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As always, money talks, and when it comes to channel partners' perceptions of the IT vendors they work with, they care deeply about their ability to create services around vendor products and generate additional revenues, as well as responsiveness and, of course, good technologies.
A 2014 Channel Directions survey conducted this summer among 337 solution provider respondents in Canada and the United States identified the 15 most important IT vendors in terms of criticality to the respondents' businesses. That list, in order of strategic importance to survey respondents, is Microsoft, VMware, Cisco, HP, Dell, EMC, Citrix, Amazon, IBM, Symantec, Google, Lenovo, NetApp, Intel and Oracle. Among those vendors, Darren Bibby, vice president of channels and alliances research at IDC, said Cisco, IBM and Microsoft deserve to be at the top of the list of vendors that are good at working with partners. He also commended Citrix and HP for their channel-related efforts.
The partner model has changed from a focus on resale and margins to one of enablement and more concentration on services, Bibby said. Partners ask, "What vendor can help my business to make money?" he said. That enablement could include product training, education on making money on services related to those products, as well as business consulting to help partners make the transition to new technologies and business models like cloud and managed services, he said.
"That's a transition from collecting upfront revenue to streaming revenue and cash flow over time," he observed. "It's such a massive change; a lot of those guys need help making that change."
In 2005, the average U.S. solution provider had 53% of its revenue coming from the resale of products and services, according to IDC. In 2013, that had decreased to 36%. "That means a bigger proportion of revenue is [coming] from their own services and sometimes they're making their own software and creating their own products," Bibby noted.
"I think the criteria for the very best [IT vendors] has changed quite a bit," said Ryan Morris, principal consultant at Morris Management Partners, a consulting firm for IT channel companies. The top criterion used to be whether a tech product was considered the best in its category. Now, he said, "if your product is arguably similar to other products, I'm going be more compelled by other things than technology, and that includes the business relationship and channel strategy, and if I'm able to do business with you in a preferable way."
"Across the board is the money question. ... We're not in business to just do technology; we're in business to be profitable," Morris said.
Joshua Libermanpresident, NetSciences
The partners we spoke with had strong opinions about the most important factors in a vendor's relationship with partners -- as well as how their vendor partners are performing.
"Our No. 1 factor in dealing with a vendor is responsiveness to us" -- whether from a technical, architectural or support perspective -- "and the quality of products and ongoing support for us and their product,'' said Joshua Liberman, president of systems integrator and IT service provider NetSciences Inc. "No. 1 for us is, 'How hard is it to turn the wheel?' Some [vendors] are outrageously difficult."
For Grant Sainsbury, vice president of advanced solutions for global system integrator and solutions provider Dimension Data Americas, the biggest requirement in a good vendor relationship is a product that's relevant to Dimension Data's clients. "At the end of the day, all business is about is satisfying clients' needs," Sainsbury said.
In addition, he said, "vendors who hold meaning for us are those that we can create and deliver services around to meet the needs of our clients" and that are complementary to the vendors' products and will help Dimension Data generate revenue and profit.
Some of Dimension Data's best partnerships are with vendors that take time to "understand us as a partner and how we go to market and what our value proposition is. ... Great partners invest in us as a channel for them." Dimension Data is one of Cisco's biggest partners and considers the networking vendor a strategic alliance partner. Sainsbury cited Cisco; Dimension Data's other strategic alliance partner, Microsoft; EMC; VMware; NetApp and Juniper Networks as examples of good vendor partners.
Liberman said he considers Datto and SonicWall good vendor partners. In one year, Datto has "done more [than NetSciences' other vendor partners] with education and partnering events, [as well as]outreach to their partner community. … They never work around their partners and they've never done anything we've seen other partners do in terms of going direct to customers," he said. "Almost every other vendor has."
SonicWall's partner program changed when it became part of Dell, Liberman said, but he is pleased that SonicWall still holds its annual conference. "We were worried that would disappear. Their partner program was so good to begin with [that] even with slight degradation with Dell nipping at their heels, I'd still rate their partner program as one of the top two or three in the industry."
While praising Datto and SonicWall, Liberman had critiques for other IT vendors the company partners with, especially those that he said "are really walking away from the SMB market in their rush to be cloud-defined. … They're starting to pretend the world is an enterprise world." He put Intel, Symantec and Microsoft in that category and added, "Intel has decimated the SMB world." (He did credit Intel with having the best hardware replacement program.) He also took issue with Lenovo for being "a tremendously bureaucratic animal."
In response to Liberman's claims, a Symantec representative said, "We've renewed our efforts with SMB-focused partners, and Symantec Endpoint Protection. cloud is an SMB-focused offering with flexible deployment options."
According to Todd Garrigues, Intel's director of North America reseller channel programs, SMB is one of the largest segments in the company's channel program, and the company recently launched new demand-generation tools in the space.
Microsoft, for its part, countered by saying the small- and medium-sized business market is "incredibly important to Microsoft," according to a company representative. "Windows Server 2012 R2 came with new features and capabilities that were previously only available in the Essentials edition of Windows Server, which "opens up a wide range of new deployment scenarios for both small and midsize businesses that take advantage of these features," the spokesperson said.
Lenovo did not respond to a request for comment regarding Liberman's remarks.
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