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Security vendors: Automatic renewals won't hurt channel

Security vendors: Automatic renewals won't hurt channel

Security vendors have moved to reassure channel partners that automatic renewal features in consumer software will not be used in SMB and corporate markets.

Symantec director of channel sales, David Blackman, said while renewals of its Norton consumer products could be made online - with all transactions being made through a firm called Digital River rather than going back through the original reseller - business products renewals were still made through resellers. "We send [users] a letter about 60 days before the expiry date, detailing the part number and the partner they originally bought it through," he said. "If they haven't renewed 30 days beyond the expiry date, we contact the customer again and ask if they want to update through a channel partner."

Sophos managing director, Rob Forsyth, said it took a similar line when an antivirus license was about to expire.

"When the software is expiring we have a process that contacts the initial reseller and customer. In almost all cases, the relationship continues," he said. "If a renewal is made, the reseller gets the same margin as if it was new business." --PB-- If a reseller has gone out of business, or a user expresses a desire not to work with that particular reseller again, Sophos marries the customer to a new partner. One thing the vendor would not do, Forsyth said, was make a business sale direct. itX general manager, Greg Newham, said the distributor handled the renewal process for Trend Micro, ensuring resellers were made aware of when licenses were due to expire.

Axxis Technology director, Mathew Dickerson, said renewals of lower end antivirus software were undoubtedly lost to channel players, but suggested the margins were so low, they weren't worth losing sleep over anyway.

"The off the shelf sales for home users with single PCs don't have the same sort of contact processes as the business software," he said, "The vendors probably don't think it's worth the time and effort to chase and I'd agree. It's very low margin." Dickerson also made the point that some consumers might come back to a reseller anyway, even when given the option to download a new antivirus package online, because of the size of the download.

City Software managing director, Lorenzo Coppa, said there was very little retailers could do to offset renewals of the software it had originally sold going back to the vendor.

The Victorian company has had a long relationship with antivirus vendors, being one of the early champions of VET and working more recently with Symantec, Coppa said. This still hadn't stopped it losing revenue to the growing trend of automatic renewals.

"I do understand the benefits of a customer clicking and renewing online with someone like Symantec," he said. "But at the initial point of sale, I think the channel is still very important and does have a lot influence."

Philosophically, losing margins on automatic renewals was offset, to some degree, by lower marketing costs. "With some of these security products, the vendors do a great job creating brand awareness, so the overall cost for us to sell to the market is lower," Coppa said. "With other products, we have to make a much stronger effort so we need more margin."

One security vendor building channel rewards into renewals of its consumer products is UK-based Bullguard. Local sales manager, James Rhodes, said users received an email from the vendor, in addition to pop-up screen messages, when a product was about to expire. If an online renewal is made, the sale is made to Bullguard, but a percentage goes to the original reseller.


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