Giving Cisco a run for its money

With its NetScreen Technologies security products folded into its router-centric portfolio, Juniper stands to become a much stronger presence in the enterprise arena than it’s ever been. Solid penetration of this market is contingent on a strong indirect sales channel, because building a direct salesforce huge enough to meet all the opportunities would be very expensive and time-consuming.

As I write this, Juniper is putting the finishing touches on a channel program upgrade under the management of newly appointed executives Tushar Kothari and Bob Bruce, two well-known channel veterans with Cisco roots.

With its NetScreen Technologies security products folded into its router-centric portfolio, Juniper stands to become a much stronger presence in the enterprise arena than it’s ever been. Solid penetration of this market is contingent on a strong indirect sales channel, because building a direct salesforce huge enough to meet all the opportunities would be very expensive and time-consuming.

Vendors work with channel partners because the partners, as a whole, have the bandwidth to customize the vendors’ products to meet users’ needs in ways the vendors can’t. For their part, the partners acquire products at substantial discounts and receive other benefits, such as rebates, marketing money and training credits. There’s no way to run these programs on a shoestring, but they’re still a lot less expensive than trying to sell and service all customers with one salesforce.

The thing is, vendors often are tempted to solve short-term problems by taking something away from the partners. Maybe a deal can be taken away from a partner to maximize profit. Or maybe the benefits for the partner’s investment in training can be reduced to help the vendor trim costs.

It’s that quarterly report mentality that can make numbers look better than they are – at substantial future expense, especially for the vendor. The partner is expected to smile and take the hit.

Partners might take the hit, but I’ve never seen them smile about it. Furthermore, they’re never too bashful to talk about who done ’em wrong. So in exchange for whatever short-term benefit, the vendor gets lumped into a class of companies the partners consider a bad risk, and the partners end up running back to Cisco or another vendor entirely.

Am I saying that vendors have to buy their way into the channel? Well . . . yes. Nothing comes for free. But what’s more, giving Cisco the ultimate run for its money will depend on building a solid proposition for the partners and then consistently living up to those commitments over time, even when there’s a short-term advantage to be had by doing otherwise. Will Juniper succeed where others have failed? Too early to tell.

Cisco is not without its channel vulnerabilities, but no vendor has really stepped up to the plate in a way that separates it from the pack. This industry is mature enough that you’re not going to upset the apple cart without some pretty bold moves, which cost money and take a great deal of courage.

And there are no guarantees. Admittedly, this is a hard line to take when you live in a world of shareholders, but the payoff can be great, even heroic, if someone is willing to raise the stakes and can then deliver.

Presti is research director of IDC’s Network Channels and Alliances service. He can be reached at kpresti@idc.com.