Identifying and Addressing the key pain points of Indian Channel Partners

Channel ecosystem has always been an integral part of the IT industry. Every IT organization operates through a set of channel partners, they are the representatives of the OEMs to the end customers. These channel partners enable the reach of the OEMs to the last mile. So, it becomes important for the OEMs to understand the pain points of their partners and address those.
Let’s try to understand the partner challenges from OEM’s viewpoint and how they are addressing them and helping them to overcome.

Partner challenges
When it comes to expanding the reach of a company, they look forward to their channel partners who help them to reach the last mile of the country. But it is true that the partners face various obstacles while expanding their reach.  

While talking about the challenges, Harsh Vaishnav, Head - Channels, Nutanix India and SAARC says, “Channel partners in India face a multitude of challenges when it comes to expanding their reach, grappling with the vast expanse of the country and its economic disparities. The sheer geographic diversity complicates logistical operations, while economic discrepancies demand nuanced, tailored strategies. Moreover, navigating local competition and technological barriers, such as varying levels of technology adoption, further adds to the complexity.”

He adds, “At Nutanix, our approach revolves around proactive engagement with channel partners at every stage of our operations. Our channel team takes the lead in identifying new business prospects, while our account teams collaborate closely with partners to ensure customer satisfaction. This collaborative approach ensures that both parties are aligned in their efforts to meet the diverse needs of the market. Additionally, our hybrid multicloud solutions provide partners with the tools to offer customers unmatched flexibility in deploying data and applications across various environments, tailored to specific market segments. Leveraging Nutanix's extensive nationwide presence and robust support infrastructure, partners are empowered to efficiently serve customers across diverse locations.” The channel partners in the country face different challenges while expanding their regions and customer segments due to India’s varied culture, language, critical regulatory environment etc.

Khalid Wani, Senior Director, Sales, India, Western Digital explains, “Expanding into diverse regions and customer segments within India poses significant challenges for channel partners due to the country's vast cultural, linguistic, and geographical diversity, coupled with a complex regulatory environment and fierce competition. To succeed, channel partners must build strong local relationships, invest in market research, and adapt strategies to each region and customer segment. At Western Digital, our program fosters a collaborative ecosystem, equipping our partners with the necessary resources, tools, and support to effectively market and distribute our innovative solutions. By harnessing their market insights and expertise, we unlock new customer segments, enhance overall customer experiences, and tailor storage solutions to ever-evolving market needs.”

Highlighting another important challenge of lack of solution awareness, Russell Chena, Country Manager, Synology, SAARC Region says, “One of the major challenges our channel partners face when promoting the solution is the lack of solution awareness among local resellers. To address this, Synology conducts multiple training sessions every quarter to educate them on our latest solutions and how they can resolve issues for their end customers. Additionally, we host our annual mega event, Solution Day, to review our achievements in the region, enhance the awareness of our solutions, and interact with channel partners, fostering close relationships. In tier 1 cities such as Mumbai, Delhi, Bangalore, Chennai, and Hyderabad, Synology has established partnerships with dedicated local experts to assist our customers effectively. As in tier 2 cities, we collaborate with partners with nationwide reach, such as Eagle Information. Additionally, we ensure that the needs of online platforms like Amazon are adequately met.”

Elaborating at length on the challenges faced by the partners, Harshil Doshi, Country Director - India, Securonix says, “Accessing and penetrating different regions and customer segments within India can be a daunting task for channel partners because of the following reasons:

Geographical diversity: India's vast geographical landscape, coupled with its diverse cultural and linguistic differences, makes it challenging for channel partners to effectively reach all regions.
Infrastructure limitations: In certain remote or underdeveloped regions, infrastructure limitations hinder the smooth functioning of channel partners.

Regulatory compliance: Navigating the complex regulatory landscape in India can be difficult for channel partners. Compliance with various state and central regulations, tax laws, and trade policies adds layers of complexity to expansion efforts.

Market fragmentation: The Indian market is highly fragmented, with diverse consumer preferences and purchasing power across different regions and segments.
Competitive pressure: Intense competition from both local and international players poses a significant challenge for channel partners seeking to expand their reach.
Limited resources: Channel partners often operate with limited resources, including finances, manpower, and infrastructure.
Trust and credibility: Building trust and credibility among consumers in new regions can take time and effort.
Cultural sensitivity: Cultural nuances and sensitivities vary across regions in India.
Closed CxO Community: Customer CxOs are very closely connected and follow each other in terms of adoption of Technology Solutions and the Partners. So, there is an immense pressure of proper delivery and implementation of the solution.”

Payment and credit terms
The well being of a partner depends largely on its OEMs. It is the OEMs that protect the interests and profitability of the partners. They also help and facilitate the partners with payment and credits.    

Commenting on the same, Amit Luthra, Managing Director - India, Lenovo ISG says, “The payment and credit terms offered to channel partners vary depending on factors such as industry norms, business relationships, and negotiation dynamics. Typically, these terms include payment deadlines, credit limits, and any applicable discounts or incentives. We offer online payment gateways to smaller partners that have several advantages. These gateways enable businesses to accept payments from customers worldwide, enhance cash flow by receiving payments promptly, and reduce the need for manual invoicing, streamlining the overall payment process.”

Understanding the importance of its channel partners, Securonix has various GTM approaches with partners. With its service-led products and solutions, Securonix ensures the profitability for its partners. It also provides its partners with payment terms of 30 to 60 days.      Explaining the same, Harshil Doshi, Country Director - India, Securonix says, “Securonix truly understands the importance of Channel Partners. To make sure that the partners are successful it is very important to help them with flexible payment and credit terms to enable their business outcomes. Securonix has various models and GTM’s with Partners which includes a resell model and MSSP engagement.

Securonix products and solutions are service led offerings as the SoC operations require day to day service engagement of partners/SI with customers. Therefore, this business drives more profitability for partners both in terms of topline, through platform sales and bottom line through services. To add to this, Securonix offers healthy payment terms to its partner from 30 days to 60 days depending on opportunity type and size. While MSSPs with larger Business commitments are offered quarterly payment terms as well. Thus, making sure partners are not only profitable but also enjoy decent cash flow and liquidity in this business.”

Partner margins & Incentive programs
Partner programs and incentives offered by the OEMs are a crucial factor for the development of the partner ecosystem. The programs help them to remain profitable in the competitive market. It is important that a partner program should always be simple, profitable and favourable for the channel.

In this matter, Dell Technologies always garners feedback from its partner community and they will continue to do so in order to optimize and simplify its engagement with partners.    
  
While discussing the partner program, Vivek Malhotra, Senior Director – India Channels, Dell Technologies states, “Dell Technologies’ partner program has been rated as one of the best in the industry. With the partner feedback process we have in place, we have found that even our partners view our program as simple, predictable and profitable. We are keeping our program structure and engagement with partners consistent while we continue to invest in key focus areas. We design our rules of engagement (ROE) around deal registration and to govern our internal sales team behavior in a way that promotes customer choice while protecting the integrity of our partner program principles.

We listen to their feedback, and we will continue to review our operational model to ensure we’re optimizing and simplifying our engagement with partners, which we know is important to both our partners and our sales teams. At Dell, we are committed to investing in our partner’s end-to-end experience with us and are excited for the opportunities that will allow Dell and its partners to create together, for the future. We are proud of our Partner Promise - Together, We Stop at Nothing.”

Partnership, trust, and mutual growth are at the center of Western Digital’s channel policy. The company is very transparent about its pricing policy and this empowers its partners to be competitive and maintain its profit margins. Khalid Wani, Senior Director, Sales, India, Western Digital explains, “At Western Digital, our channel policy is built on partnership, trust, and mutual growth. We see our channel partners as an integral part of our extended family, empowering them for success while delivering exceptional value to our customers. Our transparent pricing policy enables partners to remain competitive, maintaining healthy profit margins. With a dedicated channel team and a robust partner portal, we're committed to addressing challenges, providing technical aid, and exploring new possibilities.”
Nutanix strengthens the position of its partners with programs that offer control over the sales cycle and strong relation with customers. The company has come up with many initiatives to ensure partner margins. Nutanix follows partner focused strategies.

Harsh Vaishnav, Head – Channels, Nutanix India and SAARC says, “We've structured our partner programs to empower our partners with greater control over the sales cycle, fostering stronger customer relationships and showcasing their expertise in Nutanix solutions. Our revamped Partner Program, Elevate, offers resources, training, and incentives specifically designed to help partners grow their Nutanix business.

Regarding partner margins in the competitive landscape of India and the fairness and achievability of incentive programs for partners of all sizes, we've implemented several initiatives to ensure fairness and accessibility:

Focus on Cloud Solutions: We place a strong emphasis on cloud solutions like Nutanix Cloud Clusters (NC2). This allows partners to meet the growing demand for hybrid cloud options, liberating customers from vendor lock-in. They can run applications and data wherever it makes the most sense.

Nutanix Surge Program: Nutanix recently announced the Nutanix Surge program, a special promotion that rewards partner organizations and individuals who successfully relay our leading cloud platform to select customers.

With Nutanix Surge, partners can unlock the highest level of incentives ever offered through our Elevate Partner Program. This includes the Nutanix Surge rebate, which can be combined with other Elevate Reseller Partner Program rebates provided all deal requirements are fulfilled.

Simplified Pricing Structures and Deal Registration: We offer straightforward pricing structures, deal registration processes, and incentives and rebates. These elements empower our partners to increase profits, revenues, and margins while closing business faster.

In essence, our partner-centric strategy equips partners with the necessary tools, resources, and support to succeed. By focusing on cloud solutions aligned with customer demands and implementing fair and achievable incentive programs, we ensure that partners of all sizes can thrive in the competitive landscape of India.”

Describing the channel program, Amit Luthra, Managing Director - India, Lenovo ISG says, “Our Lenovo 360 initiative is designed to empower channel partners for success. With unified global channel structures and productivity tools, we streamline processes and offer tailored solutions to meet evolving needs. Through rebate accelerator programs like "Better Together" and "TruScale Accelerator," partners can boost earnings by up to 30% across our product portfolio and as-a-Service offerings. Additionally, we invest in subject matter experts and provide concierge-level service to ensure partners have the expertise, products, and support necessary to thrive in today's competitive market.

Together, we're not just navigating change; we're driving it – empowering our partners to seize opportunities, deliver exceptional value to customers, and achieve unprecedented success in the era of digital transformation.”

Delivering on channel initiatives, Russell Chena, Country Manager, Synology, SAARC Region utters, “Since Synology mainly offers B2B solutions, our SI (System Integrator) partners typically maintain a margin that aligns with market standards to cover necessary pre-sales and post-sales services.

Synology also provides a Project Booking System (Deal Register System) to facilitate project support and safeguard the first partner who engages with the user and delivers the services. This practice ensures a healthy market environment.”

Channel partners navigating ways to stay competitive and profitable

Amidst the opportunities in India the partners are witnessing a lot of prospects but still, they are grappling with a lot of challenges like regulatory complexities, margin pressure, stiff competition etc. With all these challenges, it becomes very difficult for the channel ecosystem to maintain profitability and retaining business. Let’s see the viewpoints of the channel partners regarding their pain points and how they are overcoming the struggle.  

Regulatory Complexities

In India, channel partners need to follow varied regulatory complexities and compliance requirements. Adherence to the regulations is necessary and it also demands investment in compliance infrastructure. While elaborating on the regulatory environment, Vinod Kumar, MD & CEO, CIPL says, “Channel partners in India operate within a complex regulatory environment that encompasses a range of compliance requirements. These regulations can be broadly categorized into tax compliance, data protection, labour laws, and sector-specific regulations.

Tax Compliance: The introduction of the Goods and Services Tax (GST) has streamlined the indirect tax structure, replacing multiple taxes with a unified system. However, maintaining compliance with GST, including timely filing of returns and accurate tax calculations, remains a challenge. Additionally, channel partners must navigate Direct Tax regulations, including Income Tax and Transfer Pricing laws, which require meticulous financial planning and reporting.

Data Protection and Privacy: With the advent of the Personal Data Protection Bill, 2019, channel partners must ensure robust data protection mechanisms. Compliance with data localization requirements and safeguarding customer data privacy are critical.

Labour Laws: The regulatory framework governing labour laws in India includes provisions for employee benefits, working conditions, and contractual obligations. Compliance with the Industrial Relations Code, Wage Code, and Occupational Safety, Health and Working Conditions Code demands rigorous adherence to statutory norms, impacting operational flexibility.

Sector-Specific Regulations: Channel partners operating in specialized sectors such as IT, telecommunications, and financial services must comply with sector-specific regulations. For instance, IT service providers need to adhere to guidelines set by the Ministry of Electronics and Information Technology (MeitY) and the Telecom Regulatory Authority of India (TRAI).

While these regulations necessitate substantial investment in compliance infrastructure, enhancing credibility and trust among clients and stakeholders can provide a competitive edge. Moreover, the evolving regulatory framework drives innovation and best practices, contributing to long-term growth and sustainability.”

Highlighting the other regulations in India, Prashant Jain, Director, JNR Management Resources says, “Besides compliances on Direct & Indirect Taxes, there are innumerable complex requirements around FDI, Customs, Data Protection & Privacy, IPR, Labour Laws, Environmental Regulations and Sector Specific Regulations affecting industry and Channel. Partners must be agile enough to gain maximum knowledge and consider it as an immense imminent business opportunity of issued growth.”

While it is true that compliance is a complex process in India and it needs proper resources to handle it, it is also true that with automation and training meeting compliance requirements is possible. On this, Vijayakumar V, COO, Symmetrix Computer Systems says, “Compliance is a complex process in India and requires expert resources to handle. Though it is a challenge, once a process is defined and set, with basic automation and training of the team members, it is not difficult to meet the compliance requirements. The process defined and set should have periodic validation of data and documentation, to minimize the errors.

By being compliant, it is one of the strong points for us to position ourselves in the market. It also helps us to grow, as most of the Corporate Organizations insist on being compliant to complete the vendor registration process.”

On the other hand, Ronny Ferrao, COO, Essen Vision views, “The market is shifting from being product driven to service based. As customers shift from simple support for products to professional services and consulting, they are demanding that international standards and certifications are met. Many partners are taking on more than they can handle and not being able to secure the customer’s environments properly. These failures do not just endanger the customer but also the national infrastructure. While regulation can be cumbersome, it is a necessary evil so that only partners who have taken the time and effort to build a certified, experienced, and qualified team of security specialists will be allowed to operate, especially in critical security operations for India’s biggest companies. Many channel partners will not be able to keep up with such demands, but the growth potential for those who can is enormous.”

Margin Pressure

Doing business and making money in a competitive IT market like India is not easy. Partners face different kinds of pressure and one such is margin. In order to handle this, it is important for partners to strike a balance between competitive prices and healthy profits. On this Sushil Kumar Jain, Group CEO, Orbit Techsol says, “In India we often feel squeezed when it comes to making money. This happens because of things like pressure to lower prices, giving discounts, and competing with online stores. To manage this, we have to find a balance between offering competitive prices and keeping our profits healthy. Focusing on providing extra value or personalized service to customers, rather than just trying to compete on price alone.”

Reiterating the same, Harish Rai, Country Manager, Acceron Infosol states, “We face strong margin pressures from having to keep prices low, offer very high discounts, and face stiff competition. To stay profitable and competitive, we offer additional services, watch our costs closely, and offer a true value addition to our offerings.”

Echoing similar views, Priyadarshi Nanu Pany, CEO, CSM Technologies says, “In the rapidly evolving Indian market, channel partners are grappling with an array of challenges that threaten to erode their profit margins. Intense pricing pressure, rampant discounting practices, and the looming presence of online marketplaces have created a perfect storm, forcing these intermediaries to navigate choppy waters.

Pricing pressure is a constant thorn in the side of channel partners, as manufacturers and suppliers wield their bargaining power to dictate terms. 

This squeeze on margins is further worsened by the cutthroat competition among channel partners themselves, leading to a race to the bottom in terms of pricing. Discounting has become the norm, with partners slashing prices to undercut competitors and retain market share, often at the expense of profitability.

The rise of online marketplaces has added another layer of complexity to this intricate challenge. These digital platforms have disrupted traditional distribution channels, offering consumers a vast array of products at highly competitive prices. Channel partners face the daunting task of matching these alluring discounts while maintaining their relevance in an increasingly digital world.”

Cut-throat Competition

In a market like India where competition is intense, being a differentiator is important. Partners need to identify the factors that will provide an upper hand in the competition.

Prashant Jain of JNR Management Resources views, “Competition can be quite brutal if the focused product line is too common. Channel Partners need to transform into Solution Providers and work on niche technologies which brings rules out competition, gives them an early mover advantage, expand footprint in enterprise customers who will also come back to them for the run-of-the-mill products also.”
Resonating the same, Sushil Kumar Jain of Orbit Techsol says, “Competition among channel partners in India is tough. We all are trying hard to get customer's attention and business, which makes it challenging to be noticed. To set ourselves apart and win customers in such a crowded marketplace, we often have to get creative by focusing on offering unique products or services that others don't have. We emphasize excellent customer service and faster delivery times. Building strong relationships with customers is very important and we continue doing the same.”

As the Indian market is full of prospects, players are flocking in the market for the same opportunity. Also, they are getting the support of the OEMs without any legacy. Continuing on the same, Anirudh Shrotriya, Managing Director, Shro Systems highlights, “There is very intense competition in the market, there are far too many players now in the market for the same opportunity. The problem is compounded with newer players who are easily entering the market without any legacy or reputation but still getting support from the OEMs. At Shro Systems The main strategy to differentiate that we have adopted is first to be certified on many of the latest technologies and have more people certified on it. Second, strong 360-degree innovative marketing and branding of SHRO across mediums. Third, webinars and face-to-face customer events to bring out our story and narrative in front of a wide number of customers. At last, build a strong services practice which delights customers and helps them come back to us for more.”

It is important to differentiate in order to stay competitive and earn a good margin in the market. For this, partners need to differentiate business offerings with value additions. Ronny Ferrao of Essen Vision illustrates, “The practices of discounting and pricing pressure however have been very destructive for channel partners. The startup concepts of burn rates and customer acquisition cost have made some partners willing to take no margin or even a loss on products via free support and implementation, in the hopes of acquiring future business from distributors and OEMs or simply pricing out competition. Channel partners are in a race to the bottom. The only way to remain competitive while maintaining a healthy profit margin is to differentiate your business offerings with better trained and certified resources. This provides the OEMs and distributors with a value addition and allows channel partners to sell a range of products as they have the expertise on integrating and optimising these products. Customers are becoming more willing to pay a premium for professional services and increased safety. Channel partners who only sell products will be increasingly phased out regardless of how they price their offerings.”

Discussing the paradigm shift in the market, Priyadarshi Nanu Pany of CSM Technologies elaborates, “The competition among channel partners in India is intense, both within their own segments and from other players in the market. The rapid digital transformation and the shift towards customer-centric business models have significantly raised the stakes.

Channel partners in India face competition from a variety of sources. Traditional resellers are now evolving into value-added resellers, offering not just products but comprehensive solutions that include services and support. Distributors are becoming marketplace orchestrators, leveraging their local expertise to create new opportunities and expand into untapped markets. This shift has led to a crowded marketplace where standing out requires more than just competitive pricing.”

Talking about the competition in the cybersecurity market, Harish Rai of Acceron Infosol reveals, “Competition in the cybersecurity and IoT markets is quite tough, with many players and rapidly changing technology. To stand out, we focus on great customer service, constantly update our product offerings, specialize in niche markets, and invest in building a strong Customer Service Tool and resource to retain customers.”

Managing Profitability

For every single channel partner, profitability is important and considering the market situation, achieving it is a difficult task. To attain it, the partners need to follow few strategies and explain it Sanjiv Krishen, Founder CMD, Iris Global Services reveals, “To manage profitability while staying competitive, channel partners can employ several strategies:

Value-added Services: Offer additional services or bundled solutions that differentiate your offerings from competitors and justify premium pricing. This could include after-sales support, installation services, training, or customization.

Efficiency Improvements: Streamline operations and supply chain processes to reduce costs and improve efficiency. This may involve optimizing inventory management, negotiating better terms with suppliers, or investing in technology to automate tasks.

Strategic Pricing: Instead of engaging in price wars, focus on value-based pricing strategies. Highlight the unique value proposition of your products or services and communicate this effectively to customers, enabling you to maintain higher price points.

Customer Segmentation: Identify high-value customer segments and tailor your offerings and pricing strategies to meet their specific needs. This allows you to capture more value from customers who are willing to pay a premium for your products or services.

Partnerships and Alliances: Collaborate with other businesses, such as complementary product providers or service providers, to create bundled offerings or cross-promotional opportunities. This can help expand your customer base and increase sales without compromising on margins.

Investment in Digital Presence: Enhance your online presence through e-commerce platforms, social media, and digital marketing to reach a broader audience and compete effectively with online marketplaces. Invest in customer engagement strategies to build loyalty and repeat business.

By implementing these strategies, channel partners can navigate margin pressures effectively, maintain profitability, and sustain competitiveness in the dynamic market landscape of India.”

In a competitive market, apart from value added services, customer relationships and customer experience play a crucial part in business.  

Anirudh Shrotriya, Managing Director, Shro Systems views, “The business has become fiercely competitive in nature and margins are under a lot of pressure, we see far too many competitions for any given opportunity in the market nowadays. But with strong customer relationships that we have built over the years and steering away from commodity products and focusing on solutions we have been able to counter this issue to a large extent. The OEMs have revised their backend rebates and made it harder to earn money in today’s times which is a challenge. But with Shro Managed Services, contractual XaaS and latest tech positioning in the marketplace are some of the things which are margin positive for us at Shro. Another point is that we are always not about profit, we want to create a great customer experience and sell more sustainable solutions with a focus on giving back to society which also gives great pleasure.”

Online marketplace has hampered the businesses of channel partners to a large extent. By providing after sales services and making customers understand the process of procuring supplies partners are gaining confidence of customers which helps them to stay profitable.  

Vijayakumar V of Symmetrix Computer Systems says, “Online business is one of the major challenges for the Channel Partners due to the pricing. We overcome such challenges to a major extent with our assurance to our customers for after sales service, and by explaining our process of sourcing supplies through the proper channel, while meeting the compliance requirements. Though the margins have reduced in the recent years, by winning the confidence of the customers with our set process, we grow and sustain.”
The most important survival strategy in this market is to position yourself differently amongst competition. Failing to add value to products and services will cost businesses to partners. Also, building relationships is crucial to retain business. So, in this fiercely competitive market, partners are scouting for innovative ways to keep themselves profitable otherwise they have to be out of the race.