“Many vendors forget partnerships are two-sided,” Trevitt says. “It’s vital that both parties understand their strengths and agree upon plans to fill gaps, whether they are resource-, process- or product-related.”
The next stage is building the cultural foundations for a transparent relationship, while stage three is selling and recruiting new partners together. “Business partnership is not about outsourcing responsibility; it’s about combining capabilities to drive an accelerated outcome,” Trevitt says. “Finally, stage four is to constantly and collectively ensure stages one, two and three are always current.”
But just as with personal relationships, there can be times when one or both parties outgrow each other or no longer need what the other provides.
Distribution Central chief executive Nick Verykios says there are times when the value-added services his company offers are simply no longer as valuable to the vendor. He says this shift usually occurs as the vendor evolves from its high-growth phase.
“We represent 25 vendors now,” Verykios says. “We have signed up 60 [vendors] in the 12 years. Some don’t make it. Some get acquired and some turn to commodity.”
Verykios says the severing of a relationship between a vendor and distributor should be a relatively painless process, as the terms covering clearing stock and managing credit are usually defined at the relationship’s commencement.
“It’s quite simple,” Verykios says. “You know the rules, they are in the contract – you disengage. And it usually means stock clearances, it usually means paying them, it usually means off-boarding of the relationship. It’s really easy to do.
“The hard bit is to continue to service the customer you have convinced to invest in that technology. That starts six months before. You are honest and upfront and say ‘this is why we are disengaging’. You owe it to your reseller to tell them why you are disengaging and why another distributor might be more suitable.”
But, as Moore points out, that doesn’t necessarily make it any easier for the people who are directly affected.
“When Dicker Data acquired the Express Data group, including Express Online, they didn’t go forward with Apple,” Moore says. “We had a full team of Apple people that didn’t get carried over. But usually these things are broadcast a fairly long way out – you know what’s going on. You’ve got to let it go and accept it and plan it as well as you can.”
When relationships do break down, Moore says it is important for both parties to be professional in the way they handle the break-up.
“The best thing a distributor can do, rather than getting bitter and twisted, which a lot tend to, is accept it, that your objective and the vendor’s objectives aren’t aligning,” Moore says.
“Everyone talks to each other. How you exit, how you on-board, how you function during the time – every stage is critical. The exiting is a very, very important process to manage effectively and positively, for both the vendor and the distributor.
“Burning either party just doesn’t do either side of the equation any good.”
Fact file: When polygamy goes wrong
Vendors usually sign distributors because they help them reach corners of a market they could otherwise never service themselves. Hence it is not uncommon to associate having more distributors with gaining more reach.
But according to John Donovan, former VMware and Symantec channel chief and present regional vice president at ForgeRock, chasing dollars can lead to vendors reaching beyond what the market can bear. “If you increase the level of competition you drive down the resellers’ purchase price – but you also lower the operating margins of the distributors, which means they are less inclined to do stuff for you.
“If you want them to run an enablement program for you, you have to make it profitable for them to do so. If you are operating a pass-through transaction of two points or less, they can’t run an enablement program for you.”
Nonetheless, the tendency for vendors to increase their distributor numbers has been boosted in recent times as cloud and subscription models spur the creation of new types of partners. This, in turn, has fuelled the creation and development of new forms of distribution models, such as that created by Rhipe.
Rhipe chief commercial officer Warren Nolan says his company is connecting vendors with a new set of born-in-the-cloud partners.
“Every vendor wants to know about scale and how to reach as many resellers as you can,” Nolan says. “One of the things we are good at and are able to show vendors is an ability to engage with a reseller, get them to market and activate them for a sale.
“Traditional distribution-educated partners provide support around product, whereas what we have needed to do over the journey is help the partner with business models and go-to-market strategies.”
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