You would have thought that the increase in demand for back-up solutions would have meant steep growth and profitable opportunities across the channel. After all, the technology is more interoperable and easier to use, there is an array of solutions to choose from and the end-user base has been growing.
But this growth has generated a rush in vendors trying to increase their market shares. To increase sales, the backup market leaders have recruited more and more resellers, saturating the channel. This has led to increased margin pressure among top VARs who, not being able to differentiate themselves at the product or service level, are having to slice their margins to secure contracts. Some resellers have also come into competition with the direct sales teams of their own vendors and lost substantial bids.
Such conflict is often the result of poor or absent lead-registration programmes. This is not the only hurdle for resellers wishing to partner with the market leaders. Cumbersome marketing procedures and poor technical support are two more examples of the obstacles resellers must overcome if they wish to carry the leading brands.
Also, the smaller resellers are often left to wonder whether the vendor actually cares about their indirect sales teams at all, or whether they are simply there to fill in the gaps that the company leaves behind.
But all is not lost. The smaller backup vendors and resellers, the ones who understand how important it is to focus on a small number of resellers who share the same values and objectives as the vendor, are in tune with the channel’s needs.
Today, end-users are more open to new ideas and new products. The old adage that the established brands offer more security and stability is no longer true. With huge market share comes complacency, and this has led to the products that no longer meet needs. The result is end-users buying their solutions because of the perceived safety net, not because they successfully address the requirements.
End-users have to be smarter with their human and financial resources, as a result they are opting to go with smaller players. This is a great opportunity for resellers.
So, while the current situation is not ideal, the indifference shown by the bigger players is something that the smaller players should capitalise on for the ultimate benefit of both manufacturers and resellers.
Sean Jackson is EMEA marketing director at BakBone Software.
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