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Traditional partner programmes facing challenges

With partners moving to a services led model the consequences for the traditional approaches are profound

There has been a lot of focus on resellers coping with the shift towards the services model and the corresponding pressure on the existing financial models.

The challenges of moving to a new world are not just limited to the customer facing end of the channel and it has caused some issues for vendors as well.

Where the channel teams at manufacturers are having to do the most thinking is around channel partner programmes with it becoming even more of an art to identify and reward value.

In his keynote at the recent Canalys Channel Forum the CEO of the analyst house Steve Brazier directly addressed the changing value and reward models.

"You're moving to services. The vendors are telling you to move to services," he added "But how do you get the rebate? You have to make a revenue target on sales. How do you get to the top level of the programme? You have to achieve certain revenue thresholds otherwise you can't get better prices and additional services," he said.

He added that much more work needed to be done by the vendor community to get a solution to the ever growing problem: "This is a conundrum the industry has not yet solved".

Resellers might be struggling to transform their business and try to keep on the right side of vendor rebate plans but the current market transition has also had reprocussions for vendors.

Iain Stephen,  lead for Data Center and Hybrid Cloud (DCHC) at HPE, said that as some of the top tier partners rebalanced their businesses their revenue mix changed and the vendor had to keep track of a changing relationship.

"Our platinum and gold paertners are somewhere on that journey. They might not sell as much as before that that is a challenge for the vendor," he said.

"Some have dropped from platinum to gold as they are transitioning," he added.

He said that as well as revenue there was an increasing reliance on other measurements.

"There are thresholds and one can be certification. There is a trade-off between specialisation and scale," he said.

Dell is close to revealing the details of its partner programme for the single Dell Technologies company and those involved with putting everything in place before the launch on 1 February also accepted it was a challenge.

Michael Collins, senior vice president, channel business Dell EMC, said that it was trying to "reward some behavour becomes an algortymn that's pretty complex to manage".

It is aming to take the best of the Dell and EMC programmes and roll them into a unified structure that promises simplicity and profitability for partners.

This was last published in October 2016

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