Networking market changes mean resellers should reassess

Networking resellers should take note of the number of vendors pulling back resources, argues Jeff Prince

Prince: Networking vendors have been making cuts, so resellers might need to do the same

The networking sector has changed dramatically in recent months following the credit crunch. We have seen some vendors, including major players, enter bankruptcy. Others have survived subject to acquisition.

Some have slashed the margins offered to resellers, who now may find themselves at a crossroads for their sales strategies and partnerships.

Resellers must evaluate the changes to the networking landscape and consider whether or not their partnerships are viable long term.

Resellers should consider whether better opportunities exist in the market.

Look at your margin. Ask whether the product is over-distributed – how many resellers offer this product in the same city or postcode?

If the market is saturated, the long-term margin potential remains bleak. Why not consider alternative products?

Resellers should examine whether their vendors are investing in the UK market. Some vendors are pulling resources out of the UK channel, which should make resellers question the long-term viability of the partnership.

Who is investing in the type of local sales and technical support that will enable them to ensure their customer deployments are successful, creating the opportunity for repeat business?

Resellers also need to look at diversifying their portfolios. One approach is to assess if the products their vendor offers provide cross-selling opportunities with complementary products.

The Ronseal "does exactly what it says on the tin" tagline often applies – many networking products only do the basics and leave no scope for selling additional products or services.

If the vendor is using a pan-European distributor, can you as the reseller add value to the deal?

If not, consider a vendor working with a local VAD that could assist you in selling more products as a result of the extra services that you could offer.

How many resellers could say your networking vendor ticks these boxes? If they don’t, it’s time for a change – and change can be good.

Jeff Prince is chairman and chief technology officer of ConSentry Networks