Cloud sheds backup

July 26, 2010

Look out George! Next time, you might get hit by an EMC backup server falling out of a cloud.

just missed the piano

Just before the piano fell

Companies seem to have voted with their feet and EMC recently announced they are pulling their “Cloud backup  service” Atmos out of the Cloud because not enough customers are interested.

Why on earth would one need Cloud backup if one has Cloud applications!? In fact, come to think of it, EMC should be offering the exact opposite: old fashioned physical backup for Cloud applications…It just goes to show that Cloudwashing isn’t enough. Before you put something in the cloud and offer it to your clients, one would be advised to check whether there is any demand for it.

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Ready, steady,…go channel! Part 3

July 1, 2008

Part 3: How will you roll-out your plan?

Working through a channel doesn’t mean you can just relax and wait for it all to happen. On the contrary, your initial efforts will need to be significant if you want your channel sales to take off.

Build the right team to work with your channel 

  1. Consider recruiting an experienced channel manager rather than promoting one of your direct sales people
  2. If you can afford it, create a channel marketing position
  3. You can adjust your order management team
  4. Channel partners are good at using on-line tools. Are yours ready?

Is your finance organization ready for a different business model?

  1. You will be collecting larger amounts with different payment terms and different payment “habits”. Resellers are often strapped for cash…
  2. You will be paying out money or making credits in the form of Co-op advertising support or Market Development Funds. This doesn’t happen in a direct model
  3. You might need to pay finder fees to people you aren’t actually trading with such as Influencers (this concept is one of the most difficult for financial departments to cope with)

Can your marketing policy and organisation handle the requirements of your channel strategy?

  1. You probably need to re-balance your marketing budget
  2. Your partners will expect support through co-operative and market development funds (Co-op and MDF in channel lingo)
  3. At some point, you will need to build your brand and product awareness in the channel, should you plan a Marcom budget for this?
  4. How will you help your channel promote your products on their web sites?

If you actually ship stuff:

  1. Check your packaging (cartons, cases, pallets, containers, etc…)
  2. Check your part–numbers (UPC codes are sufficient)
  3. Does your price list provide for volume orders?
  4. Are your logistics ready for a change of pace?
  5. Do need the logistics you had up to now?

If you sell software:

 Can your systems report by whom the revenue was generated

If you provide services

Can your channel partners resell them (do they have a part number)?


Ready, steady,…go channel! Part 1

June 18, 2008

Can you tick all the boxes before jumping into the channel?

 

In the last 10 years, waning ICT growth in the enterprise segment has forced most actors to re-examine their routes to market in order to make sure their products and services are available where their prospective customers expect to find Preparing to swim the Channel...them and where the real growth is. Without necessarily taking a “bottom-up” approach, the whole ICT industry has come to the conclusion that it would only be able to access certain segments via an indirect channel. This is because average size companies are buying a lot of ICT products and services but they rely on their channel partners to act as an outsourced ICT department. Certain major IT manufacturers have recently made their “coming out”, confirming a strategy they weren’t necessarily admitting to in the recent past.

 

This short series is built from experience and attempts to list a number of areas you need to have thought about before you jump into the channel.

 

Part 1: Do you have a strategy?

For a start-up business, this is a founding decision and you will be building your whole business model on your route to market strategy. But if you are already selling direct, you need to make sure this fundamental move is not going to unbalance your whole business, resulting in a potential collapse of your overall sales and often causing frustration within your own organisation and amongst your newfound partners and existing customers.

 

  • Why are you making this move?
    • Can you give your prospective partners a good reason for the change?
    • Does everyone in the company understand the reasons?
  • What is your vision?
    • Your new partners will be reassured to see that you actually have one
    • Working with partners requires long term investments on both sides
    • If your potential partners don’t trust you they won’t play

 

Coming soon: What is your plan? 


Will Dell’s channel strategy be successful…who gets the last laugh?

February 13, 2008

laughing-hyena.gifThe industry is all excited about Dell’s announced channel strategy. People are questioning whether its a shrewed move…well I think it is!

The fascinating thing as that people missed the signs two years ago. Check this out the article referred to is only 18 months old and the journalist was saying that the attempt was doomed, that Dell would never formalize a channel strategy  because it “owns the customer“.

I believe Dell are right and they will succeed, simply because they recognise that they can’t own all the customers. This is great news for the ICT Channel since it confirms in no uncertain terms that Vendors cannot access certain categories of customers without partnering with the Reseller community. How many predictions have we seen in the last ten years, announcing the end of the Channel, the end of the Distributor, and so on…in fact, what we are seeing is a real coming of age of our industry.

As technologies converge, the Channel is diverging. Today, channel partners have a much more precise understanding of their own business and are more selective when it comes to deciding what products and services they will provide to their customers. The Vendor is now just a supplier amongst others and if his products don’t meet the channel’s customers’ expectations, they will look for something else.

The added value provided by the channel is becoming increasingly important to certain categories of End Users who see their channel partner as an outsourced IT department and this is where Dell needs the channel. And guess what: that market segment is where all the growth is for the years to come.

I happen to know that Dell have done their homework, making sure there will be no conflict between a nascent channel and their existing sales organization. Agreed, they will be circumventing the Distributor, offering a full financing scheme directly to their channel partners, enabling the partners to absorb the complex payment terms imposed by customers in certain countries such as France, Italy, etc…

Dell have a solid range of products and a solid reputation they have built despite the initial criticism. They also have a solid determination: those of you that have been around long enough will remember…everybody laughed when Dell appeared and said they would sell direct!

As the French say: “Rira bien qui rira le dernier!” (The last one to laugh will really laugh)


Is the I.T. channel suffering from the E.T. syndrome?

November 29, 2007

human-touch.jpg For many years (ever since I saw the film E.T.) I have believed that distance makes people more aware of what is going on back “home”.

As a Reseller (some say Partner), when you are exposed to the daily difficulties and dangers of life in the “Field”, trying to sell the right solution to your customer, you quickly become painfully aware of what your favorite Vendors should be doing to make you want to sell more of their products.

The frustrating part is that although you have often spent time and energy explaining these simple things to the Vendor’s Channel management team, you are either faced with empathy (and therefore frustration because your contacts cannot help you due to the bureaucratic nature of today’s global channel programmes) or a clear lack of understanding of what seems so simple to you.

As Channel Consultants, we then get hired to tell our Clients what they have already been told by their Partners:

  • Channel Partners don’t all want Leads if they’re not qualified – but some do
  • They don’t all want rebates (as opposed to upfront discount) but some do
  • They don’t all want the Vendor to get involved with their customers – but some do
  • They don’t all want to be able to service the Vendor’s products – but some do
  • They don’t all want online sales training that takes their sales people off the road for 15 hours per month – but some do
  • …etc…
  • …etc…

Do you get the picture? Abraham Maslow, a famous motivational theorist once commented: “If the only tool you have is a hammer, you will see every problem as a nail.” We’ve all heard that one before…

So where did I get this E.T. thing from? Very simple: Vendor’s “Partners” often feel like E.T.: they feel they have been abandoned out in the field, they have been trying to phone home but just can’t get through to someone who will hear them out.

These days, any FMCG Marketing company is capable of sending a personalized direct mail piece to each one of 25,000 households in a database but our Channel Marketing organizations still seem to be trying to cram square channel pegs into round channel program holes, relentlessly applying Henry Ford’s famous “…you can have the Ford T in any color as long as its black…”

Instead of using the phenomenal power and flexibility provided by the hardware and software designed by our own industry, we are regressing, taking people out of the field to reduce costs, thus eliminating the only flexible stage of our relationship with our Channel Partners.

So is everybody doing it wrong? Thankfully not, but when you start probing your partners about who does it right, the same names always come up. And what they are doing is pretty basic: the empower the people who listen to what the Channel wants and they design sufficiently flexible programs and processes to delight more Channel Partners who can pick and choose what they like.

Easy!


Why is it easier for Dell to run Influencer Marketing activities?

June 24, 2007

In an indirect channel model, Influencer Marketing is hard work. The main problem for Vendors selling through an indirect channel is that they are not actually in any form of business contact with the Influencer. It could be a Consultancy or a System Integrator, but they are not reselling the Vendor’s products, they are not either necessarily in a business relationship with the Reseller or the Distributor.

So how do you reward an influencer for convincing their client to buy a particular Brand? The only way is to write him a cheque and that is where things get difficult. What audit trail do you have? The Influencer says he convinced the customer to buy your stuff, the Reseller invoiced and installed it, the Distributor bought it from the Vendor and shipped it to the Reseller. You now need to convince your Finance department to write a cheque…not easy.

In a direct sales model, companies like Dell actually invoice the End User that was “influenced”. They therefore have direct visibility of the whole business process and can therefore pay a commission to the Influencer who reported the opportunity.

In the Pharmaceutical industry, the influencer is the Doctor (GP) who prescribes one medecine rather than another. And in certain countries, the Pharmaceutical companies monitor the sales of their branded molecules via the pharmacies situated in the vicinity of a medical practice. This gives them a view of which GP is doing a good job at promoting and prescribing their products. They might then invite the most influencial GPs on a study tour of -say- the Seychelles.

In the IT business, Vendors go to a lot of trouble to influence the Influencers. Its tough, but if you crack it, it really does pay off.


Backdoor visits: how easy are you to do business with?

May 29, 2007

whouse.jpg Whenever I visit a distributor, I always make sure I pay a visit to the warehouse manager and invite him to show me anything he believes we could improve. If possible, I would ask one of our logistics managers to come with me, provided they can share the same language. Try it if you have never done it before. You will discover the impact of the cost savings policies your company implements without necessarily realizing that the cost is actually only being transfered elsewhere.

Distributors quite rightly represent themselves as a bank and a conveyor belt between the Vendor and the Channel Partner; a direct extension of the Vendor, so when we change the way we package or ship something, we should remember that our logistical extension is going to have to cope with it. They also need to operate efficiently so we should always make sure that our decisions aren’t at the cost of our Channel and that we are always doing what is best for them. Here are just two real life examples:

  • No more packing list! Distributors across Europe started complaining that we were omitting the pallet packing list, costing them additional time to work out what had been delivered. our logistics center confirmed they were being applied as per the procedure…in fact, the new packer in the Dutch warehouse (lots of warehouses in the Netherlands) was 2.10m (6ft 8in) tall (lots of tall people in the Netherlands) and was simply slapping the label on the top of the shrink wrapped pallet where about 1% of the world’s population could see it. A change to the procedure solved the issue.
  • carton1.jpgFinding the colors. I was once told by an angry warehouse manager that they had to open every carton of 8 toner cartridges they received -and they received pallet loads of them every week- each box taken out for the staff to know which color they were to receive in their system.
    • This didn’t seem to make sense until I found that our logistics center was actually re-using old cartons to ship mixed sets of toner.
    • We then found that the cartons had been designed in such a way that once opened, you had absolutely no way of knowing which color was in each box since the markings on the boxes were on the wrong face of the box.
    • Of course, the mixed cartons were never marked as mixed,that would have been far too simple.
    • Finally, we discovered that rather than recommending or enforcing standard quantities (of 8), we were letting our Partners order free multiples. In our western culture, people tend to order metric multiples of 10 or dozens -never multiples of 8. So we always ended up with a mixed carton.

As a result of the strong relationship we built with the logistics teams of our Partners, our Brand became synonymous of ease to do business with. This invariably got back to the senior management of the distributor who would then use their influence to increase their sales of our products. It became a real win-win situation, reducing both our and their cost of doing business.