Credit: Dreamstime
Vendors are spectacularly missing the mark in managing the fallout of Covid-19 in the channel, with partners across Asia Pacific joining forces to condemn current relief efforts.
Following off-the-record briefings with more than 80 partners across the region, the majority of vendors have been slammed for being “missing in action” as economic realities start to bite, with global headquarters too slow to respond to on-the-ground market concerns.
On the flip side, some vendors have been criticised for moving too far in the other direction, spamming the market with information overload yet offering nothing more than “surface-level” incentives which lack real commercial substance.
Either way, partners are currently being failed by those operating at the top of the supply chain.
Following off-the-record briefings engaging with more than 80 partners, featured providers predominantly serve the markets of Australia, New Zealand, Singapore and India, in addition to Malaysia, Indonesia, Thailand and the Philippines. With a focus on tier-2 partners, responses span value-added resellers, managed service providers (MSP) and system integrators, alongside born-in-the-cloud players and specialist consultants.
A decision was made to ensure all partner and vendor names remained anonymous to ensure the overriding issues were highlighted and addressed. While some vendor response efforts were applauded, the majority verdict signalled a channel in need of intervention.
Below is a highlighted summary of partner responses to the opening question of: which vendor(s) is responding best to Covid-19 from a partner perspective?
‘Surface-level incentives’
As the need for informative, educational and actionable content heightens, technology giants are falling over one another to reassure partners that help is on the way. Yet countless emails, blogs and webinars are falling on deaf ears, with concerned providers overlooking baseless communications in favour of “meat on the bone” type messaging.
Vendor engagements are welcomed and in most cases required, but a “quality over quantity” approach must be adhered to for partners to take advantage.
“We’ve received lots of ‘we care about you’ emails but nothing of commercial substance to date,” observed one Australian MSP. “We’re not standing anyone down but we have customers reducing spend and I doubt some will be able to pay us in the coming weeks.
“One of our national retailers recently sent out a letter saying they are delaying payment on all invoices for 90 days and to ask for our understanding. In a couple of months time there are going to be a lot of MSPs hurting.”
A similar scenario is playing out in Singapore, according to one local system integrator; “other than providing lots of information, assurances and virtual meetings, no vendor has actually helped our business in any way.”
Likewise in New Zealand, vendors are attempting to offer innovative ideas and solutions, yet “marketing is flooding our email inboxes without making an actual difference”.
For one Australian-based MSP, vendors can help through addressing four key partner challenges, starting with immediate cost relief from digital-based products in which there is no direct cost to manufacture, in a move designed to “assist the entire supply chain”.
“Temporary relief discounts for existing customers and contracts are also needed, plus the ability to reduce user count without penalties,” the partner added. “We can’t simply defer costs, this will cripple businesses at the back-end.”
Secondly, cash flow support for subscription-based services is required to remove the threat of disconnection or access removal should customers default and bills become unpaid.
“This would require more than an extra 30 days,” the partner explained. “We may need 12 months to pay for the current three months, depending on our customers.
“Thirdly, an easy to access service suspension for accounts where companies have been forced to shut doors through no fault of their own. Finally, release from minimum commitment contracts in the supply chain - we all had plans prior to this, but those plans can’t be followed right now.”
‘Missing in action’
When asked which vendor is responding most efficiently to Covid-19 from a partnering perspective, the most common response ranged from; “none to not many”.
According to one Kiwi cloud specialist; “none have front-footed a specific Covid-19 response. We’ve seen an offer for extended terms, but that’s about it.”
Meanwhile in Southeast Asia, a leading cloud provider has criticised the response of its largest platform vendor, insisting that aside from a couple of WhatsApp messages from partner account managers, a proactive approach has been desperately lacking.
“Considering we have a limited number of partnerships, we haven’t heard much from our biggest cloud vendor,” said the partner, which serves the entire Asia Pacific region. “They have made some training and certain remote working solutions free but nothing has been provided to help partners financially.
“One partner manager advised us to off-board ‘risky customers’ who may not be able to pay their cloud bills, to protect us from the liability of paying the vendor. This means that partners are liable for payments even if the customer is unable to pay.”
Aside from pushing out government briefings to help partners position solutions to the most suitable customers, one Singapore-based MSP echoed channel sentiment to insist; “I’ve not seen many support measures in place”.
Staying in the city-state, one award-winning specialist warned platform vendors to quickly realise that if the born-in-the-cloud partner ecosystem collapses, the knock-on effect could be irreversible.
“It will have a huge impact on customer implementations with many SMB and mid-market customers no longer in the position to take up services from the big four that will be left standing once everything is said and done,” the partner added.
Of the vendors attempting to help partners manage the crisis however, most have been too slow to respond, added one infrastructure specialist in New Zealand.
“Vendors are challenged like all of us but there is a real need to think about the long-term health of the ecosystem versus the short-term appeasement of shareholders,” the partner added. “Some vendors on the ground get it, but regional and global headquarters are too slow to react and make decisions.
“While some telecommunications providers have been supportive during the early stages, software and hardware vendors to date have not presented us with any options.”
Staying in New Zealand, one cloud-focused partner added the speed at which such dialogues translates into hard assistance and support remains “quite variable”.
“So far, three of our major technology providers have actually agreed to provide tactical support in the form of relaxed payment terms which mitigate our exposure to any potential short-term cash flow due to customer defaults,” the partner outlined.
For one Australian-based partner, the situation facing the channel is simple but stark; “people are hurting, losing their lives, families losing their homes. Now is the time for companies to act with compassion and a genuine sense of support for the industry that has made them successful."
In part-two, partners will outline the key requirements needed from vendors to ensure long-term channel stability while part-three will offer vendors the opportunity to respond through detailing support packages and current incentive schemes.
To assess the key partner requirements needed from vendors to ensure long-term channel stability, visit part-two - Partners to vendors: How to help during Covid-19. To understand how vendors responded through support packages and current incentive schemes, visit part-three - Vendors to partners: Support packages are available.
