Why buying from channel partners could be a good deal

NETWORK WORLD NEWSLETTER: LISA ERICKSON-HARRIS ON
NETWORK/SYSTEMS MANAGEMENT
10/03/05
Today's focus: Why buying from channel partners could be a good
deal

Dear networking.world@gmail.com,

In this issue:

* Buying from the channel or direct - what are the sources for
mgmt. systems, services?
* Links related to Network/Systems Management
* Featured reader resource
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Today's focus: Why buying from channel partners could be a good
deal

By Lisa Erickson-Harris

User organizations have lots of choices when buying management
solutions. Many prefer to work directly with the vendor that
created the management technology -others choose to work with a
channel partner that offers many products from different
vendors, simply because they understand their customers' needs.
There is no right answer to which is the better choice. The best
source for any product is generally a matter of individual needs
and preferences.

Channels are a key distribution strategy for many management
software vendors. In fact, they are the ONLY strategy for many
companies. The value is obvious when looking at it from a vendor
or service provider perspective. Channels represent a means to
reaching a market and some software vendors maintain a core
group of dedicated sales reps who are essentially chartered with
building and supporting relationships with channel partners. For
the company, this approach leverages a finite investment in
sales to enable compound growth.

User organizations win in this scenario because channel partners
often have intimate knowledge of a particular vertical industry
or niche. Channels partners are often small and midsize
businesses with a local or regional presence making them more
accessible for many IT shops. In 2002, Enterprise Management
Associates (EMA) conducted a survey of channel partners and
found that two-thirds of respondents focus on a vertical
industry. Many channel partners will focus exclusively on one or
two industries and put together a multi-vendor solution,
integrate it, and provide services to ensure that it is
effective. Channels partners are successful in this endeavor
because they are able to develop closer relationships with
customers than the larger vendors.

Though there are many positive reasons why small and large
enterprises would want to buy through channel partners, there
are also business considerations. Some of the more common-sense
considerations include:
* Assessing the stability of the channel partner.
* Weighing factors that determine the value of the cost
structure - essentially are you getting enough "value" out of
those value-added services.
* Does the pricing model and actual cost make sense in
comparison to other sources for similar products.
* Ensuring that product support is available in a timely
fashion. In some cases, channel partners provide front-line
support, while other support needs are provided by the vendor.

One of the stickiest situations for vendors that sell through
channel partners is channel conflict. Channel conflict occurs
when software vendors are essentially competing with themselves.
Vendors could have one or more channel partners selling into the
same account or even worse, the vendor's own sales team could be
competing with the channel partner. The burden of resolution
rests with the vendor and in most cases, customers and prospects
are buffered from this type of activity. Of course, the flipside
is that IT executives can use this situation to their advantage
in order to obtain better product pricing. However, care should
be taken to ensure that the conflict is not representative of a
broader problem in the relationship between the channel partner
and the vendor.

Channels offer a variety of services covering virtually every
aspect of IT management. To give you some perspective on this,
respondents to EMA's 2002 research indicated that they were
frequently involved in hardware and software sales (92%),
network integration (59%), network design (56%), and remote
network monitoring and management (21%). Other areas of coverage
included various technologies such as storage, Web applications,
and security as well as functional services such as training and
business strategy planning.

Times do change though and product and service offerings must
change right along with current market needs. EMA is conducting
another survey that looks at business practices for channels in
the management software market. We are conducting a Web survey
to explore this subject from the point-of-view of vendors,
channels, and IT buyers. If you could take a few minutes to
share with us your viewpoint, the survey can be found here
<http://emausa.com/surveys/ema_csurvey.htm>. You will be
provided with the final paper when complete. This survey should
take no more than 5 minutes of your time.

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_______________________________________________________________
To contact: Lisa Erickson-Harris

Lisa Erickson-Harris is a research director with Enterprise
Management Associates <http://www.enterprisemanagement.com/> in
Boulder, Colo., a leading analyst and market research firm
focusing exclusively on enterprise infrastructure management.
Lisa has more than 18 years of experience working in all aspects
of IT, including network administration, software development,
product management, and strategic partnership development. Her
current focus at EMA is service-level management, partnership
strategies, and management systems for the SMB/SME environment.

She can be reached via e-mail at
<mailto:erickson-harris@enterprisemanagement.com>
Download a free copy of the new SLM Buyer's Guide at
<http://www.slm-info.org/>
_______________________________________________________________
This newsletter is sponsored by Sybase

It sounds so simple: if you collect enough business information,
you'll glean valuable insights that can drive both revenue
growth and competitive advantage. Along the way, however,
companies are discovering that managing the explosive growth of
online data can prove a formidable challenge. Here's how to
assess your data management style, and maximize your
opportunities to turn online data into business opportunity.
Click here for more on taming the data explosion.
http://www.fattail.com/redir/redirect.asp?CID=116668
_______________________________________________________________
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