It must be quite confusing if you’re employed at a big vendor which has announced its intention to split up the business, like HP or Symantec for example. One day you’re busy extolling the virtues of being big, bragging about scale, breadth, coverage and your wide portfolio of products and services. One day you’re dismissing smaller rivals with relish by questioning their ability to serve multinational and transglobal corporations, talking about how comforted those customers feel in dealing with a large, solid, reliable vendor. And then…
Well, then the CEO announces plans to split the company into two and spin the constituent parts into separate entities and suddenly you need to stop talking about scale and start mouthing words like focused, agile, flatter, easier to do business with, more efficient. All those words your smaller rivals were deploying in their favour against your business the day before have now become part of your vocabulary too.
It’s not only company employees that need to change their vocabulary and arguments. Channel partners also have to adapt. Where once they were only too happy to extol the virtues of a vendor’s size, now they have to start learning a different refrain, one where the split up will enable them to develop a better, deeper, more engaged relationship with the supplier. Suddenly, the removal of layers of complexity that very few people complained about in the past will become a noteworthy benefit of the break up of the vendor. Channel programmes will become more streamlined, more focused, easier to negotiate. Vendors will be more responsive, less inclined to come into conflict with their partners.
Soon, you could be forgiven for wondering why people weren’t coming out of the woodwork to question how they ever put up with dealing with such a large company. How on earth did they manage to make a living out of selling products from such an unwieldy, unresponsive, slow moving behemoth?
Meanwhile, with the split, the vendor will have two companies with two separate channel programmes, two sets of accreditations, two channel strategies, two sets of distribution tiers. Suddenly, the partner will find itself dealing with two different vendors, two different channel account teams, two different distribution tiers and two channel programmes with their own administrative and training overhead. What were we saying about reducing complexity?
On the positive side, they’ll get access to two separate credit lines.
There are sound reasons for splitting up companies, the strongest of which is probably because it makes better sense from a product and technology view to do so because the technologies are not really complementary. But then you do have to wonder how a company ever got into the situation where it was selling two product lines or ranges that didn’t really make sense to try and sell together.
Anyway, people in the channel and within the vendors themselves can choose to view the company break-up scenario as an opportunity or a threat. It’s true that some won’t have a choice at all as the could become surplus to requirements but the rest will need to decide how they can make the best of a situation where big is no longer better and smaller is best.