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A new channel has emerged, but are you in it?

James Henderson | June 13, 2017
Non-traditional vendors and partners have established a beachhead in the market, threatening the status quo of the ecosystem.

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Deal making is a delicate art, a craft that when executed well, can transform a humdrum company into a dominant business empire.

Jean Paul Getty was a perpetual deal maker, one of the leading negotiators of the 20th century.

Ranked as the richest living American in 1957, the industrialist and oil magnate was frugal by nature, and famously even negotiated his grandson's ransom.

But Getty followed the advice of his father in business, taking a long- term view of selling.

"My father said: "You must never try to make all the money that's in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won't have many deals."

Yet despite Getty's deal making words of wisdom, history shows that not all executive leaders have seen value in sharing the spoils.

PR driven displays of unity aside, a select brand of boardroom executives have forever labelled the channel as "the ugly stepchild of the industry."

"You'll find thousands of books about sales methods, but only very few talk about the channel," wrote Stefan Utzinger, author of Channel Revolution.

"Therefore, it's hardly surprising that there are still many senior managers in organisations who think that their company can grow without building a reliable channel."

In penning Direct from Dell - billed as a self-help guide for any aspiring business leader - Michael Dell quite literally wrote the book on going against the channel.

"These executives are reluctant to give margins to the channel or support their channel partners, since that would mean sharing the wealth created," Utzinger observed.

"Whenever possible, they'll push their sales teams to deal directly and compete with their own channel partners."

Yet as alluded to by Utzinger, these executives continue to fail to understand that there isn't a single major IT vendor left standing that sells products without using a network of reseller partners.

"Even companies like Dell, who for many years were very successful without using the channel, were forced to change their strategy drastically and started building a channel," Utzinger said.

"It became imperative for Dell to make this dramatic change after losing market leadership to competitors with strong channels."

For Utzinger, an important lesson for vendors to consider is that it's not the best product that wins, but in the long run, it's the company with the best channel that comes out ahead.

IBM may have coined the phrase "all that counts is the feet on the street", but who said it had to be your own feet?

"Microsoft has the single most powerful and most effective sales force in the world - a deadly army of channel partners," wrote Alex Schultze, author of Channel Excellence.

 

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