Channel Partners Conference & Expo is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Who joined us in Vegas this March? And what did they think? Access the post-show report >>

Vendor-Partner Channel Conflict Comes to a Head

While vendors and partners have many common objectives, their approaches have a history of conflict. Tensions have intensified, and some believe it is time to push back.

Dave Dyson believes it has gotten to the point where he is willing to sever relationships when partners have crossed the line. Dyson, CEO and chief strategist of Eclipse Telecom, a consulting firm that helps enterprise CIOs create network strategies and negotiate contracts, wants to put these issues on the table.

The notion of finding common ground was the impetus for a panel discussion Dyson will moderate on March 3 at Channel Partners Virtual. The session, “An Honest Conversation About How Channel Partners and Vendors Need to Work Together to Win,” will include panelists Amber Bardon, CEO of Parasol Alliance; Heather Harlos, global marketing manager for Bitdefender’s cloud and MSP business; and Datto SVP of business development Rob Rae.

Changes in technology and the way customers choose and procure technology have made selling more challenging, Dyson told Channel Partners. Dyson believes those changes have increased those pressures in recent years. COVID-19 has also exacerbated it, according to Dyson.

Lack of Respect

Dyson has experienced the conflicting priorities of vendors, particularly the largest ones. Many vendor salespeople lack respect for the relationships companies like Eclipse have with customers. Dyson is seeing more occurrences of salespeople crossing the line.

Eclipse Telecom's Dave Dyson“Everybody knows that selling has changed dramatically and buying behavior has changed dramatically,” Dyson said. “That was happening before the pandemic. Couple that with the traditional channel models of companies like mine, or VAR integrators, who are very relationship-oriented, very trusted-adviser-centric, where the customer relationship is the currency — the coin of the realm, so to speak.”

“When salespeople with these billion-dollar technology providers are not having any success getting into big customers, they call me and say: ‘Dave, will you walk me into billion-dollar company X, Y or Z?’” he explained.

Dyson appreciates the fact that there is a flip side to that conflict and some partners can also go too far.

“On the other side of the coin, those same providers have become sick and tired of the channel partners with their hand out, saying: ‘I'm going to introduce you to a client, and you can pay me for the rest of my life, thank you very much,’” he said. “So, there is this weird friction going on right now. We're working on relationships with customers, while they're starting to get fed up with paying for the introduction.”

Dyson does not claim to have a precise answer to the problem. But he is particularly frustrated when large vendors, which spend millions of dollars on marketing and advertising – and many times that amount on sales efforts – put unrealistic demands on smaller partners that do not have those resources.

“Why is a company that's publicly traded, worth billions of dollars, asking me for favors?” he asked. “My response is that we can work together. But we have to decide what the value is relative to each side of the equation.”

Where Is the Value?

Over the years, Eclipse has worked with hundreds of IT and communications vendors, according to Dyson. He emphasized that it is relatively easy for a partner to get onto a vendor’s list.

“You just have to be competent at what you do,” he says. “And we have to be able to look at them and say, ‘Yeah, those guys can solve that problem for our customers.’ But to be a true partner, you have to be thinking about how to help me grow my business. If you are with a multibillion-dollar organization with our name on a sports stadium, and you're going to ask a favor from Eclipse, you should come bringing equal or larger favors that help me and my business.”

Dyson elaborated on how vendors can reciprocate.

“Besides selling product, what I really need is more customers,” he says. “Like many small businesses, I don't have brand awareness that many in this space might have, such as RingCentral, AT&T, Verizon, Fortinet – you name your provider – we don't have that awareness from customers. So, help us by introducing us to some of your longstanding relationships.”

The Quota Factor

Yet, vendors’ sales reps who have quotas have more pressing priorities, Dyson noted.

“Those two things are fundamentally at odds with one another,” Dyson said. “I don't know where the middle ground is. It's one of the reasons I advocated for starting to have this conversation out in the open."

Datto’s Rae believes part of the problem may be the accelerating shift from companies purchasing hardware and software as capital expenditure to the as-a-service model where IT has become an operating expense.

Datto's Rob Rae“In our space, the relationship as changed,” Rae said. “Specifically, with more managed services, recurring revenue and delivering services, it's less about the vendors and more about the service that's being provided to the SMB and the ultimate end user.”

And with that transition, there is a level of distrust, Rae added.

“It goes along the lines of, you dated this girl, she cheated on you, you broke up with her, and now she wants to get back together with you,” he said. “And always, in the back of your mind is like, is that going to happen again? So, there's always this level of distrust.”

Opportunities for Improvement

Despite these issues, Dyson looks to a future that is much more collaborative with companies helping one another, and he believes that is possible.

“Valhalla to me is where it's not such a nakedly transactional thing,” he said. “If you're calling me and saying, ‘Hey Dave, I've got these widgets I have to sell, can you introduce me to 10 of your clients?’ Everybody needs to stop doing that.”

Can that happen?

“It requires time, energy and patience, and nobody has any of those things,” Dyson said. “If we’re going to build thoughtful partnerships together, that may take time to really cement and take off. And everyone’s got to be willing to commit that energy to it. And I don’t see the will for that, frankly.”

Is Convergence the Problem?

Some view the notion of channel partners wading into products and services traditionally associated with telecommunications vendors' direct sales teams as playing into that conflict. But there has been considerable, and often heated debate, to what extent convergence will become pervasive in the channel.

Rae has made his opinions quite clear as to whether partners should embrace convergence. During a debate at the last live Channel Partners Conference & Expo in Washington, D.C., before the pandemic, Andrew Pryfogle, Pax8‘s chief market development officer, said: “The lines are blurring between labels, with MSPs playing more of an agent role, and agents playing more of an MSP role. The convergence is happening and accelerating.”

Rae retorted, saying convergence is “like teaching a cat to walk on its hind legs — it’s not going to happen.”

Dyson was there and he has not forgotten that session.

“That was a humdinger — Rob and Andrew, up there trading blows,” Dyson recalls.

Rae’s views about convergence have not changed.

“I've come to dislike the word,” Rae said. “I gave a Channel Partners Virtual presentation where I talked about this change from siloed selling, where you had your telecom guys, your PBX guys, and then you had your router and your server guys and your security folks, who all had their little silos. And we played nicely together because nobody was able to get into anybody else's area of expertise.”

But in recent years, he said those silo walls have started coming down, which has created more of an open field for everybody. For instance, Rae pointed to the fact that Datto now sells security products.

“We didn't used to do security, but we are getting some pretty substantial security wins on the board right now because we can get to those vendors,” Rae said. “The scarier part is vendors who used to do just one thing can now come and they can sell the networks or the phone stuff. So the playing field is wide open.”

channel conflict, Datto, Eclipse Telecom, Channel Partners Virtual, channel convergence