Inspecting the boundaries

Inspecting the boundaries

Vendors could look at large channel accounts if we head into a recession

You can't please all of the people all of the time, which can sometimes make corporate communications a minefield. Just ask Symantec's chief operating officer, Enrique Salem, who stirred up a hornet's nest when he told a roomful of Wall Street analysts about plans to take hundreds of large accounts direct and automate SMB subscription renewals.

Plans to drive greater efficiency and reduce overall cost structure would have been music to the ears of Wall Street and the company's shareholders. But the message received a less favourable welcome when relayed to the software company's huge channel community as a threat to their business.

There are a few things that probably need to be said in defence of Symantec here. For starters, it has been one of the more channel-friendly vendors over the years. With regard to the automation of SMB renewals, Salem spoke about automating the process to improve efficiency and, more importantly, increase renewal rates. Stories written in the US have suggested it will eat channel business but those automation notices include the contact details of the partner that originally sold the software, according to Symantec's global channel chief.

While Symantec's competitors will undoubtedly be revelling in the negative coverage Salem's comments have attracted, I'm sure they privately share its frustration at renewal rates. If there wasn't major room for improvement, distributors like Express Data and Ingram Micro wouldn't have built systems to track renewal opportunities on behalf of their resellers.

As for the large accounts that Salem spoke about servicing directly, the reality is that some large companies insist on dealing directly with the vendor and most channel partners don't care as long as the accounts that are being ringfenced are clearly marked.

However, I suspect it's far from coincidental that Symantec unveiled plans for an 'efficiency drive' to the financial community at a time when the economic outlook is increasingly bleak. When times get tough, and it's been a long while since they really were, it doesn't take long for people to start chewing their pencils and looking for ways to cut costs.

If we are headed into global economic recession you can bet that Symantec won't be the only company with executives sitting in the boardroom looking for ways to improve efficiency. For some, pulling a greater number of accounts out of the channel and into the direct sales organisation could also be on the agenda.

How many companies have that conversation, and the number of accounts that are offered 'simplified purchasing arrangements', will depend on the length and depth of the economic downturn. But vendors should be warned that it takes a long time to build trust within the channel community, and that trust can be threatened very easily. Anybody who doubts that should ask Enrique Salem.

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