IDC: Networking Vendors Turn to the Channel to Reach Broadest Audience

In an effort to deliver products and services to an expanding customer base, networking vendors are turning to value-added resellers, distributors, and other channel partners to help them with distribution efforts. Market research firm International Data Corp. (Framingham, MA) agrees marketing and selling network equipment and services through the channel is an effective business models for reaching the widest possible audience.

"Reaching out and touching customers in geographically dispersed regions remains one of the more daunting challenges confronting networking vendors in today's marketplace," said Richard Dean, senior analyst with IDC's Network Support and Integration Services research program. "Although a wave of recent merger activity and strategic alliances has given some vendors additional reach, the expansion of indirect sales and service channels continues to offer vendors considerable opportunities."

IDC has found a high level of agreement between resellers and vendors on what makes an effective channel relationship. "Resellers are eagerly looking for vendors to signal a clearly defined, long-term commitment to selling through indirect channels," Dean said. "At the same time, vendors want to broaden their distribution channels for service and support to ensure end-user satisfaction and success of their products."

Multi-tiered business model
IDC believes the networking vendor/reseller multi-tiered business model remains effective for several reasons. In addition to offering expansive geographic reach, resellers often have access to the fast-growing small and medium-sized business markets, and many resellers have been developing improved customer support capability, which allows them to become almost transparent extensions of the vendor. Additionally, a lack of skilled technical labor continues to provide incentives for vendors and resellers to work more closely together in order to bring greater value to the customer.

IDC recently published Successful Service Strategies for the Network Channel: A Competitive Overview and Analysis (IDC #B20983). The report examines the channel support service programs of the top enterprise networking vendors. The report describes the electronic and on-site support, training, and joint marketing programs for the channel for each of the following vendors: 3Com Corporation (Santa Clara, CA), Cabletron Systems (Rochester, NH), Cisco Systems (San Jose, CA), FORE Systems (Pittsburgh, PA), Lucent Technologies (Murray Hill, NJ), Newbridge Networks (Herndon, VA), and Nortel Networks (Brampton, Ontario).

For more information, contact Sally Donovan at 1-800-343-4952, ext. 4219 or at sdonovan@idc.com.

Edited by John Spofford