In addition those partners enhance the vendor’s estimation in front of the end-user by offering end-to-end solutions that focus on their products as well as the careful provisions of value added and post sales service.
So in an environment that is becoming increasingly cutthroat, in business terms it is a matter of life and death that the channel receives the assistance they need from the vendors they work with.