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Channel tensions rising

Competition and strained vendor relationships highlighted as concerns at Canalys Channel Forum

Resellers are facing several sources of tension that pose challenges with emerging competitors and strained relationships with vendors at the top of the worry pile.

Using his keynote slot at the Canalys Channels Forum in Barcelona the analyst firm’s president and CEO Steve Brazier warned that the channel was facing increasing competition from Amazon and professional service providers.

He said that there was more overlap between the channel and likes of Atos and Cap Gemini and the battleground was in the managed services space.

“When we look at the large enterprise space we are discovering there is more and more crossover between the channel partners and the professional services companies, the likes of Deloitte, Accenture and Atos and the overlap is getting bigger,” he said.

“What is driving this trend? It is the move towards managed services. Managed services build deeper relationships than just buy and sell. They build stickier and normally longer term relationships and the professional services companies want that business,” he added.

Another looming competitor was Amazon Business with Brazier predicting that within 18 months the firm would have doubled its presence in Europe to operate in 10 countries.

“They are a threat to you, there’s no question. Be very careful,” he added that resellers should also not sell via the retailer because that would just be strengthening the competition.

Dion Weisler, CEO of HP, also shared a warning about Amazon Business and urged partners to make sure they could deliver value that the retailer struggled to match.

“Amazon Business is a force to be reckoned with in the US,” he added “They will come to Europe and they will be aggressive.”

“Many of our partners are going to have to look to have that much more intimate relationship with the customer. That’s something [Amazon Business] can’t do,” he said.

A final area of tension highlighted by Brazier was the state of the relationship between vendors and partners.

The pressure on vendors to grow the business meant that they were cranking up the pressure on partners and were demanding more loyalty from resellers.

With one of the key features of the Canalys channel event being the chance for partners to meet vendors, Brazier said he expected the tone of those conversations to be different at this year’s event.

“We are expecting to see a few more arguments between resellers and vendors and there is tension. It’s no so collegiate anymore,” he said.

“The vendors have been struggling for growth, many of them, and they are going to push you to deliver more growth,” he told resellers.

 

 

This was last published in October 2018

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