Vendors buffer network channel

Over the course of the decade we've watched networking go from an adjunct to IT to one of its keystones, around which a huge amount of industry innovation is occurring.

Over the course of the decade we've watched networking go from an adjunct to IT to one of its keystones, around which a huge amount of industry innovation is occurring.

In the past two years, the pace of convergence has ramped up to a dizzying speed with vendors from the networking, hardware and security spaces crossing over into each others' territories; witness last month's deal between Brocade and Foundry Networks, or HP's massive investment in its ProCurve wing.

Equally, the networking industry has seen its fair share of the recent economic troubles too. In recent weeks Alcatel-Lucent has been replaced by Nortel as the industry's whipping boy and there are already suggestions that the Canadian communications vendor will find it hard to get through to 2010.

Mitel UK sales director Enda Kenneally believes one of the most important things networking vendors can do for their resellers is to keep them reassured.

"Resellers need some comfort that their significant partners will still be around," she says.

"There are concerns and there have already been some shocks, so it's up to us to demonstrate consistency and clarity of strategy."

Cisco UK channel head Bernadette Wightman, who formerly headed up Cisco's SMB Select programme in the UK, makes much of the need to support resellers during the coming months, and has made no secret of the fact that she is on a crusade to make the vendor easier to do business with. Of course, that is a mantra most vendors repeat to their channels, but this year it is going to become much more relevant.

Speaking to MicroScope last month, Wightman said: "It's important that [Cisco's] channel partners are working to add real value to their customers' businesses, so I have to try and understand their businesses before I take the most relevant and best bits of Cisco to them.

"End-users will want optimisation and productivity [in 2009] and the channel partner has to demonstrate they can provide that.

"The biggest issue for all our partners is cash and liquidity," Wightman continues. "We're working on bringing new financing packages to market. We've 0% financing packages out now, and we're reducing some pricing through distribution."

Wightman is backed up by Cisco small business manager Gordon Mackintosh, who says 2009 will see more emphasis than ever before placed on training, saying that this year dealers will need to become more tech-savvy.

"They need to understand more about the technology and products and generally try and soak up as much as possible. I see it as a fantastic opportunity to unlock new markets in the current economic climate," says Mackintosh.

On a global basis, Cisco has also begun taking steps to address potential issues within its supply chain, seeking out areas where it may see disruption and taking steps to ensure its channel continues to receive an uninterrupted flow of product as and when it is needed.

Mitel is pursuing a similar strategy, according to Kenneally. Over the summer it launched a finance programme which has since proved "absolutely invaluable" and is set to be revamped and improved in the near future. Mitel is also concentrating on educational roadshows and seminars and is running migration programmes for partners concerned about the future of other vendors.

Pricing deals will be the name of the game in voice and mobility, too, with many communications providers expected to offer tempting deals to resellers during 2009. Gamma Telecom, for example, recently launched wholesale mobile rates of 3p per minute for channel partners selling its mobile services package.

Marketing director Richard Bligh is upbeat about the communications channel's prospects in the next year.

"This sort of thing can be good for a channel. Often sales guys are better at a price pitch," he said. "Our bigger partners I can see doing really well this year."

Video, touted as a potential lifesaver during the recession, owing to its proven cost-cutting benefits, will come to the fore during 2009, hopes Polycom UK vice-president Paul Louden. In fact, it is one area where vendors are still letting the product talk for itself.

"In terms of support for the channel, we are revising our business partner programme to give more support to resellers, and enhance value for them. But video is now a killer app and I will always refer the channel to the fantastic return on investment, which you can measure in weeks and months," Louden says.

However, Kenneally takes the view that resellers must do more to help themselves through the recession.

"They have to take more care of their customers, and I'm surprised at the number of our channel partners who are only now realising this," she says.

"The other thing is to work as hard, if not harder, on prospect generation. Even if nobody bites you'll still be able to build up a contact community who will stand you in good stead when people start buying again."

Before Christmas some indications that the initial shock of last autumn's financial crisis was passing began to emerge, and although it is too soon after the sluggish return to work of early January to be certain, the idea is gaining traction.

"I'm getting the impression that people are becoming more pragmatic," says Kenneally. "Communications is definitely business critical, there's no getting away from this; it must be maintained and it must have the right people communicating its benefits."

Louden agrees: "When companies go through difficult times communications become vital, particularly in dispersed enterprises."

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