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6 threats for enterprise channels in 2013

Channelworld India staff | May 2, 2013
A weak economy is combining with a number of long-dormant issues to form a set of challenges partners needs to watch out for.

To make matters worse, some of Shell's existing customers--who were once comfortable working with tier-2 SIs--now want a taste of working with bigger brands. "When somebody comes in three-piece suit and talks big, the customer is naturally impressed and sees great value for his money. That's exactly what the tier-1 players are doing," says Srinath.

Tier-1 SIs also have no qualms leveraging their relationships with vendors to enforce their strategy of using deep discounts to grab deals away from smaller players. "Tier-1 players have a better control over their OEMs and have a better understanding of the price points at which they can seal a deal," says Mital, who says he's been facing competition from tier-1 players for sometime in the Lucknow market.

On the bright side, at least for tier-2 players, Srinath says he's come across a number of customers who have come to regret their decision of moving to a tier-1 partner. "No one takes accountability in account; their sales guys talk big and bag a deal. But the work they do is pretty unimpressive, that's what we have come to understand," he says.

In the meanwhile, many partners have begun circling their wagons around their customers. More often than not, holding on to a customer requires a serious dialogue, they say. If they can prove that they are as good--or better--than a tier-1 player when it comes to deployment and service delivery, customers will stay loyal.

Take the example of Shell Networks. The company realized that many tier-1 players in markets like Bangalore and Hyderabad were walking away with deals because they made a lot of promises and they marketed themselves well. "We realized we needed to position ourselves in the market and showcase our capabilities. We hired a highly-experienced person who used to work for one of our principals and he started talking to our key customers. We have started seeing a huge difference already. We are now able to develop our own brand equity in the market," says Srinath.

The Long Sales Cycle

The Threat: A sluggish economy, a weak capital market, and a partner's inconsistent ability to pitch the right solutions to the right person result in longer sales cycles and poorer cash flow.

In 2011, Adit Microsys, a solution provider based in Ahmedabad, initiated a deal to sell a storage solution to one of its enterprise clients. To managing director Brien Shah, it was a straight-forward project and he saw no reason why it couldn't be wrapped up in a few months--and be billed well before the end of the 2011-12 financial year.

But that's not how things panned out. The deal, he says, met months of delays. "We only closed it in the last quarter of 2012-13," says Shah. "In spite of demanding a proof-of-concept and showing enormous interest initially, the customer delayed the final signoff."


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