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Encyclopedia for Technology Channel Management |
Direct Channel
A direct channel is an organization owned by the company providing the product or service which acts as a conduit to the customer. Examples: Field end-user sales force or a telesales organization. A single catalogue is NOT necessarily a channel, it is a sales tool. The catalogue organization is the channel if it: (1) creates and supplies the catalogue, (2) is contacted by the customer, (3) takes the orders and (4) fulfils the orders
An indirect channel is a conduit to the customer which is not owned by the vendor of products supplied through the channel. A channel is composed of a group of companies whom have a similar business model and selling similar products and services to a similar customer set.
Hybrid channels are created when more than one channel member must participate in a single transaction or solution for the customer. For example, a hardware vendor and software publisher might team to provide a solution for a specific industry. The hardware vendor might provide hardware and system configuration while the publisher always provides the software, installation, training and on-going software support. The creation of this type of channel is often the only way for a commodity hardware vendor to enter a highly specialized marketplace. Most IT channels are hybrids if the marketing front end of the sale is considered in its sales and marketing steps. Hybrids are extremely effective if managed properly, but each transfer of responsibility between parties must be managed or the results may be poor.
A direct channel established via the World Wide Web, intranet, or extranet which acts as a retail mall or catalogue sales organization. Usually supported with phone sales and technical personnel who assist with transactions and technical questions. May provide exceptional efficiency when teamed with a fulfillment house for packaged goods (books, software).
Channel Partner or Channel Member
An individual company that forms a contractual relationship with a vendor organization to act as a conduit for the vendor's products or services to a customer set. The channel member generally has a business model that can be identified by one of the common channel terms listed below. The role of the channel partner varies by customer type, supplier type and business model of the various companies comprising the channel. For instance, all value-added resellers (VAR's) are considered a distribution channel, but within the VAR channel there are different types of VAR companies that may address unique customer sets and offer specialized "value added" system elements required by their customers.
Global Account Manager (GAM)
A business development sales position for the largest corporate accounts whose operations span multiple international geographies. In most cases, global account managers are not so much product sales oriented as they are customer market share oriented. They have goals that relate to the percentage of the customer's worldwide total information technology sales (in their company's category of products or services). There is usually a global account management team composed of the GAM and customer oriented support and sales staff, including a variety of specialists. Reserved for the most important customers who are setting global IT acquisition strategy in which the GAM's team plays a key role. Sometimes have full profit and loss responsibility for the account worldwide.
A sales position for large corporate accounts worthy of putting an account team in place. The Major Account Manager or Rep is responsible for the total revenues, and sometimes the profitability of, a key corporate account. Usually has a team of specialists focused on the account, but may have more than one major account unless the account is very large.
A sales representative who is expected to sell almost exclusively by phone. May be teamed with other sales representative in account or territory teams. Manages customer accounts (especially Inside Sales Rep) for aftermarket sales in many companies. May have responsibility for total sales in a product line or for a market.
A sales representative having responsibility for a number of accounts in either a geographic or market (vertical industry) territory. May access a pool of specialists or services personnel to serve a variety of accounts. Generally has targets and quotas for revenue and sometimes margin(s). Probably has a face-to-face sales responsibility as opposed to primarily telephone sales responsibility. However, many territory representatives sell as much as 50% of their total quota via phone sales to existing customers - frequently without adequate phone sales training, but with good general selling skills.
A term used to refer to a specific contractual relationship with a type of system vendor or software publisher. Used in a generic sense in the industry to refer to any company which licenses or purchases technology from its owner for incorporation into a combined hardware or system solution that is marketed under the OEM's brand. Example: A company that incorporates another publisher's report generator into an application product owned by the OEM. The strength of the OEM relationship is the diversification of brand recognition and sales channels available through OEMs. The OEM may take products into markets totally unavailable to the publisher/vendor because the publisher/vendor is unknown or less well known than the OEM in that market.
Professional Services
The Professional Services channel's core competency is consulting. Generally, such firms have four organizational structures: consulting services, education and training, software development and applications management. Unlike Systems Integrators, these firms do not perform integration services. This channel typically is vendor independent since objectivity is key to their credibility. Examples of Professional Services firms are BSG Consulting and independent software development contractors.
A software publisher is the originator and creator of a software product licensed to the public under a brand name registered to the publisher. The software may be licensed by the publisher to other parties for distribution or sub-licensing as (1) part of a bundled software/hardware solution, (2) general distribution to the public, or (3) incorporation into other products that are then presented to the public under another brand name registered to the licensing party. Leading examples of this type of company are Computer Associates, Inc., Microsoft and Oracle Corporation. The most frequent use of the Independent Software Vendor (ISV) designation is for a software company selling vertical applications or specialty utilities.
Suppliers who sell primarily software and computer accessories, such as modems and disk storage. With a knowledgeable corporate sales staff and discounted prices, they are attractive to companies seeking an easy-access computer channel for its employees. These channels are fighting to hold their place in the market while competing against superstores with a broad array of software and products at lower prices.
A discount computer products dealer that carries substantial inventory at low prices. Typically located in population centers where high volumes of computer purchases could be anticipated. Similar to a mass merchandiser, this channel focuses on retailing expertise rather than technological expertise. Superstores are the high volume channel for computer products. Any product placed in that channel will, by inference, be considered a "high volume" product and likely will result in lower street prices. Volumes, however, promise to be significant as the stores reach a greater share of urban buyers. Comp USA and Best Buy are superstore retailers.
System Integrator
A company that takes a project approach to the development and installation of a custom automation solution for the customer. An example of such a company is Systemhouse, or ISSC. The strength of this channel is its project management, strategic alliances with other partners who can provide specialized technology, materials procurement capabilities, and specific integration skills.
A label currently in flux. Traditionally taken to mean a company that combined specialized business application product with hardware and services to provide a turnkey systems solution for a specific industry. This channel is now divided into segments. The first segment is the traditional VAR, now sometimes called an "application VAR" with reference to the proprietary application on the VAR's system. The second segment is sometimes called a "horizontal VAR," with reference to the broader audience to which the VAR's solutions are addressed, e.g., database applications. Yet a third segment is called a "LAN VAR" or "network VAR" with refers to a group of companies whose primary value added is local area network installation. Many LAN VAR's have business models that closely resemble a system integrator.
These are generally the most aggressive price-setters in the industry, relying heavily on membership fees to make a profit. Generally found in industrial warehouse locations with open shelving, concrete floors and minimum sales assistance. Examples include Sam's Warehouse and Costco/Price Club.
Many companies are providing product catalogues to their users. Catalogues selling is a superior after-market sales vehicle, and to some extent, an excellent demand generator for niche products. The Programmer's Connection that sells to application and systems programmers is a successful case in point. Catalogues may be print, electronic, or on CD-ROM disk.
Computer Dealer/Aggregator
Also commonly called "reseller" or "retailer." Refers to a business that has a storefront operation and provides computer products and related services in a retail business model. Products sold through the dealer must be very simple to demonstrate and sell. The strength of the dealer channel lies in the variety of locations nationwide (coverage). ComputerLand is an example of a computer dealer.
Refers to a type of company that supports a business model similar to that of a wholesale distributor, but which may integrate systems, add product to systems, or test product/system configurations for customer. The strength of the distributor channel is in materials management, system integration and volume product fulfillment. This channel is becoming increasingly attractive to hardware manufacturers as a key to streamlining their supply chain by taking on various system assembly jobs heretofore performed by the vendor. However, to support the economics of a distributor relationship along with other indirect channels, significant changes must be made in pricing and sales compensation structures. Distributor channels are complicated by the dual role many distributors play in selling both to end-users and channel members. This inevitably leads to channel conflict unless policy, compensation and penalties control the problem
Suppliers who carry discounted merchandise, at times seasonal in nature and have a centralized checkout. Their strategy of providing product presentation and display, brand diversity and customer service results in somewhat more limited number of brands than other retail channels. The mass merchant channel includes companies like Walmart and Target.
Refers to suppliers of office equipment, such as copiers, typewriters and facsimile machines. Similar to computer dealers in size, staffing and customer base. They typically carry products from only a few manufacturers. They are expected to move into high growth categories such as PCs, peripherals and consumables. They rely on services for a large percentage of their revenue, offering complementary service and maintenance agreements and on-site repair.
Office Equipment Superstores
A discount office equipment supplier, similar to a computer super store. Offers a limited selection of a product category and purchases it in volume, thus offering product at below-competition prices. Unlike computer super stores, they provide only limited sales help, warehouse-style floor planning and centralized regional distribution points to keep costs down. Larger suppliers, such as OfficeMax and Office Depot provide commission sales staff to handle the more advanced computer equipment.
Company Partner
A company that forms a contractual relationship with [company] which allows them to market a product. Maybe in any channel, but are authorized to pass product to an end-user, as opposed to passing product through to a reseller.
Partner
Always a noun. Should not be used in the context "They partnered with us." Companies "form partnerships," or "enter partnerships."
Reseller
A generic term for any company authorized to sell or pass on a license for another company's products or services.
The formal product announcement to the public, probably not a full-scale launch. For some companies this is as simple as sending a letter out to existing customers to tell them that they can now buy a feature that they could not buy before.
A product is generally available when it can be stocked by channels and shipped to customers. General availability is a milestone that indicates the product is packaged, ready to go to customers and can be ordered and delivered without delay. In many cases, IT vendors announce a product before it is generally available and must provide a date on which customers will be able to order. This practice can backfire because prospects read announcements, call direct and indirect sales organizations, and then cannot buy the product. If the prospect is irritated enough, he or she may never call again.
Launch
The first, sensational demand-generating marketing campaign for a new product or service. Size of the launch is not as important as the significance of it. For example, a launch of a major innovation by a small company may not be worldwide, but to the market targeted by the small company, every effort is made to create immediate demand for the product. Usually includes special marketing promotions and associated sales tools and materials. May "make or break" the channel's ability to succeed.
Beta Version
A release of software available to selected customers for testing and results reporting. The beta version is licensed using terms any Runtime Version d conditions that favour the customer in order to get the best possible user test of the product. Following beta, corrections are generally made to the code prior to general shipment of the product to the public.
Software licensed for use by a channel partner or end-user customer to demonstrate the capabilities of the product. Generally not a full function version of the product. If a full-function version, it has a time limit beyond which it cannot be used without purchasing a license (a time bomb).
The fully operational, brand identified product.
The license between a publisher and its channel partner that allows the partner to represent and distribute the publisher's product to end-user customers under specific terms and conditions.
The contract between the customer and the publisher that authorizes use of the publisher's product under specific terms and conditions.
A subset of the publisher's product, used as an enabling technology, embedded in a channel partner's application. The runtime version may or may not be identified to the end-user customer as a portion of the partner's application.
5:Wish - I wish I could change, the wish I made before the change - Steve Parish Original Affirmations V2
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