Score one for the channel

Now I don't usually mention companies by name but since this is already in the public record I don't think there is anything wrong with it. An Orange County, CA Superior Court judge recently chastised Cisco for its channel contracts and its practice of grabbing clients from channel partners. If you want to read the story here it is.

In all honesty, I cannot single out Cisco in all this because this is behavior exhibited by many vendors in the IT channel. At the heart of this issue (contract law is what is being discussed in the legal case) is how vendors and MSPs (i.e., the IT channel) interact with one another and how we are going to behave moving forward. What is very apparent to me is that the system, as we know it today, is broken and needs to be fixed.

Can it be fixed? Yes, I believe it can. I think that one of the biggest problems is the issue of field sales representatives who are pressured from their management to produce sales. This pressure almost always brings out the worst in people. I have heard first hand reports from MSPs who have had their clients "poached" by a vendor sales rep when the MSP was responsible for bringing the vendor into the relationship in the first place.

Vendor upper management must be solely responsible for the behavior of their sales reps. If sales people are pressured to produce direct sales (and the vendor is also trying to sell to the channel) this will produce an adverse result. As long as channel vendors have a direct sales approach that rewards those direct sales over the indirect we will have these types of problems.

Now, the Cisco issue brings up a question of equality. Do vendors view the channel as a bunch of stupid companies that don't know how to protect themselves? Probably. Do channel companies (i.e., MSPs) need to be more vocal when it comes to vendor abuses? Yes. This does not mean lawsuits should start increasing. Instead, I would like to see a more open and honest discussion about these issues so that future legal fights like this one can be prevented.

Keep this in mind. If the IT channel is fixed and channel vendors and MSPs can work in harmony, I do believe there is a lot more money to be made than by fighting one another.