Inside the Channel

Chalk one up for the little guy

VARs have long complained about LARs (large account resellers) swooping in and eating their lunch--and about vendors that encourage it. LARs often aren't local and can't add as much value as a local VAR could, but nonetheless take the deal--and leave the crumbs for the local VARs, who they sometimes ask to fulfill some of the local service requirements.

Isn't it time for the little guy to have an equal shot at some of these big, local deals? Apparently, Microsoft thinks so. Just a week after Microsoft announced its plans to open up its own retail shops, the company further shook up the channel with a new plan to reduce funding to direct marketers and large account resellers, and place VARs on an equal footing, according to a report this week on ChannelWeb. the deal would reportedly give VARs equal status to the bigger players on deals of more than 250 seats. Cutting direct marketing incentives obviously is part of the company's strategy of opening their own shops; and Microsoft may be looking at putting their channel money where it will do the most good.

Naturally, the LARs didn't like it, and direct marketers and retailers are going to have to start broadening their scope to survive. The fundamental difference between the huge contractors and the local or regional VARs though, is that the big guys focus on fulfilling demand--bidding competitively on large contracts when they come up--but don't do as much in actually driving the demand. Smaller VARs, since they are more in touch with their customer base and communities, are better at actually driving demand. It makes sense for vendors like Microsoft to push a little more onto the VARs' plates.

And when it comes right down to it, the advantages that have historically been pushed towards the LARs really aren't fair to everyone else, and really don't do that much for the vendor. Microsoft in particular has always given the LARs a little bit extra on their plates. Now that's going to stop, and it's about time.

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