Computer 2000 (C2000) has outlined a strategy for a range of new, tightly focused partner programmes, which it believes will help to accelerate growth as green shoots return to the economy in 2010 and beyond.
Speaking to a group of about 30 resellers at CRN’s Channel Conference, C2000 broadline country manager Lee Perkins said it had, in recent years, transformed itself into a collection of focused, specialist distributors Maverick, Azlan, Brightstar and their stablemates that VARs could use to add value.
“We have all found ourselves pedalling a lot harder, driving more unit volume
but ultimately not earning any more ourselves,” said Perkins. “[For example] what are you getting on VMware licences now five per cent? Three years ago, it would have been more like 10 per cent.”
Total Western Europe hardware shipments came in at $75bn (£46bn) down from $97bn a year ago. The writing appears to be on the wall for traditional box shifting.
As a result, C2000 has asked more from its partners and will continue to take one penny in every pound but in return its partners may get much more assistance in developing their own businesses, he said.
C2000 wants to accelerate partner growth maximising profits for vendors, resellers and distributors by funnelling partners towards focused education programmes, around ProCurve or other brands, for instance.
But the company is still inaccurately viewed by some as a broadline distributor. Perkins said it no longer made sense to offer the lowest prices or to be a mere middleman. And taking advantage of the approaching economic recovery means getting smarter about adding value. That value comes at a price.
“We need reseller expertise. We do not play in the same place that you guys
play,” said Perkins. “But I do not believe that in three years’ time the channel
will be dead. We just need to keep reinventing ourselves.”
C2000 has, over the past 12 months in particular, been investing heavily in business intelligence which might sound like a peculiar thing for a distributor to do to find out what other companies have been doing and what has been going on in the IT channel generally.
“We believe the recovery is more likely to be L-shaped, with growth climbing
up and then staying completely flat for some time,” said Perkins. “We have done
a lot of research including one-on-one discussions with resellers to find
is important to business and what is important to resellers’ businesses.”
Three main themes
Perkins said that cost reduction, efficiency and processes came out top for most businesses. They would invest in technology, but generally only to attain improvements in at least one of those three areas.
“There are some things that are out of our control, such as the challenging economic climate, banking value, credit limits and payment terms. No one talks about the latter but suddenly those things are very important again,” he said.
It is all about how to “elevate” the share of the wallet of each customer and it is increasingly difficult to do that without providing genuine added value. Technology sales might start a conversation with customers, but for sales to create a sustainable and profitable channel, reseller expertise needs to be lifted and used to address customers’ problems, helping customers get the benefits from their technology.
“Market Development Funds (MDF) of years ago could add 2.5 per cent to everything you buy, and there were vendor loyalty programmes which meant that everyone who bought something got two per cent extra,” Perkins said.
“But they have to buy something in the first place. You have to find that initial opportunity to buy.”
C2000 would demand that one per cent from every sale and hoped that resellers would understand that it was necessary to fund effective reseller programmes that would actually accelerate partner growth.
However, the programmes a few of which have already been piloted are not
aimed at every reseller. The aim is to get the right resellers trained up in
various specialisms, and C2000 does not want to dilute the value of the new
programmes. In each, the distributor would work with about 25 partners perhaps
50 or 100, depending
on the circumstances.
VARs that do not like it are welcome to take their business elsewhere, Perkins added, but he hoped most partners would see the value of having targeted programmes rather than just training everyone.
“If we get some alignment between ourselves and stop bickering about silly,
things, real things could be achieved,” said Perkins.
Reseller response so far
C2000 product marketing director Alice Smitheman said six programmes have already gone live and two more are just starting including one for Microsoft partners that had been running for 10 months and involves 26 resellers.
“We do not just push them into a Microsoft training course. We put your guys with them, in front of their end users, and with new stuff what Microsoft calls ‘value-added technology’, such as unified communications,” said Perkins.
One reseller who had been involved said it was hard to quantify the benefits
his company had just started on the programme in the past few months.
“But it is opening doors for us inside Microsoft. They [the partner account managers] seem quite interested in how C2000 is working with us here. So it helps us with our relationship with them as well as with C2000,” he said.
Another C2000 partner asked what would happen after six months or so when the programme had been completed.
“What happens after you do that reseller investment? What is to stop them saying ‘thank you very much, we want our extra one per cent back now’,” he said.
Perkins said C2000 would not stop resellers leaving if they no longer saw the value of continuing in the relationship, despite the investment. There would be secondary programmes that build and develop on the first ones, and resellers would be encouraged to progress through the levels.
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