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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.

Take for example of Ahmedabad-based SEPL. The company works with Cisco for switches and routers, a relationship that it entered into during the initial stages of the business. SEPL has been a Cisco reseller for some time. Then Cisco's rival, Juniper, forayed into switching, and SEPL made a strategic call and signed up with Juniper.

Founder and MD, Pratik Patel says SEPL only pitches Juniper to new customers withgreenfieldprojects. With customers that have legacy Cisco infrastructure, it drives Cisco so as not to disturb the client's existing set up. SEPL has also set up a Juniper studio/POC lab, besides being an MSP (for Juniper's cloud ready datacenter) providing the whole range of services from Juniper.

Today, Juniper contributes to about 60 percent of SEPL's top line and bottomline. "We have made a conscious choice to strike a balance between volume and value," says Patel, implicitly referring to is the fact that Cisco is more topline focused company and Juniper is more bottomline focused. But Patel underlines the fact that although the company has "decided to win or lose with Juniper," Cisco will always remain a partner. Incidentally, SEPL is looking at a couple of strategic vendor alliances this fiscal, with whom it is reportedly closing talks.

Get Organized
For channel businesses that are serious about ensuring they have the most productive bunch vendors in their portfolio, it's important to create more formal and process-driven approaches to evaluating their partners.

Larger players like QuantM Technologies have taken baby steps in this direction. As part of its business restructuring plan, the company has set up separate operational teams to manage its portfolio. The key ones, which contribute to 90 percent of QuantM Technologies' OEM-SI relationships, come under a head of sales and a product manager.

QuantM Technologies says its 'formula' to assess its vendor portfolio includes a mix of indicators. These include the health of the relationship, how much a vendor contributes to the business' top line and bottomline, and the number of clients a vendor's technology is used in.

QuantM Technologies' team does a profitability analysis of each vendor's business. The health of the relationship is not necessarily dictated by profitability, but a host of other variables such as interactions, experiences, and the vendor roadmap for the partner. Khurana says these evaluations take place every quarter.

There are others, too, who believe that portfolio assessments should be a part of quarterly business reviews. Jiten Mehta, director of Magnamious Systems, for instance, advocates this. He has managers to oversee Citrix, Microsoft, and IBM, but monitors Dell, a key contributor to the business, himself. "Portfolio management is a matter of strategy, prior experience, and also how much a vendor contributes to us," he says.

 

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