The Right Balance
Over the past several months, vendors that used to swear by the strength of their direct-sales forces have been trying to build effective channel strategies. Companies in the process of major transformations include Sun Microsystems, EMC and Veritas Software. Not too far behind them in terms of finding newfound channel religion are Computer Associates, BEA Software and Oracle.
Driving these religious conversions are market fundamentals requiring these companies to acknowledge that they can't support massive direct-sales forces. Their only alternative is to concentrate their best salespeople on Global 2000 accounts while working with the channel to reach the rest of the market. Many also have recognized that they can rely on solution providers to mine opportunities even in their largest accounts.
What's ironic is that all this is happening as longtime channel stalwarts such as Hewlett-Packard, Microsoft and IBM are finding their channel commitments questioned.
HP built up a direct-sales arm that the company felt it needed to effectively counter Dell Computer,although it is now trying to reach out more to the channel by reorganizing its internal enterprise sales organization.
IBM, meanwhile, professes its faith in the channel while preaching an "on-demand" mantra that appears to be driven largely by IBM Global Services, which seems focused primarily on turning other solution providers into agents for its own services.
And Microsoft continues to give preferential pricing to Dell and is creating agent programs apparently intended to move everybody to a subscription services model.
It appears that natural economic forces are prompting every vendor to find a sensible balance between direct and indirect sales. While today's channel is marked by lots of upheaval, the solution providers emerging from two years' worth of economic decline are going to be stronger than ever because they will finally be able to spend less time fighting with vendors and more time driving demand.
What's the right balance? I can be reached at (516) 562-7477 or via e-mail at mvizard@cmp.com.
