Networking
Cisco displaces D-Link
D-Link, which won the 2007 and 2008 Channel Champions crown, has been displaced by Cisco in 2009. HP ProCurve retained its third position, while Netgear and Extreme Networks failed to make the final cut as they polled less than 10 percent of the category votes.
Cisco
The company emerged as the most-preferred networking vendor in 2009 owing to its energetic SMB strategy, several new channel initiatives, and programs which created opportunities for partners in a tough economy.
The company’s small business portfolio, which was earlier sold under the Linksys brand, was rebranded as Cisco and priced aggressively to give D-Link a run for its money. Respondents said that the Cisco branding, with prices at just 10-15 percent higher than D-Link’s, helped the company to make significant inroads into the SMB market where D-Link has been strong. Also, since August 2009, Cisco has increased its engagement with distributors and has been running several distributor-led promos and programs. This, many respondents said, has increased the channel demand.
The company’s program, Navigate 2 Accelerate, launched in June 2009, was well appreciated by partners because it offered them financing options through Cisco Capital. Cisco’s SMB partners (even in cities such as Nagpur and Rajkot) said that Cisco Capital was prompt in approving customer financing. This helped them get business which otherwise wouldn’t have been possible. Cisco Capital also offered partner financing options which allowed them to offer Opex model to customers when they were wary of Capex.
Some of its programs like Avant Garde, and PRTC (partners reasons to call), helped partners to develop new businesses. Under the Avant Garde program, Cisco worked jointly with partners to identify and address new opportunities, while the PRTC program helped partners increase the productivity of their sales organization.
On the flip side, the non-availability of Cisco products emerged as a big problem. Due to inventory forecasting issues, Cisco is facing an acute global shortage of its commercial and enterprise products for the last two quarters, and, according to respondents, the availability is likely to improve only from June 2010.
The shortage has led to an influx of parallel imports and refurbished products, and this has affected the channel business.
D-Link
Although D-Link continues to be the most widely available networking brand, the channel verdict seems to suggest that the company has suffered in channel satisfaction in 2009 due to its switch from a regional to a national distribution model.
Respondents said that following the appointment of Redington and Ingram as national distributors, the role of many long-time regional distributors (RDs) has diminished, and this has led to availability, pre-sales and post-sales support issues.
Respondents reported that both Redington and Ingram didn’t have good ex-stock availability of even fast-moving products such as the 8-port, 16-port and 24-port managed and unmanaged switches. Also, with an additional layer of national distributors, partner profitability has suffered.
While respondents appreciated the move by D-Link to offer lifetime warranty from October 2009, they complained about delays in post-sales support. Respondents said that earlier, to take care of cases of product failure, the RDs used to stock spare inventory for replacement. However, they have now stopped carrying such inventory. This has meant delays in repair and replacement—in many cases up to 3-4 weeks. Further, the company’s plan to put in place a network of authorized service partners hasn’t materialized as expected.
On the positive side, respondents rated the company’s partner portal, which was introduced in 2009, as very resourceful.
On channel policies and management, respondents opined that the management team headed by KR Naik before the demerger was better at managing channel relationships. D-Link has now become more process-driven, which has reduced its channel responsiveness. While processes are necessary, respondents opined that they should not come at the cost of channel engagement and responsiveness.
HP ProCurve
HP ProCurve has largely followed a strategy to align with HP server and storage partners. Respondents said that the vendor has good price-performance, and that its lifetime warranty is a strong differentiator, but that it lacked clear channel strategy and channel engagement during 2009.
Many HP partners who voted for ProCurve expressed their dissatisfaction with the vendor saying that the company was doing only opportunity-based business and did nothing to support them in developing new business.
Also, ProCurve’s move to a stock-and-sell model during the year proved counter-productive and led to price discounting. As a result, products procured by authorized partners from distributors at SPC were available in the open market through sub-distributors at much lower prices.
Many partners hope that with ProCurve now becoming a part of HP’s server and storage business, the vendor would focus more on the networking business and improve its partner engagement.
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