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If OEMs are the cells of the IT industry that build it, channels are the blood of the industry that keeps the cells motile. Channel partners are the ones who at the end of the day, run the show, and man the market. They act as the medium that bridges the gap between the principal companies and end-users, and help the manufacturers reach out to their audience.

Having said that, it is but obvious that every principal company has to nourish and nurture the channel partners with utmost care and diligence. There is no doubt that the HPs, the Intels and the Samsungsvendors who want to maintain their market lead, have to retain a good and a healthy channel strategy. They try to maintan a strategy that is transparent, mutually beneficial, and offers enough space for both the OEMs and their partners to grow and earn good profits. Especially in a market like India, which is big and versatile, channel partners play a crucial role that is tough to ignore.

A classic example is that of PC major Dell, which deviated from its age-old policy of direct sale of its products, and instead opted for the channel model. The once out-of-reach brand, today has become a household name in India. Essaying a new story, Dell has overshadowed many of its competitors, in terms of growing popularity.

How Distribution Evolved
In spite of all the sayings, it is sometime the principal company which tries to dominate the channel, and ignore its partners call for proper support and prompt actions in times of emergencies. Many a time, the partners have cried foul against vendor channel strategies, claiming them to be volatile and complex.

Understanding the need for change, most leading principal companies have, over the years, remodelled and restructured their channel strategies. This helps in laying the path for a more cohesive, transparent and effective channel strategy.

With as the Indian IT market witnessing a more stable and mature growth the principal companies have not only expanded their channel network to tap the new potential markets and customer segments, but have also floated innovative schemes. We are looking at various ways to help channel partners become more profitable. For example, our Managed Service Provider Initiative takes advantage of Intel vPro technology. The MSP initiative is a complete package for channel partners. The session includes technical training, marketing and sales skills, says Sandeep Aurora, director, sales and marketing group, South Asia, Intel. The leading chip maker is also helping its partners to tap the next billion potential PC users by enabling them to assemble Intel Atom based nettops and netbooks.

Microsoft, on the other hand, has reached out to the partner community by expanding its direct presence in India by adding sixteen offices. Over the last two years, we have been focused to serve and collaborate with our partners more effectively. This direct presence helps our partners reach out expeditiously to us, and then service their customers better. Going forward, we shall be constantly working toward making this engagement with our partners even more extensive and shall be reaching out to them by reaching other cities, explains Rajeev Mittal, group director, small and medium enterprise, Microsoft India.

All across its product verticals, HP is a very strong channel driven company. Over the last few years, the company has tried to focus on some fundamental structural changes in its channel strategies We have tried to create a strategy with a lot more predictability and stability that will compliment across all business models. The focus has been to introduce a lot more processed, and systematic framework to support the channel partners that will ultimately enable them to run all the business models more consistently. A lot of investment has gone behind to make the structure more process driven, says Sameer Mathur, head, partner advisory board, HP. Various programs have been introduced by HP to increase partner visibility, ensure their success through meeting targets and increase margins.

We are keen that our partners engage in a meaningful relationship with each other, and benefit from their specific skills Rajeev Mittal, group director, small & medium enterprise, Microsoft India	Even as we have expanded our channel presence, we have maintained transparency and have clear guidelines for them Ranjit Yadav, director, IT, Samsung

One company that has been focusing more on its channel activities now than ever before is Cisco. Ciscos complete business is through channel partners. Its of paramount importance to ensure that our partners accelerate growth, differentiate their business, and increase profitability using Cisco certifications, specializations and incentives. This helps partners to define skill sets required to successfully deploy and operate Cisco solutions, optimize the technology performance and to deduce deployment risk, says Bejoy Antony, vice president, channels, Cisco India and SAARC. Cisco has launched Select Certification program and SMB specialization for its channel partners. Select certified partners benefit from an increased level of support from Cisco, including access to best-in-class products and services, technical support, productivity tools, online training, and marketing resources.

Whats in the Gunny?
Being predominantly a channel driven company, almost 90% of HPs business is done through channels. Acknowledging the symbiotic relationship that a principal company shares with its channel, HP admits that once the channel is affected in its business, the reflection of the beating will automatically fall on the principal and vice versa. Therefore, the company believes in working in a more collaborative, dynamic and flexible approach with its channel. Transparency between the two is essential as it prevents any miscommunication as well as paves the way for a healthy growth path for both parties.

Over the past three years, even as we have expanded our channel presence in the country, we have kept the core principles of maintaining transparency with the channel and having clear guidelines for them, says Ranjit Yadav, director, IT, Samsung. We have always supported the channel through new product and technology introductions and tried to ensure channel profitability through better inventory management. Over time, we have worked on improving our systems of educating our channel and helping them sell better, he adds.

Cisco has invested resources in sales as well as channels to enhance support for its channel partners across the country.

Over 96% of the business at Microsoft is facilitated by its partners, and this makes them an intrinsic part of Microsoft. We engage with our partners through the Microsoft Partner Program (MSPP). Partners have seen tremendous value in the partnership benefits that can be availed through the program and pro-actively continue to re-enroll each year. Our strategy has been altered to continue to deliver our promises to our channel partners in a fair and transparent manner, says Mittal.

Human resource management is a critical challenge for the channel community. And to help alleviate that Microsoft offers partners an online training portal, the Partner Learning Center. This is designed exclusively for the members of the MSPP, and it allows partners to choose from a wide variety of online training, self-study resources, and more. Microsoft has also initiated a special Partners Resource Center that contains all the information on the Microsofts Value of Original Campaign. It enables partners to enhance their understanding of the campaign and to leverage these to deliver the value of original software to their customers.

Our complete business is through channel partners, so its of paramount importance that they grow Bejoy Antony, vice president, channels, Cisco India & SAARC	Through our initiatives we are up-leveling our partners from box-resellers to solution providers Sandeep Aurora, director, sales & marketing group, South Asia, Intel

Microsoft has also recently launched a new partner initiative aimed at the SI segment. Service Advantage, as the program is called, is an initiative for partner organizations which provide the design and implementation of an end-to-end solution. The solution includes services such as monitoring, future upgrades and maintenance to their SME customers. Following its extensive engagement with the SMB community, Microsoft understands that small businesses could have very unique requirements. And to deal with them better, we set up a Small Business Specialist Community (SBSC), which engages with the small businesses across and helps them become IT enabled. We have a total of over 400 partners who are members of SBSC, he adds. Recently, the IT giant has also announced the addition of a sub distribution layer to its distribution model.

Intel has been continuously investing in India through local reseller channel programs, eco-system development and TTM technology distribution. Additionally, hinterland expansion is now an important part of what it does. We have scaled operations in various tier-2 and -3 cities through a series of initiatives like enhancing Intels sales, marketing and service support to the channel community. This in turn will help reach out to the end customers, says Aurora.

The Dell Saga
Although just one year into the channel business, Dell has successfully won partner confidence. Aggressive pricing, attractive channel schemes, brand distribution network, backed with good support has been the key highlights of Dells success so far. Interestingly, Dell tapped a market where there was no presence of the commercial products for the company. Hence, any extra unit sold gave it market share gains. Partners helped the company establish the brand in the channel. Even in the slow market, channel sales helped build its growth, and contributed significantly to the overall share of Dells business.

We have started one year back, and the result has been very encouraging both in terms of the width (number of partners) and depth (market share) of distribution. We have signed more than 350 registered partners for this initiative, says Sandeep Sharan, channel sales director, SMB, Dell India.

United We Stand
Though businesses have been hit hard globally due to the ongoing recession, and being into the bottom of the ladder, it is the partners who have been hit first. And the principals were quite proactive to protect their channel overcome the situation.

It is during such tough times when the association is tested more. The partners expect more supportive measures from HP to help them sustain such lows and emerge as winners. HP on the other hand works more collaboratively to ensure that their sales targets are met and the margins are not affected, says Mathur. In the process HP has realigned the targets, keeping in mind the current market condition. This is the most important component of partner profitability. In case the target is high in such market condition, technically, the partner ends up losing money, or over-stocking goods. We have softened their targets and helped them in achieving them, informs Mathur.

Further, HP has undertaken a serious step in inventory correction by redirecting the stocks, starting from the top distribution level to the bottom level of the partner pyramid. This has been done to ensure that the partners dont get stuck with their money, and they have enough working capital to sustain their current business, he adds. HP also keeps in constant touch with its partners seeking their feedback on business performance, identifying new customer segments that can earn more business. The partners also provide them with tips to keep their businesses afloat and take timely and precautionary measures.

Inspite of the slowdown, Intel didnt hesitate to launch new technologies in the market that provided its partners the required edge. The Intel Atom processors based netbooks and nettops has spurred channel innovation as well as helped its partners to take advantage of a whole new market of potential users.

Dell has not made any major changes in its channel strategies. Its focus has remained to make the channel partner more profitable and avoid over-distribution of the product. The strategy has proved to be recession proof for both Dell and its partners.

Samsung, on the other hand, has focused on enabling its channel partners to sell products and build end user demand. We are focusing on creating end user demand by launching new products in categories like notebooks, LCD monitors, etc. Also, we are focusing on better inventory management so that their money has faster rotation and their profitability is ensured, says Yadav.

Taking the leadership position in the industry, Cisco introduced Navigate to Acceleratea holistic, global framework for the channel team. The framework provides them with the tools, resources, and information they need, in order to become trusted business advisors to our partners, informs Antony. This pioneering initiative also introduces our partners to the strategies that they need to adopt to navigate in todays challenging and dynamic economic environment, he says.

Channel partners have been quite appreciative of the new channel strategies. However, these measures are not foolproof. But the channel partners are not being too demanding, even though they expect far more comprehensive channel policies from their majors. The onus now is on the principal companies. And it remains to be seen how far they will continue doing the good job and keep on evolving with their channel policies.

Piyali Guha
piyalig@cybermedia.co.in

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