Integrators and resellers need to realign their focus this year on profits and not company growth if they are to remain viable, an industry representative claims.
EMC general manager of commercial and channel sales, David Henderson, claimed the recent change in business focus from the larger integration players, such as Kaz and Commander, released about $800 million in customer opportunity for other resellers to pick up.
"But at the same time, with the credit squeeze globally, the question is how to fund that growth," he said. "Distributors are pulling credit out of the channel and getting draconian about credit terms. This has created a dilemma - one month you're a star, the next you're bankrupt because you have been overwhelmed and your cash flow can't take it.
"You better have your head around profitability this year, not growth. We saw growth as a model and rapid acquisitions last year - then we saw people like Commander, and consolidation around ComputerCorp and Leading Solutions that went pear-shaped."
Henderson's comments coincide with the launch of free services training under the storage vendor's Velocity Partner Program. Encouraging services development was aimed at giving resellers access to higher margin revenues, he said.
EMC is also looking to leverage the VMware channel and popularity of virtualization technologies. It is offering partners the chance to double their margin on EMC products sales if they also incorporate a VMware transaction into the deal. EMC acquired VMware in 2004.
"If the partner can demonstrate VMware on an EMC platform, we will automatically provide them with an extra 5 per cent rebate on the hardware," Henderson said.
To further build up communications between both channels, EMC has also appointed a dedicated VMware business manager within its channel team. David Hooper is tasked with devising and managing partner initiatives and communications incorporating both product sets.
Henderson estimated there was about 40 per cent overlap between the EMC and VMware partner communities, but hoped this would lift as more initiatives were launched.
Other new EMC channel initiatives include the launch of a Velocity Advantage Program based around revenue and sales targets for tier-two partners buying through distribution.