Vendors 2.0 – A Channel-Focussed Marketplace

In the past, a direct sales model may have been the most effective option for big name technology vendors. But as time goes on, we’re seeing a clear shift to ‘vendors 2.0’ – a channel-focussed marketplace. In this post, I’ll explain what that means with examples from my time at Genesis and Aura.

My first experience of technology vendors was with Siemens in the UK, back in the 90s. At the time, they had a fantastic share of the UK market, having bought their way in by acquiring GPT.

I spent my initial years at Genesis – my first venture – batting away legal letters from Siemens telling us that “bringing into service” an extension was illegal. In the end, they recruited us as a Siemens partner, and we became their most successful reseller of Hicom systems by the mid-90s.

However, there was a ‘glass ceiling’ in the size of systems that we could resell. My background was large enterprise. But Siemens were very slow to release the larger PBXs into the reseller market. As far as I’m concerned, that was the end of them in the UK market.

In my opinion, Siemens completely squandered their market share by trying to continue with a direct sales model in the higher end of products. Value added resellers (VARs) then went elsewhere – typically to SDX and Lucent for products.

SDX were awesome. They understood channel, supported their channel, and their sales rocketed. They went to the UK #1, they floated on the stock market, and then were bought by Lucent.

At Genesis, we decided to go with the AT&T Definity in 1995. We were introduced to Crane (an AT&T distributor) and sold our first one to a US law firm based in the City of London. In doing so, we became the UK’s first Definity reseller – followed by the UK’s most successful Definity reseller from 1996-2001.

Crane was founded by David George – and in David, I think I found the most trustworthy and channel-focussed person I have met to this day. I remember when I sold Genesis back in 2002, I left him a voicemail, saying that I’d sold and was starting again. He called me from midnight in Tokyo and said they would provide anything I needed to set up – credit line, technical help, whatever it was.

That was it. David looked you in the eye, shook your hand and delivered!

I’ll never forget the things I learnt from David. For me and many of the other partners that were Crane/Westcon customers, David was the epitome of good manners, straight talking and honest. Not to mention employing the best!

With such a change in our industry, you’d imagine the current crop of vendors would look at the competition and learn what works and what doesn’t.

We have some more traditional vendors in our market. In their time, they were market leaders with the best technology too! I can think of two main contenders. One went almost entirely channel and the other maintained a direct sales force and often had channel conflict.

Fast forward 5 or 10 years, and the one that was channel focussed has massively surpassed the other. Flip-flopping between channel and direct (taking deals directly and competing with its channel), the other provider has become a fraction of its former self. Most importantly, they still haven’t woken up and smelt the coffee – namely, vendors 2.0!

With the massive shift to cloud, accelerated by Covid, we now have a marketplace with several newer entrants.

One vendor in particular had a reputation for channel conflict and flipping customers direct. But recently, they have recruited some great channel talent and stated very clearly “we are totally committed to delivering by channel”. It’s great to see them taking this step.

With our comprehensive Solutions Hub, we’re engaging with many of the newer vendors. It’s refreshing to see that the channel is now ultimately seen as the best way to market – something that we have believed with religious vigour from the start!

The overriding message of vendors 2.0?

Learn from the lessons of channel gurus like David George. Embrace channel, trust channel, and they will deliver the epic growth you want. Some vendors (1.0) still haven’t learnt that if you screw your channel, you will turn your company into a rapidly dwindling version of its former self!