How Vendors Are Supporting Partners with COVID-19 Relief

A growing number of IT vendors are offering COVID-19 relief measures to help support partner businesses during the pandemic. With the coronavirus placing extraordinary pressure and uncertainty on the channel, vendors are stepping with initiatives to help. Those include offering financial incentives, extending certifications or providing free training during this period.

Canalys’ Alastair Edwards

“As we move into the period of much greater uncertainty around demand, we expect to see much greater emphasis on financial support – adjusted targets, simplified incentives, extended payment terms, low-cost financing – to help with intensifying cashflow pressures,” said Alastair Edwards, chief analyst at Canalys.

Last week, for example, HP announced a more predicable flat-rate incentive program for partners. In addition, the tech giant relaxed compensation models for those needing COVID-19 relief. Elsewhere, Lenovo unveiled a new partner stimulus package for the channel. And Microsoft revealed a series of adjustments to the Microsoft Partner Network in response to partner feedback.

Meanwhile, Kaseya said it is investing $10.5 million to help customers through COVID-19. The MSP software vendor launched its Kaseya Care programme, which includes helping partners secure money from government relief programs. It also includes business coaching and consulting to help acquire, retain and service customers during the pandemic. Partners can get direct financial assistance from Kaseya, too.

“Our partners are facing many of the same challenges as most businesses around the world – the health and safety of their workers, trying to avoid layoffs and still pay salaries [and] benefits, customer attrition due to global cost-cutting measures, and much more,” said Kaseya CEO Fred Voccola. “On top of that, MSPs must now play a more critical role than ever before in helping their customers maintain IT operations in order to stay in business and to do so with proper security measures in place so that their customers aren’t exposed to heightened cybersecurity risks during this volatile time.”

Distribution Playing a Part in COVID-19 Relief

However, Edwards noted that distribution has been faster at providing extended credit to the channel. Distributors play a key role in providing financial support to the channel. One of the first to announce assistance for partners in the U.K. was Exclusive Networks, which launched a partner support package. It aims “to assist efforts to continue business on a sustainable basis.”

“Extraordinary times call for extraordinary actions and we’re doing everything we can to support our partners through these tough trading conditions,” said Barrie Desmond, SVP, marketing and communications at Exclusive Networks.

“The launch of our partner support package provides partners with assistance to alleviate supply chain pressure, access supplementary technical support capacity, consolidation of multiple vendor solutions and offers, and advice on finance and currency volatility to support them through tough trading conditions ahead … Keeping the lights on now and preparing to sustain partner businesses during this crazy time is critical, so we’re offering any assistance we can in terms of business continuity and stability.”

Tech Data’s David Watts

Elsewhere, Tech Data has said it will work closely with its customers to determine the right credit and payment solutions.

“The ability of IT distributors to provide channel partners with financial support is more important than ever to enable them to maintain their product supply and serve their customers,” said David Watts, regional VP, U.K. & Ireland at Tech Data.

“Having seen an increase in support requests relating to credit, Tech Data currently extends over £1.8 billion of credit to …

… the U.K. channel, and through its trusted partners can offer leasing, loans and financing solutions to ease the burden on cash flow. Additionally, continuous review of credit and finance offerings and credit lines will facilitate the flow of business for valued partners.”

How Can Vendors Further Support Partners?

Canalys has several recommendations for how vendors can help partners with COVID-19 relief through the imminent slowdown.

“During the 2008-2009 financial crisis, vendors that quickly adjusted partner incentive schemes and extended financial support to the channel tended to see the greatest stability in their channel ecosystem following the crisis,” it noted.

It said vendors should establish regular communication with as many partners as possible through virtual and digital platforms. They should also quickly establish digital events with their top partners and maintain a two-way flow of information. Think such things as partner advisory boards to replace face-to-face meetings

Vendors should also be flexible in planning and targeting, it said. They will have to abandon many quarterly business reviews and other planning sessions for the time being. Therefore, targets should reflect a lower demand environment and limitations to product availability.

“These will be short-term measures. Postponed deals can be expected to return by the end of the year, and partners will remember those vendors who offered the most flexibility and support,” it said.

The analyst also advised removing short-term sales targets and moving to linear rebate payments. Removing complex and admin-heavy processes for other areas, like MDF, will also help partners through a challenging period. Extending certification requirements is another example.

Elsewhere, vendors can use their financing divisions to provide more low-interest or 0% financing offers to partners and extend payment terms for the channel. In addition, sharing sales and technical headcount resources with their key partners can help with business continuity in the channel. Finally, Canalys said vendors should extend free usage rights to partners, as well as customers, for specific software or cloud-based technologies, supported by online demo and PoC tools.

Unchartered Territory

Expect more aggressive COVID-19 relief from the big vendors as risk to the channel’s financial health intensifies, Edwards said. And while efforts will be concentrated on large partners, midmarket and smaller partners face the most immediate threat.

Nevertheless, Exclusive Networks’ Desmond believes the true nature of the channel will come through as it enters uncharted territory.

“Despite the severity, uncertainty and rapidly changing nature of the situation, the willingness of our people to adapt and maintain service and support, in close harmony with our vendors and channel partners, is a great testament to …

… the spirit, camaraderie, resolve and resilience in the channel.”

Roundup: Vendors Leap Into Action

Channel Futures surveyed vendors from across IT to learn what they are doing to help support partners with COVID-19 relief.