D-Link most networked with channels
By Jamsheed Gandhi
The networking market has been growing faster than the overall IT market. Over the past two years, the demand for networking products has grown at a CAGR of 35 percent. Several factors have contributed to this high growth, including the growth in organized retailing, retail banking, financial services and the SMB segment.
Tremendous business growth among SMBs has compelled them to deploy IT systems and business applications to improve organizational processes and systems, thus pushing the need for networking—LAN and WAN.
This has been further fuelled by the increased availability of broadband in even remote parts of the country, thanks to BSNL and other telecom providers. SMBs are also realizing the cost-benefit of IP-based communications systems, mainly VoIP, and now even video conferencing.
The mass penetration of mobile telephony has resulted in users getting used to wireless communication; this has propelled the growth of wireless computing, and led to increased adoption of Wi-Fi across all types of
customers.
With faster and converging wireless standards like 3G and WiMax on the horizon, the wireless trend can only grow. The next big thing on the networking front promises to be unified communications which will make the world more networked.
Channel relationship
In what is probably the most important factor that defines our rankings, survey respondents ranked D-Link first, followed by Cisco, Nortel and Netgear. The parameter included quality of channel relationship management, regular communication processes and vendors’ responsiveness to channel issues.
The reach that D-Link has in terms of a direct presence throughout the country is unbeatable by any of the other manufacturers. With a local presence in most of the B- and C-class cities in India, it provides a direct interface to its partners. This is highly appreciated by channels as it helps reduce turnaround time in matters of pre-sales and post-sales, and improves responsiveness to channel issues.
Some respondents complained of a conflict of interest in D-Link’s distribution strategy as many of its regional distributors are also network integrators; this often gives them an undue advantage against resellers while pitching for deals. Though up to now such cases have been dealt with by D-Link fairly and transparently, respondents contend that D-Link needs to review its distribution strategy to avoid such serious conflicts of interest.
For their part, Cisco channel managers need to be more responsive to partners in tier-2 and tier-3 cities. A few of the vendor’s Premier partners complained of Cisco playing favorite to its Gold and Silver partners when it came to providing preferential pricing for bigger projects and other pre-sales support. Nortel and Netgear, on the other hand, have the right intent but lack execution; they don’t have enough personnel to manage the channel’s needs.
Service and support
This parameter covered aspects like responsiveness of the companies in pre- and post-sales, quick turnaround time for part replacement, and toll-free technical support.
Again here, D-Link ranks first. Respondents say that Cisco’s warranty and post-sales support is process-oriented which makes it complicated and cumbersome for customers. By contrast, D-Link support is people-driven, which is preferred by channels and customers alike.
On the RMA front, D-Link with its 16 centers across the country has a faster turnaround than Cisco. On the warranty front, Nortel is believed to have the best policy of life-time warranty on most of its SMB products. D-Link’s standard warranty ranges from 1-2 years on different products, while most of Cisco’s products come with a 60-90 day warranty (for extending it, customers need to buy a support package). This gives D-Link a pole position followed by Nortel and Cisco.
Price-performance
Most channel partners cater to SMBs, where D-Link is the most preferred brand on price-performance. Even several Cisco Premier and Silver partners sell D-Link products and vouch for their effective price-performance in the SMB segment.
The majority of respondents said that small and medium businesses rely heavily on solution providers’ advice for choosing a networking solution, and are mostly recommended D-Link as it fits their IT budgets. Cisco is sold only if the customer asks for it.
The product range from Nortel is quite attractively priced and has started creating a niche in the market.
In the wireless space, Netgear followed closely behind D-Link as it’s perceived to offer cost-effective solutions. Linksys continues to be perceived as a wireless brand, but its pricing lets it down.
Marketing and branding
Cisco is the brand with maximum awareness and is regarded as an aspirational and premium brand, but this actually works to its disadvantage in the price-sensitive SMB segment.
D-Link is regarded as a value-for-money brand, and also has significant pull due to its longer brand association with users. Netgear’s brand awareness is limited to wireless solutions. Although Linksys is a part of Cisco, not many customers are aware of it, and thus it does not benefit from the goodwill associated with Cisco. This makes it merely a follow-on player in the Indian market.
In terms of local marketing, D-Link was perceived to be more aggressive than Cisco in tier-2 cities. Cisco’s marketing is limited to only tier-1 cities so far. Nortel lacks a brand connect with customers, and it is also low on user marketing.
Training and certification
With networking technology changing continuously, channel partners value training a lot. D-Link was ranked better as it regularly conducts two training sessions for solution providers even in tier-2 and tier-3 cities. The company’s training is available even to all partners.
Respondents in cities like Chandigarh and Jamshedpur said that they have never been exposed to Cisco training. Netgear ranked ahead of Cisco as it conducts quarterly training programs in more than 15 cities for the functions of both sales and technology. But Cisco takes the cake in the area of certification/authorization where its brand holds more value in the market; being Cisco-certified provides more credibility to partners.
Conclusion
D-Link continues to be the channel favorite in the networking segment ahead of Cisco despite the latter’s overwhelming lead in marketshare and revenue. Channels believe that Cisco has so far failed to understand channel needs and has been focused only on tier-1 cities and large partners. However, with Cisco launching a major SMB initiative, channels are hoping that there will be a positive change in its approach. Netgear, despite its limited portfolio, has done a good job in managing channel expectations. Nortel has done well considering that it launched its SMB strategy early last year; it still needs to prove itself on the ground.
Intro
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