2112 Survey: VMware Best, Dell Worst at Managing Channel Conflict

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According to a new study by The 2112 Group, VMware tops the list of vendors that does the best job mitigating channel conflict. On the other side, Dell and Microsoft top the list of vendors that do the worst job.

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Channel conflict -- the clash between vendor direct sales and partner indirect sales -- is a persistent fact of life in the channel. Vendors profess to want partners to be successful, but not all do a great job of mitigating the volume and severity of conflict. According to The 2112 Group’s 2nd Annual Channel Conflict Report, VMware Inc. and IBM Corp. top the list of vendors best at managing channel conflict; Dell and Microsoft top the worst list.

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The 2112 Group, publisher of Channelnomics, polled 120 solution providers about their channel conflict perceptions. Overall, the channel conflict severity level remains virtually unchanged over 2012, but solution providers say vendors are more engaged in co-selling with partners and fulfilling direct-led sales through the channel.

The 2112 Group asked solution providers to name their top three vendors that are the best and worst at managing channel conflict. The intent: to show the difference between positive and negative perceptions.

VMware topped the list with 28 percent of solution providers saying it does a good job, showing significant improvement over the previous year where it earned the confidence of just 10 percent. Solution providers saying VMware does a bad job was just 10 percent, which is roughly the same in 2012.

VMware was the only vendor to earn a super majority of the confidence vote among solution providers. The next vendor on the good job list, IBM, garnered the confidence of just 13 percent of solution providers. Microsoft Corp. and Lenovo tied for third with just 10.6 percent each.

Where VMware is the standout on the good job list, Dell Inc. earned the same distinction on the bad job list. Twenty-nine percent of solution providers say Dell doesn't do a good enough job managing channel conflict with partners, up from 22 percent in 2012.

Since entering the channel in 2007, Dell has been dogged by the conflict issue as it maintains a strong direct sales force across all its divisions. Nevertheless, nearly one-third of Dell’s revenue flows through channel partner sales.

Microsoft ranks second on the bad job list with 19.5%. Microsoft’s good job rating fell 11 percent year over year, where its bad job rating fell just 4 percent. Microsoft continues to be criticized for its half-hearted Surface tablet channel strategy and pushing cloud products through referral programs.

Third on the bad list is CA Technologies Inc., which got a poor job rating by 12 percent of solution providers. While not good, CA’s channel conflict management seems on the upswing. The negative rating is down 5.6 percent over 2012. Perceptions of CA’s channel performance are typically low given its enterprise focus; however, CA’s entry into midmarket through managed services and backup technologies could gradually change perceptions.

A complimentary summary of the 2nd Annual Channel Conflict Report is available at The 2112 Group Web site. Full reports and 2112 research subscriptions are available for purchase. Click here to get a copy of the report.

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