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Kiwi resellers see value in vendor programmes

Resellers appreciate the system of investment and rewards inherent to vendor partner programmes.

But smaller resellers may have difficulty investing the time and resources to move up in a multi-tiered system, compared with larger ones that can vet programmes, and evaluate business relationships continuously.

Furthermore, vendors working in a small market such as New Zealand risk losing their credibility if they do not support their programmes adequately. Such support may include protecting their resellers from competitors offering cheaper second quotes, even if at a lower margin. It could also be coordinating lead generation to avoid duplicated marketing efforts from channel partners.

These examples were among the responses to questions posed byReseller News in an attempt to determine if resellers perceive such programmes as more gimmick than business value.

"Yes, there are times when tier levels can be seen as gimmicks," says Steve Rielly, managing director of his one-man shop, Katana Technologies. "Frankly, if there is nothing to back those levels up, like deal registration, protection and active engagement by the vendor when necessary, then I can understand why that is."

Rielly started Katana two years ago after working on the vendor side for such companies as Trend Micro and Symantec, where he helped develop partner programmes. He says he has witnessed deals interrupted by organisations that focus on licensing in situations where a customer requires a second quote.

"There are times when a client has to have two quotes, due to internal policy, on any deal. That second quote has to come from somewhere, and it's usually from an incumbent supplier to that client, and not necessarily an existing partner of the vendor," Rielly says.

"They were not involved in the presentations, proof of concept, or design, but they still thought they should be the reseller because of who they were. The deal went through on two points [as opposed to the 15 points the vendor partner might have received], but the vendor lost an existing reseller, and the client was left in a position of not being able to implement the solution. The new reseller expected the vendor to come in for free and make it all work."

When Rielly was with a vendor, his employer would tell the second company making a quote that the deal was being worked on by another partner, and what the terms were.

"A lot of times, that reseller will go 'no problem, that's fine' because they don't want the same thing to happen to them if [the vendor helps] them out with another deal," Rielly says. "So partners can be quite nice when it comes to that, and other ones, not at all, they just want the deal."

Vendors set the value

For Alan Chew, managing director of Hamilton-based ICT solutions provider Houston Technology Group (HTG), the quality and the value of a partner programme depends on how much the vendor invests in the programme.

The company, which has a staff of around 30 and a branch office in Tauranga, is a Microsoft Gold Certified Partner, an HP-authorised dealer, a VMware partner, Cisco partner and, as of last year, an EMC partner as well.

Chew has mixed feelings about these programmes. He considers HP's "a complete failure".

"We are an HP gold partner and it has almost no value because they don't promote [it] at all," says Chew.

On the other hand, HTG gets a lot of value from its Microsoft certification, despite having had to invest weeks of training to get it. Chew considers this "a very important credential" for the business. Among other things, he thinks it is "good marketing value" and accounts for its success on Microsoft's heavy investment in the programme.

In terms of sales support from the vendor, Chew believes HTG's location, away from big city centres, means that "it is not as convenient for the vendor" to meet with them and provide support. He does, however, consider training invaluable and an investment that his company must make, as it is also a big point of difference against the competition.

"We get almost no free training unless it's web training," he says, adding that "classroom training", which is paid for, is always better anyway.

Nigel Rice of Te Puna-based Acre PC is part of the Western Digital programme, but his company, which is run by him and his wife, and employs several contract workers, will likely never realise the full benefits of the programme due to company size.

"We don't actually use it," says Rice. He says that "the support [from the vendor] is there anyway" if the reseller needs anything, with or without partner programme and, in the case of Acre PC, the company is "too small" to get any other benefits.

As far as technical training provided by the vendor, Rice considers that "if someone is supplying a product that we would like to sell and [the product] requires training, they should offer it" for free.

Rice says he realises it is only because of his company's small size but says he doesn't see "much value" in signing up for partner programmes. "The volumes that we sell don't justify it."

One size does not fit all

For the largest resellers in New Zealand, vendor programmes enter a very different calculation, as organisations have resources to devote to continuously evaluate a programme's merits.

According to Adam Dodds, Gen-i's alliance and product manager for network service and infrastructure partners, the benefits and cost of a programme are less important than vetting a programme and having time to evaluate a vendor relationship.

"I look at this as a balanced argument," says Dodds. "Gen-i shouldn't enter relationships where it doesn't understand already what the benefit is going to be, so we have a rigorous process that looks at who we're going to engage with and how, so it's about strong governance."

For a company the size of Gen-i, which has 15 full-time equivalent employees as part of one vendor programme, it takes six to 12 months to get "real insight" beyond the value of a programme to its "bottom line benefit". These benefits come a long time after an up-front investment, which makes choosing partners more difficult for smaller companies.

"The realities for those tier-twos and tier-threes is that any investment hits the bottom line straight away," he says. "This forces choice."

In general, Dodds says partner programmes are "significantly similar in the way they operate" and as a "bottom line investment, there's very little differentiation."

But, he says, they are important to ensure that the vendor, distributor and reseller are all talking the same language when delivering a solution.

"If the distie and reseller and the customer are all aligned, then [the programme is] positive, and it comes to a matter of how to manage pipeline and account strategy," he says. "When they're not aligned, things like lead generation can be staggered and show up as confusion to the customer."

CodeBlue is well versed in vendor programmes, having over 30 formal partnerships established with both distributors and vendors in the country. For general manager Ian Funnell, there is definitely added value in establishing such relationships.

"CodeBlue is involved with a wide array of vendors," he says. "We have to have these relationships in place."

Among the benefits that CodeBlue gets from the programmes, Funnell mentions the joint marketing campaigns and the many opportunities for training provided through the partnerships. The number of sales leads generated through those programmes are another big value-add, he says.

Funnell says programmes, in general, aren't too strict in the sense that they can be customised to meet the needs of the reseller. "When they see us making a commitment they value that and are willing to adjust," he says.

Funnell says that sometimes what can be seen by the vendor as an incentive to the reseller is not necessarily so but there is a level of customisation that allows both parties to adjust the programmes. "We have never had too much of a problem," he says.


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