Partners, who comprise the vital link between vendors and customers, have once again revealed their preferences in deciding the fate of IT hardware and software vendors in the country. The third country-wide Channel Satisfaction Survey, 2001 was conducted by the eTechnology Group@IMRB on behalf of Dataquest Channels India (DQCI), a sister publication of Dataquest.

The good news is that channels partners seem to be happy with their key vendors, having rated them at 3.59 on a scale of 1 to 5, where 1 is ‘poor’ and 5 is ‘excellent’. This feedback should warm the hearts of vendors because partners have not blamed them at a time when the market is reeling under the effect of a recession.

Before understanding the satisfaction levels of channel partners with regard to various parameters like product quality, price, warranty, schemes, support, etc, it becomes necessary to find the key vendors that channel partners have chosen to do business with. Key vendors are the ones that topped most channel partners’ lists when asked to select their most preferred vendor.

Systems
According to the survey, HP is the vendor preferred by channel partners in the systems category. The second vendor in this category is Compaq followed by IBM and HCL in the third and fourth positions respectively. Surprisingly, unlike last year, where assembled systems formed a major chunk (with almost 35% in its fold), this year, partners have preferred to do business with brands. Of the 539 respondents, almost 40% deal in HP systems, 31% in Compaq, 11% in IBM, 7% in HCL and 11% in the rest.

Peripherals
In the peripherals category, HP and Samsung turned out to be the most represented brands with 39% and 30% respectively. HP with its printers and Samsung with its monitors managed to keep up this lead.

Epson and Wipro, with only 12 and 9% representation, appear to be losing their recall value among partners. Besides, the entry of a large number of other players, has made it all the more difficult for big vendors to keep up their earlier shares.

Samsung’s entry into the printer market has threatened HP’s hold. Another player who intends to be aggressive in this segment is Canon, but is yet to make a dent in the pie. Possibly by next year, we should see a major change in channel partner preferences.

Networking
In networking products, D-Link has maintained its popularity among the partners for the second consecutive year. However, what is surprising is the entry of the Dax brand in the second position, dethroning Intel from the partners’ shelves. D-Link has maintained its lead with 44% representation and Dax has 19%. Given the fragmented networking products market, there is a host of vendors represented by tiny fractions of channel partners, which clubbed together, form a major chunk of 37 %.

Consumables
Here again, HP takes up the highest representation of 53% because of its large printer market share. Epson is represented by 19%. In this category, the ink re-filling business also plays a major role. While HP and Epson have the largest share in the consumables market, the others form 28%.

Power supply
APC topped the power supply category with 38%, followed by TVSE at 14%. The rest comprises other vendors from the organized as well as the unorganized sectors.

Operating systems
In the case of operating systems and other software, the leader is none other than Microsoft. The second most preferred vendor in the OS category is Linux and in other software category - Oracle.

Last year, Microsoft had lost its position to Tally as the most preferred vendor in packaged software. This is possibly because of the high instance of piracy in Microsoft products. The 2001 survey results corroborate Microsoft’s statements that it has managed to curb piracy to a large extent.

In the OS category, Microsoft has a representation of 69% and Linux 10%. The entry of Linux vendors like Red Hat, Caldera and Suse has improved Linux’s share because of its free availability and also the partners’ willingness to support it.

To maintain a healthy relationship with channels, it is important for vendors to understand the satisfaction levels of their partners. Resellers can choose to support one vendor over the other, depending upon how satisfied and enthusiastic they are about a company’s product, programs, margins, sales growth and potential, service quality and involvement in helping them grow their business.

At the same time, it is crucial to find out the level of importance that partners give to various parameters while measuring satisfaction levels. Giving least importance and being highly satisfied with a particular parameter would not mean much to vendors. But vendors could use this information and divert their efforts from such low importance activities to where it is required.

Similarly, given below is a chart listing the level of importance and satisfaction in descending order. Here, various product categories were clubbed together.

According to the survey, product quality is the most important parameter for the channel in the selection of vendors and products. And the good news for vendors is that channel partners are the most satisfied with product quality giving it a score of 3.94. At the same time, vendors need to strive towards perfection as the level of satisfaction is just about to touch ‘very good’, and is nowhere near the ‘excellent’ level.

While product quality preference remains very much similar to last year’s survey, a small change appears in this year’s results. Unlike last year, where channels had given lower importance to the pricing factor, this year, this particular parameter has come up to the second position. However, the satisfaction level is at the fourth place at 3.56.

Partners have ranked customer preference/demand/pull as the third most important parameter. Though this parameter is not directly dependant on vendors, partners feel it is the vendors who should create the brand value and goodwill in order to spur the demand/pull.

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