Opinion

Is Vodafone dialling up a channel extension?

Vodafone's efforts to build an IT channel have floundered so it appears to be going for the next best option - to acquire its own networking integrator.

In the past month the telco behemoth has been liked with several firms including the reseller operation at Daisy Communications and DiData.

Fixed and mobile communications are converging and Vodafone is trying to buy up some fixed line competency.

Its historic involvement with the channel has been chequered; it employed Mark Whitby - now Seagate's European president- to develop global channel programmes for IT resellers but things never really took off.

"Vodafone put some money into the channel but it didn't see the returns on a short term basis and gave up," said one reseller source.

Activating contracts was considered long winded and complicated and many laughed when Vodafone reduced the process steps to nine, not three or four.

The sales model is another issue for IT resellers; giving away hardware with the tariffs was and to a large extent still is alien to IT firms, costly finance experts are required to help with this.

Any deal over a certain number of seats is also taken direct so resellers said they found it difficult to compete with the network operators and were confined to sell in the SME market.

Blackberry and O2 are certainly making strides to overcome these issues and are placing a lot of investment in the IT channel to help resellers build up specific teams but even these companies offer commission only on new business.

"You need two operators to make money," said one channel source.

With a growing number of notebooks and netbooks sold with connectivity, the channel is slowly responding. Sadly for Vodafone, as things stand now it will not be in line to benefit when those sales agents truly get to grips with the model.

This was first published in May 2010

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