The channel market has shifted from product selling to value-added solution providing

Jayant Deo believes that channel engagement is not merely about signing
more partners. Instead, it has a lot to do with keeping their interest alive in
the products. This is why RAD India is not going all out to expand its channel
network, but instead is scrutinizing the antecedents of all the partners it
would like to be associated With on a long term Basis

RAD used to have a huge channel network, which has now shrunk. Why?

RAD India started its Indian business 19 years ago with an exclusive
distribution with MROTek. Till 2004, we had a network of over 40 partners.

Four years ago, these service providers started acquiring hardware directly
from manufacturers as they could get good deals from them and became a part of
the supply chain. Earlier too they were buying from us, but that was for their
internal consumption and to cater to a premier enterprise segment. But in 2005
they started buying from us for the mass market as well. They also started
offering service level agreement, which worked for customers who started buying
from these providers. This also worked for us because the volume of products
picked by the service providers was huge.

So, our channel partners lost business opportunities as customers would go to
the service providers for their data access products. As a result of this
transition only those partners who could specialize on our products remained
with us. So we have around 15 odd partners now who have the domain expertise
about data access or know our product line very well.

But why did you not continue to add to your channel network?

The channel market has shifted from what used to be. The market has shifted
from a product selling one to a more value-added solution providing one, where
only a few partners are present.

Apart from this, we are not a single product company-we have over 250
products with around 10 models in each product. This also gave the impression to
partners that our products were complicated and difficult to sell. This is why
only a few partners still work with us who can specialize on our solutions and
have thrived.

What is your go-to-market strategy now?

70 percent of our products are sold by service providers, while around 20
percent is through our channel partners. In the remainder of cases, where
neither the service provider nor the partner can cater to the customer, we
directly engage with the client so that we do not lose the deal.

Most service providers have realized that if they need to go through to a
customer they can easily collaborate with a partner who already has a foot in
the door there. So would you not want to engage with these IT value added
resellers and solution providers (SPs) as well?

It is true that the SP already has a foot in the door. In the past four or
five years, there has been a shrinking in the partner community in the country.
This is because most of the partners largely rely on the transactional mode of
business than on the solution providing aspect.

This is one reason we have shifted from the active channel business. We
prefer to let MROTek manage it for us. This is because we have a long engagement
with them and they understand the channel better than us.

We do get some need-based leads from the partners which we willingly work to
fructify. But this is more on an one-off transactional basis than a continuous
engagement.

I see more focus on the application solution provider because the customer
stickiness there is far higher. I do not see a dramatic need or growth happening
in the reseller segment for our business at the moment though. I would love it
if it were otherwise.

Vinita Bhatia

vinitavs@cybermedia.co.in