Distributors feeling the heat

Under fire: Although many vendors are going to larger resellers direct, some say that distributors will continue to play a pivotal role

Concerns are mounting that security distributors are suffering an identity crisis and are struggling to justify their role in the channel.

Security vendor Websense sent shockwaves through the market last month when it revamped its distribution rebate structure (Channelweb, 22 September). Its four distributors were briefed to focus on generating new business with unmanaged resellers and will now receive broadline margins for transacting with larger, managed resellers.

Elsewhere, a slew of security vendors are cutting distribution out of the loop altogether by forging direct ties with their top resellers.

In each case, the motive is the same, with a growing sense that security distributors are no longer adding the value they once did and are merely shuffling the top accounts between themselves. The bleak economic backdrop has also made a one-tier channel model more appealing as vendors chop unnecessary costs.

Going direct

Etienne Greeff, director at security integrator MIS, said: “The top Websense, Juniper, Check Point and RSA distributors are just chasing after the larger partners and are not generating incremental business or adding value for the vendors.

“Their job should be to find and grow new resellers and to teach them about security, just like 10 years ago. But they are not doing this.”

Greeff said Clearswift had recently forged direct ties with MIS and claimed other big vendors harboured similar plans. On a global basis, Check Point has made no secret of its desire to work directly with more resellers, while IronPort continues to service its top VARs directly despite having recently moved back to a recent distribution model (Channelweb, 20 June).

A host of manufacturers, including Check Point, Juniper and Blue Coat, have also rolled out direct support programmes, meaning their resellers no longer have to rely on the distributor for support.

“We had been screaming out for this because working with a distributor just adds delay to the process and we have more qualified engineers than the distributors,” said Greeff.

Greeff claimed distributors will be increasingly left out in the cold as the economy forces vendors to review their supply chains and security resellers grow in size.

“In the past, distributors were more powerful, but the balance has shifted because resellers have gained more knowledge and critical mass. Vendors need resellers more than distributors now,” he asserted.

Jez Turner, sales manager at VAR Foursys, agreed: “Distribution is okay if it adds true value in support or services, but because we focus very closely on our core vendors our own technical teams have superior knowledge to the distributors.”

Unsurprisingly, this is not a view shared by the distributors.

James Pattinson, security director at DNS Arrow, joined the distributor last November following a stint at vendor SurfControl.

“Vendors are looking at hybrid channels or managing resellers directly and fulfilling them through distribution,” he said. “Having worked at a vendor and a distributor I see things vendors are missing.”

Pattinson said DNS Arrow is seeing rising demand for its multi-vendor marketing campaigns, stressing that some larger VARs lack marketing resources.

A new focus

Kay Bruen, UK managing director of distributor Westcon Security, agreed that vendors are demanding that their distributors focus more on unmanaged accounts.

But she denied that wholesalers no longer have a role to play in volume business, even with established vendors such as Check Point.

“It is a dangerous path to take for a vendor to think they can take the cream and leave distribution to mop up the rest,” she said.

“If you take a firm like Check Point, its technology is complex and there is a large amount of legacy knowledge required to understand its portfolio. We also have unparalleled knowledge of licensing.”

Bruen added that distributors will continue to play a vital role around credit and global logistics, especially for large service providers.

“The unique selling point of Westcon is we can ship into 160 countries and understand the local customs implications and how to handle freight,” she said.

Pat Dunne, senior director of the UK and Ireland at Websense, said the distribution shake-up had worked well, and that its distributors now understood their new role.

And he warned rival vendors to think twice before abandoning distribution altogether.

“Clearswift is taking a lot of business direct, a few others are doing the same and some have gone from direct to indirect and back again. This makes it difficult for the reseller to invest, because they know the model may change. The channel wants a consistent model,” he said.