Vendors wrestle for shrinking sales


Vendors wrestle for shrinking sales

Microscope contributor

One of the growing features of the downturn is an increased determination by vendors to wrestle market share from their rivals.

If the market is not growing, then the next step to keep the revenues coming in is to take share away from competitors. Nearly all vendor CEOs will state growing their stake of the market as a priority this year, but a few are going slightly further than just talking about it.

In the past couple of weeks two examples spring to mind illustrating how the rules of the game have changed.

NetApp sparks alternatives

The first was the reaction by rivals to the announcement by NetApp that it was making changes to its SME line in its product portfolio by immediately putting themselves in the shop window as alternatives.

Following the revelation that NetApp was canning its S series products, rivals including Overland Storage and Compellent were vocal about the damage to the channel caused by the changes.

David Spate, sales director, Northern EMEA at Overland, said at the time, “Given the tough economic climate we are now facing, it is quite frankly stunning that NetApp would want to effectively disenfranchise its customer base by discontinuing this range.”

He went on to promote Overland’s alternatives and reassure customers and resellers that the firm would not take a similar course of action.

Julie Parrish, vice president of worldwide channel sales at NetApp, went through the rationale behind the changes and talked up its mid-market range, but for some resellers the seeds of doubt will have been sown.
Then last week NetSuite launched a “Sage switch” campaign to tempt away its rival’s users with offers of discounts and free support.

The decision to launch the campaign was related to apparent problems that Sage had suffered with the beta version of its online services.

Sage hits back

Understandably Sage hit back, pointing out that it was important to develop new services and it was confident that its online proposition would be solid.

“We continually innovate and have recently established Sage Online, a new division within our UK business, to focus on providing software and services over the internet,” said Simon Black, managing director of Sage Online.

Of course, with the NetSuite campaign running until the end of June, some damage will be caused to Sage. As one source at Sage pointed out, these sorts of aggressive marketing initiatives seem to be on the rise and are happening across different market sectors.

For the resellers stuck in the middle the noise made by vendors will only help to create customer confusion and could potentially undermine both sides of the argument. But with the recession continuing to highlight the battle for market share, more campaigns and poaching tactics are bound to be deployed.

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