Network Associates' (NAI) channel strategy has come under fire following the vendor's decision to downgrade its targets in response to a sales slump.
The network security vendor cut second-quarter expectations, admitting problems in the first quarter would be ongoing. Bill Larson, chief executive of NAI, said it would not take 'significant' channel orders during the period, blaming a sales shortfall on earlier than anticipated year 2000 lock-downs and a lengthening sales cycle.
But sources have attacked NAI's policy of insisting that distributors buy licences up front as a problem.
One industry insider said: 'It sounds as if NAI has overestimated its licensing business and stuffed the channel. It's always viewed with suspicion when a vendor has to ask for money up front. Intel has tried it in the past and failed. It leaves distributors in trouble if sales come in short, unless there are agreements in place to get credit back.'
Richard Parkinson, European channel director of NAI, denied distributors would suffer as a result of the sales revision. 'We have more weeks in the period than the expectations require. To adjust, we will not be taking orders and shorten the number of weeks in the period. We will do it now and do it quickly, rather than spread it out over the next quarter,' he said.
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