Gamma's direct selling has left 'sour taste in partners' mouths' - Exponential-e

Exponential-e has slammed rival Gamma for competing with its partners since going public.

The networking specialist claims to have taken advantage of partner frustrations with its competitor since it listed on the AIM market in 2014, according to its head of channel.

Alp Kostem told CRN that Gamma has been going direct more since its listing, which has sowed seeds of discontent in its partner base.

"We have a direct sales force but we're honest about it and have processes and procedures on managing conflict and how we segregate salesforces," he said.

"Whereas Gamma has gone about it differently, which has led to a sour taste in some of their smaller partners' mouths in terms of the way they feel they're being treated."

Konstem claimed that as Exponential-e has been investing heavily in public sector and enterprise, it rarely comes up against its partners and when it does, both parties are offering different solutions for the respective tender - which is a different story to what he claimed Gamma partners are experiencing.

"Gamma is competing directly, which has led to disillusionment among partners and we have picked up some of that business that we haven't had before," he stated.

"No partner ever defects fully because strong relationships are always in play but we definitely picked up business we wouldn't have picked up [because of how Gamma has acted].

"If vendor partners don't run an operation that is transparent and clear, partners don't like it and won't deal with them."

Exponential-e plays in both the vendor and MSP spaces, with the channel boss stating that each space is defined by the type of solutions it sells.

"We see ourselves in certain aspects of our product portfolio as an actual provider; in some instances we are a vendor-reseller and in other cases, we are an MSP," he explained.

"Five years ago I would have said we were more in the vendor side, but the product mix we sell on an annualised basis is moving closer to a traditional MSP-type service through the channel."

The company recently filed its fiscal year ending 31 January 2019, with revenues rising 13 per cent to £130m, of which Kostem said 45 per cent comes from channel sales.

The channel head stressed that this growth was organic and that M&A doesn't play a part in its strategy, but rather that certain elements of its portfolio are in high demand.

Cloud and the public sector are currently the fastest-growing sides of the business, according to Kostem, but security may well outpace them this year.

"I think the demand for security has shot up because our security operations centre (SOC) is fully operational now," he explained.

"I think there is a pent-up demand because most of our channel partners are buying and so educating and putting something in front of them that they can easily resell to their partner base [is driving demand].

"In essence, it's quite an easy upsell. The fact is we have a lot of product in the ground; we have a lot of wide area networks, partners and end users so it's a lot easier to sell into those customers who have experience of using our partners and us combined."

The networking provider is also experiencing "unprecedented" demand for SD-WAN, with Kostem stating that it has deployed its own software on seven big projects, and has been a part of 50 more.

"It is still not a mature product," he said.

"I am a great believer in horses for courses - in certain industries there is no need for this technology, but for others - retail, construction - there is a real need and it brings lots of benefits.

"Sometimes when we come into the selling point we are supplying the WAN so understanding what the end customer is trying to achieve doesn't always dictate an SD-WAN solution.

"There is a perception in the marketplace of it being more competitive in terms of price instead of the traditional multi-protocol label switching (MPLS)…but it will be cost-neutral in month 40 of a deal so there's not much in the way of cost benefits.

"The way to come at it is the benefits it brings to the day-to-day running - it has lots of efficiency savings to be made there."

source channelweb

Industry: Telecommunications News