The problem of 'ownership' is common within a partnership. For some firms, it can blow the relationship apart

Partnership programme is a term that comes up again and again in the channel and one that has become so common it has almost lost all real meaning.

Every dealer and VAR which resells products, licences or services on behalf of a vendor is usually classified as a partner, but exactly how sharply delineated is that relationship and to what extent can a reseller 'partner' really be at ease with its role and fully trust the intentions of the vendor it is working with?

On the surface, the partnership between vendor and reseller seems to work both ways: the individual groups unite to form a convenient and proven sales channel for the benefit of users and customers. Both groups work together for the good of the customer, who is always placed centre-stage in terms of importance. But it is this relationship with the customer which is so often problematic - who 'owns' the customer, the vendor or the reseller, and how is that ownership policed and maintained?

Partners or rivals?
One company which has found itself on the sharp end of such a debate is Berkshire-based reseller LANkind, which is currently involved in a spat with Novell over ownership of a lucrative network installation, design and services contract with TV group Carlton.

The details of the dispute, with both sides claiming ownership of Carlton, reveal not only the problems inherent in the vendor/reseller relationship, but also those facing any company which chooses to go to market with a hybrid direct and indirect sales model.

From LANkind's perspective - a reseller which has worked with Novell for a number of years and holds the top level business expert certification - Carlton was a customer it lost to Novell.

LANkind claims it was initially engaged by Carlton last year to help merge its network with that of its newly acquired HTV business. The reseller says it installed NetWare 5.1 and used software developed by its sister company LANboss to carry out the network audits. It claims it completed the work with time to spare and saved Carlton money by doing so.

But when LANkind decided to issue a case study outlining the work it had done for Carlton, it received an e-mail from Novell claiming Carlton had been the vendor's customer all along.

LANkind managing director, Dawn Berends, tells MicroScope: "We reduced the project time for Carlton from 80 days to 20 by using our own software - how Novell can claim this contract as its own is beyond me."

She claims the situation with Carlton - LANkind no longer works with the company - has left her deeply suspicious of Novell's channel strategy and motives. "We've always been a business expert, but what does that mean? Novell has now started asking business expert partners for lists of users and I'm not happy to provide it with that information because I'm worried about it muscling in," she says.

Berends adds Novell appears to be moving to a model which is more dependent on services revenues - something which also causes her concern and which she believes raises a number of fundamental issues about the group's sales model. "Novell started a big consultancy push, which would be okay if the [sales model] was clear. But it is unclear and appears to be ever changing," she says.

Kicking up a fuss
From Novell's side of the fence, LANkind is just creating a storm in a teacup and complaining about ownership of an account which it didn't have a claim to.

The vendor's UK sales director, Ben Bulpett, defends Novell's position over the disputed account, pointing out it has written to every one of its business expert partners, naming the 105 companies it deals with on a direct basis - Carlton's name is on the list.

"Carlton is an enterprise account managed by us. We provide the services and the licensing is handled by a third party - in this case Dell," he says. "LANkind was aware of the enterprise account list we circulated to partners and we have been very open about the rules of engagement."

More tellingly, however, Bulpett believes the spat with LANkind illustrates an important point: "No one owns an account - the customer chooses to buy from whoever it wants to. All we are saying is that if a partner wants to pursue services business, it must be aware that Novell will also be involved in those accounts and we will be very clear how we engage with those customers."

'Clear' may be the operative word in this case, considering Novell's launch of its 'clear channel policy' at the end of last year. The vendor promised to clearly identify customers and partners "with whom it will work closely to maximise the value of Novell solutions". It also claimed it would work with its partners in a measurable 'sell with' relationship by providing top level sales partners with leads, technical support and assigned account managers.

Where others fear to tread
The changes to Novell's channel policy - coming as they did on the back of the company's management admitting mistakes with previous sales strategies - may have alarmed more partners than just Dawn Berends and LANkind.

One Novell channel insider tells MicroScope that recent UK gatherings of business experts have given partners a chance to air a number of complaints over the way the software vendor has been running its channel.

LANkind may have been happy to go public with details of its problems with Novell, but many other partners, keen to maintain a good surface relationship with the vendor, may have kept quiet for fear of reprisal.

While the debate between Novell and LANkind is likely to rage on, the incident illustrates the uneasy nature of relationships between vendor and reseller when both are seeking to maximise services revenues in the face of ever declining product margins.

Of course, the sales relationship has to be called a partnership, but how many resellers and vendors can really claim they are truly working together?

Novell's story
Following our news story about the LANkind and Novell dispute (see MicroScope, 28 May), Novell's director for strategic alliances and channel sales, Patrick O' Connor, sent an e-mail to business partners attempting to reassure them of the company's good channel intentions.

"Novell issued a press release with Carlton TV earlier this month on its implementation of Novell GroupWise 6, ZENworks for Desktops 3.2 and NetWare 5.1. Unfortunately, LANkind believes we are trying to take this account away from it. I must clarify that at no point did the customer mention LANkind as a preferred partner, neither did LANkind notify Novell that this was [its] customer when it received the Enterprise list of accounts. I feel it is also necessary to mention that the GroupWise 6 and ZENworks for Desktops 3.2 implementations were handled by Carlton TV internally.

"Since the introduction of the 'sell with model', I'm sure you will all agree that Novell has demonstrated 100 per cent commitment to its partners as part of the 'clear channel strategy'. LANkind has, on many occasions, been invited to join Novell in the PartnerNet 2002 programme, however it has declined these offers."

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This was first published in June 2002

 

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