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4 principles for selecting the right principals

Shantheri Mallaya | May 23, 2013
Three years ago,Sudarsan Ranganathan made a decision that some would have called, let's say, far out.

"We don't care for top lines. Profitability is what matters; it's the bottomline that counts," says Ranganathan from Veeras Infotek.

A key, if obvious, aspect of vendor vision that partners should evaluate is a vendor's technology. Take the example of Mumbai-based Wysetek Technologies which entered into a tie-up with VMTurbo, a virtualization management company.

The company's technology, says Rajesh Mathkar, director of Wysetek Technologies, was solid. But unfortunately that wasn't enough. "The solution was good and we tried to get something going. But eventually we figured out that the market just wasn't ready for VMTurbo," he says.

Mathkar appreciates the way IBM works its relationships. Wysetek Technologies, he says, makes 60 percent of its revenues from IBM and that business is managed by an IBM specialist. Wysetek Technologies, which also has key relationships with EMC, VMware, and Citrix (they contribute 40 percent to its revenues), assess its vendor portfolio often. "Commitment from both parties is a key factor," says Mathkar. "There is no room for casual flirting."

Never Kill Relationships
Any partner undergoing the process of vendor portfolio management must, at some point, ask the question: What do you do with vendor alliances that don't make the cut? Do you kill them?

You don't, say the majority of partners we spoke to, unless the situation demands a formal sign-off, but that's an extreme step. Most vendor relationships that don't square well with a partner's business needs are allowed to remain on its portfolio, and even show up on a partner's website. Often, say partners, these relationships are left to languish and die a natural death.

There are times, though, when a partner has to pull the trigger. Leon Computers has such a moment in 2007. "Some bitter run-ins with vendors such as HP made us rethink where we were headed," says Rahul Meher, CEO of the Pune-based solution provider.

HP's constant pressure on margins made day-to day life difficult for Leon Computers, says Meher. In the end, Meher made a decisive call and officially ended the relationship. Today,Leoncarefully handpicks its alliances. EMC, Commvault, IBM, and VMware contribute to about 60 percent or more of its revenues as well as its profitability. The company has about 10 key relationships. Meher says that he plans to limit the number of new relationships, but is looking at solutions and services as a driving force, a strategy that's helped it crack some significant multinational accounts.

There are times when the non-confrontational strategy suggested by partners can get tricky--especially if one of your less-active vendor alliances gets in the way of a more profitable one. But managing competitive and conflicting vendor relationships is a tightrope walk channel partners are not averse to taking if it makes business sense.

 

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