South African networking vendors are coming under increased pressure from their U.S. operational management. In some instances this has led to the temptation to increase the number of distributors and resellers at the expense of the user.
According to Martin May, African director for Enterasys Networks Inc., the key for vendors wishing to compete, in an increasingly cut-throat market, is to develop and maintain a loyal and successful channel.
?The temptation to increase distributors and resellers, in order to drive numbers has, over the years, shown to be a strategy which has led to market confusion and channel resistance,? comments May.
However, focusing on a loyal channel base, which has the ability to mutually grow business with the minimum of conflict, is proving to be a sound long-term strategy, he says, and May believes this plan is beginning to bear fruit for Enterasys.
?It is key for a channel partner to make good margins. This will enable it to provide better service to the installed customer base. Generating a margin war between multiple partners ultimately defocuses the partners from a particular vendor?s product, and reduces a reseller?s ability to keep up to date with training commitments, service/maintenance stock and new technology developments,? explains May.
The net result is that the end-user is now dealing with a channel partner who is not adding significant or meaningful value. Creating a channel strategy which sees partners perpetually chasing a quick buck, will leave the end-user frustrated, he adds.
?A vendor?s ability to run an ethical business and channel structure while still remaining market-competitive gives the user a focused business partner, and results in solid annuity income across the channel. Ultimately the real money still lies in services -- channel partners need to be in a position to deliver meaningful service -- but this can only happen when a vendor delivers decent margins through a focused channel strategy,? May concludes.