Monogamy versus polygamy: Which vendor strategy is best?

Tom Wright
clock
Monogamy versus polygamy: Which vendor strategy is best?

One of the eternal questions facing all resellers and MSPs is whether to back one vendor or many. Putting the respective sides of the argument are DTP's Howard Hall and CAE's Justin Harling

DTP and CAE are two of the most respected names in the UK channel, both regularly posting sturdy financials and winning awards at vendor partner conferences.

But despite playing in similar spaces, the two organisations have fundamentally different approaches.

DTP has built up a reputation over its 30-year existence by partnering solely with HP, while CAE prides itself on its high accreditations with multiple vendors.

Both firms attribute their success largely to their differing approaches.

In its most recent accounts filed with Companies House, CAE pinpoints its "fundamentally manufacturer-agnostic" stance as key to the strong revenue growth that has propelled it towards the £100m revenue barrier.

DTP, meanwhile, claims it "differentiates itself by its loyalty and investment in being HPE and HP experts", as opposed to nameless competitors it dubs "multi-brand supermarkets".

Howard Hall, managing director of DTP, said this allows the firm to stand out from the broader channel players.

"Being single brand means our techies can be deeper in the technology because they're not multi-branded," Howard Hall, DTP

"The difference between value and volume is fundamental," he said. "We do a lot of volume business but while we're doing that we're a value player.

"We are trusted and we do a lot of direct fulfilment in a lot of HP Inc's global deals for them, just because we're a safe pair of hands."

Hall said that HPE and HP Inc put a lot of faith in DTP because of the loyalty the reseller has shown.

This tight relationship, he said, means that the two organisations often work closely together and make jointly branded bids for large projects, which see employees from both work on solutions.

"They wouldn't back us if we were a multi-vendor on that particular bid because they wouldn't trust opening the kimono with us," he said.

However, Hall added that this type of relationship needs to be managed closely.

He explained that it is important for DTP to keep HP Inc and HPE honest to ensure they don't take the reseller for granted.

"We still have to sell as much to the vendor as we do to the end user," he said.

"The other side is that we might be seen as easy. They may not need to spend as much effort on us because they know they already have our business, so there's a fine line between the two."

Watford-based CAE has a business model opposed to DTP's, and works with a handful of vendors including Cisco, IBM, NetApp and both HP organisations.

"It's not just about the customer. Sometimes we can attract staff because they want a more varied experience and exposure to different technologies," Justin Harling, CAE

CAE chief executive Justin Harling told CRN that the reseller's approach is a response to demand from customers, who often want technology from a range of vendors in the outcome they are buying.

"For us that multi-vendor part is all to do with the customer and what they would like, which is choice and being able to understand which options are available within that complete solution, he explained.

"We still find that if customers always made what could be regarded as perfectly rational decisions then perhaps that would differ, but there will always be experiences of different technology and manufacturers that will weigh on the final decision. For us to take all that into account we think it is important to have that breadth."

Harling, however, said he does not take this approach for granted, and warned that all multi-vendor partners need to be aware of the demands of maintaining high-level relationships with so many vendors.

"There is a big upside there, but it is a conscious decision because the time, effort and resource that goes into that is significant," he explained.

"It is incredibly difficult. "It takes dedicated roles within the business to do that because there is always a significant amount of change within those partner programmes and it means having to invest in the training and everything that goes into it, but that is still important.

"It means that we are able to have and demonstrate a capability as opposed to it being logos on a page."

This is something that Hall claims is a benefit of working with fewer vendors. He explained that DTP is able to build tight relationships with HPE and HP Inc because these are the only relationships that the firm has to manage.

As a result, Hall sits on HPE's Worldwide Partner Council as the UK representative, which gives him a direct line to CEO Antonio Neri and other members of the senior leadership team. Closer to home, HP Inc's UK and Ireland channel boss Neil Sawyer spoke at DTP's sales kick-off for its current financial year.

This kind of relationship, he said, is harder to build if you are juggling multiple vendors.

The same can be said of DTP's technical abilities, Hall said, with the focus on one vendor meaning employees can spend time building up technical know-how.

"Being single brand means our techies can be deeper in the technology because they're not multi-branded," he said.

"They're very highly accredited in the HPE brand. Some of our subject matter experts are as good as they get in the industry, and we have been parachuted into other resellers' problems by HPE to sort it out - that's once or twice every quarter."

This expertise can be important for individual employees inside a reseller, but Harling said some techies enjoy the variety of working with multiple vendors.

On some occasions the firm's high accreditations with the likes of Cisco and VMware have brought in new talent.

"It's not just about the customer," he explained. "Sometimes we can attract staff because they want a more varied experience and exposure to different technologies.

"They want to be able to grow their own careers. If they're pigeonholed in an organisation they can't do that, but if they come to us they can spread their wings a little bit which is good for them in the long term."

Head to head

Having multiple vendors in its portfolio gives CAE more choice when it comes to building a solution for customers, but there will inevitably be times when two vendors offer equally viable options and both want in on the deal.

Harling said that in these situations, the reseller has to be firm in its choice and keep communications clear between all parties involved.

"We deal with it early and we never switch, because that's the only way to keep trust and integrity," he said.

"We need to identify early what we think is the best choice, make that choice and stick to it.

"If we do that, it is possible to manage it. If you don't do that, it can be incredibly damaging to relationships. Those are probably the strictest rules.

"Everyone has to know where they stand because that ambiguity can damage a relationship."

On the flip side, Hall said that DTP has once or twice found itself in a position where it didn't have enough options for a particular customer.

These situations led to the only two occasions where DTP looked to other vendors to plug gaps in its portfolio.

He explained that DTP was recently struggling to win deals in the low-end flash storage space, with HPE's 3PAR being more expensive than competitors.

To mitigate this, DTP was in the process of becoming a Nimble Storage partner, only for HPE to acquire Nimble.

A similar thing happened earlier in DTP's life when the firm was not seeing great success with HP's PC. In this case DTP partnered with Compaq, which was then acquired by HP a few months later.

Room for manoeuvre

Harling said that CAE is also not opposed to adding more vendors to its portfolio, explaining that sometimes the offering is expanded as a result of customer demand, and on other occasions when CAE's team has identified a vendor that would complement the current line-up.

"There have definitely been times when it been customer driven - they'll ask about something and we'll look at it, but a lot of it comes internally in terms of people having conversations.

"Both parties have to understand why you are getting into the relationship; doing that that always helps," he said.

"If that relationship is going to be relatively low key then we find it's better to have that conversation upfront rather than promise everybody the world and then under-deliver. It is about those very honest conversations that say ‘this is why we are looking at the relationship'. If you can set the expectations right, it's OK - if you don't, you'll waste even more time and effort."

More on uncategorised

Channel Awards

Sara Yirrell
clock 05 November 2010 •

Quiet period

Sara Yirrell
clock 04 November 2010 •

Now I get IT

Sam Trendall
clock 01 November 2010 •

Highlights

'So many vendors out there are monetising misery' -Trellix CRO on rational behind new name for McAfee and FireEye business

'So many vendors out there are monetising misery' -Trellix CRO on rational behind new name for McAfee and FireEye business

New name promotes nurturing and supporting role of cybersecurity, CRO Adam Philpott tells CRN

Josh Budd
clock 19 January 2022 • 3 min read
Dell: New incentives for UK partners as data storage services come to Apex

Dell: New incentives for UK partners as data storage services come to Apex

Partners will be able to earn incentives when selling the solutions on a referral basis

Dan Bennett
clock 19 January 2022 • 1 min read
SoftwareONE and AWS ink new multi-year deal

SoftwareONE and AWS ink new multi-year deal

The agreement will include an expansion of SoftwareONE’s Simple for AWS offering, joint go-to-market investments, training for the next generation and more

Dan Bennett
clock 19 January 2022 • 1 min read