CHANNEL 2.0 CONFERENCE: 'Everyone loses' in low-margin game
Vendors and partners need to work together to preserve margins, panel says
Regional channel players should be dissuaded from competing on margins, even if they are pressured to do so by their vendor-partners, according to Khalid Laban, CEO of Oxygen Middle East.
Speaking at a panel discussion at yesterday's Channel 2.0 Conference, Laban said that the job of channel players was to own the relationship with the customer, and not only to sell boxes at price points that constitute razor-thin margins.
"The vendor pushes the channel to close the deal and everyone competes on margins. Everybody loses here except for the vendors," he said.
"The channel should do the account management, and educate the customer on the value of the products. It has to be teamwork. The vendor does not have the ability to babysit the customer, but the channel does have that capability."
Countering to speak on some vendors' behalf, another panel member, Taj ElKhayyat, regional vice president at Riverbed Technology, said that some partners become too reliant on their vendors, leading to situations where they can only compete on price.
Though he was in agreement that selling to end users should be a team effort between a channel partner and a vendor.
"The vendors' responsibility is to make sure that we provide the channel community with the right tools, the right skills and the right expertise," he said.
"A mistake is where the partner becomes too dependent on the vendors. There has to be a strong unity between the different components of the market."
However, ElKhayyat said that it was on the vendors to ensure that partners didn't compete on razor-thin margins. He claimed that the vendors can control the margins of their partners, and that, through selling solutions that address real business concerns, margins can remain intact.
Indeed, he said that channel players could provide an essential gap between line-of-business owners and technology leaders - thereby creating compelling reasons for investing in certain technologies.
"The line-of-business owners have business needs; they don't care what's behind the black box," he said.
"We need to create tech champions and to convince the line-of-business buyer. There has to be a bridge between the technology understanding and the business understanding of the product."
The Channel 2.0 Conference took place at the Murooj Rotana in Dubai, and was sponsored by du, Eaton and Mindware.