Select vendors have laid out financial support packages for partners in response to widespread criticism that the channel was being abandoned by superficial Covid-19 relief efforts.
Following off-the-record briefings with more than 80 partners across the region, the majority of vendors have been slammed for being “missing in action” as economic realities start to bite, with global headquarters too slow to respond to on-the-ground market concerns.
On the flip side, some vendors have been criticised for moving too far in the other direction, spamming the market with information overload yet offering nothing more than “surface-level” incentives which lack real commercial substance.
In response, the delivery of financial aid unanimously tops the list of partner requests, followed by shifting all end-user business through the channel and offering increased programmatic flexibility.
While multiple vendors have issued support packages, below is a highlighted summary of responses to the specific question of: If an end-customer can’t pay due to Covid-19, how are you protecting your channel?
Channel Asia sent the same question to a select group of 10 tier-1 vendors, receiving an official response from only four - Dell Technologies, Cisco, Hewlett Packard Enterprise (HPE) and SAP.
Microsoft and IBM declined to comment, while no response was received from Amazon Web Services, Google Cloud, HP and VMware at the time of publication.
In response to escalating channel concern, Tian Beng Ng - senior vice president and general manager of Channel across Asia Pacific and Japan at Dell Technologies - acknowledged that financial support and capital are of “utmost importance” to partners during such a period of market uncertainty.
“We have taken actions to provide immediate financial relief, while helping our partners to develop competencies for the future,” said Tian Beng, when speaking to Channel Asia. “At Dell Technologies, we value our partners and hence we have stepped up our efforts to support through the evolving challenges presented by Covid-19.
“The financial relief package will enable our partner community to address their financing and cash flow difficulties and empower our partners to support their end customers.”
Effective immediately, Dell is providing a one-time cash payout for up to 50 per cent of current partner MDF balances for use towards future marketing activities, with the aim of providing immediate payment up front to ease cash flow concerns. Applications are now open and run until June 20.
“Partners with an approved plan can immediately claim and receive payment prior to execution of marketing activities,” Tian Beng added. “This will provide partners the time value of money, additional flexibility and assistance with cash flow now.”
For metal tier partners - spanning Titanium, Platinum and Gold - the vendor is offering fee-waived services deployment training for Unity XT, VxRail and DP4400 products, running until May 31.
“We know that customers need technology right now to succeed in remote working but many organisations also need flexible repayment terms,” Tian Beng explained. “Our partners may also need help managing cash flow or end-user credit risk as they try to serve their customers and help their employees remain productive as part of their business continuity plan during this time."
The vendor is also directing the channel towards its Working Capital Solutions (WCS) program, which currently supports more than 1500 partners across 74 countries, alongside complementing Dell Financial Services (DFS) offerings in select Asia Pacific and Japan countries.
“Partners whose end customers use DFS get paid as quickly as two days, and if they’re using WCS, in most scenarios partners who qualify can benefit from 60 to 90 days payment terms extension to pay their financing vendor,” Tian Beng said.
In mid-April, Cisco rolled out a new round of support incentives to help partners and customers overcome rising Covid-19 challenges, with US$2.5 billion in financing at the centrepiece.
Delivered through Cisco Capital - the vendor’s financial division - the Business Resiliency program is designed to mitigate cash flow concerns in the channel through “payment holiday” schemes and customer deferral options.
Backed by increased access to technology and support, the initiative targets an ecosystem of more than 60,000 partners globally, with all Cisco solutions - spanning hardware, software and services - confirmed as eligible.
“As the current global situation unfolds, we are working to help our partners and customers maintain productivity and business continuity,” a Cisco spokesperson told Channel Asia. “Cisco Capital has a broad base of payment solutions to support our partners providing Cisco solutions to their customers and to help them manage short-term cash flow or liquidity concerns.
“We continue to monitor the situation as well as review partner and customer requests in order to help them succeed and thrive. For 23 years, Cisco Capital continues to provide financing solutions - from leases and loans to consumption, subscription and more - to unlock opportunities to help our partners and customers perform and transform.”
Similar to Dell and Cisco, HPE recently designated more than $2 billion in financing to help customers and partners overcome cash flow and liquidity challenges related to Covid-19, forming part of a global stimulus package.
Delivered through the vendor’s financial services division - HPE Financial Services - the Payment Relief Program is designed to help customers acquire new technology while alleviating financial strain, through deferred payment plans and buy-back initiatives.
“HPE is committed to helping communities, customers and partners during this time of global uncertainty,” a spokesperson for HPE told Channel Asia. “Above all, we are ensuring business continuity and secure, productive operations with plans in place to minimise disruption.
“Through our HPE Financial Services business, we’ve designed a number of initiatives that make it easy for our partners and customers to navigate unforeseen financial challenges and tightening budgets during this time."
According to HPE, such initiatives centre around flexible payment and pricing policies with the aim of protecting the vendor's channel and partners during the pandemic.
“Our rebate terms for channel also pay out from the first dollar, as they have done for the last year and a half so that our partners are able to plan their investments with predictability," the spokesperson added. "And we pay some of the highest rebates in the industry."
HPE is also currently offering a payment deferral program allowing customers to acquire technology now and pay later through a 90-day delayed payment structure. This is available on new technology purchases as low as $5000 and eligible on the vendor's hardware and select software, software appliances, services and installation packages.
This is in addition to the implementation of a 2020 Payment Relief Program enabling customers to acquire HPE technology today with reduced payment for the remainder of 2020. According to HPE, this means customers pay just one per cent of the total contract value each month for the first eight months, which defers 90 per cent of the cost until 2021.
“HPE Financial Services also offers customers a phased deployment program with the ability to acquire compute and storage capacity now with the flexibility to configure, test, and stand up systems before paying,” the spokesperson added. “Under this program, customers can continue essential business without the restraints that the current crisis can have on their budget cycles or implementation timelines."
In early April, SAP extended a hand to partners struggling to stay afloat during the coronavirus pandemic with tweaks to its partner program.
“Covid-19 has thrown the world in uncharted territory and SAP promises to always stand alongside its customers’ and partners’ business,” a spokesperson for SAP told Channel Asia.
To help the more than 21,000 providers globally, SAP has ensured the channel is partner program level protected from downgrade until further notice, as a starting point. Specific to MDF, more flexibility in fund usage has also been made available, with the expiration date extended from 31 October 31 to 18 December 2020.
This is in addition to rolling out an "open door policy" at the software giant; "if a partner business is facing serious constraints SAP partner managers are available to help find solutions."
From an SAP Learning Hub standpoint, subsidies are available for virtual learning and certification, while 20 hours of free S/4HANA consultant training is also available to partners.
"SAP has set up a special community where partners can promote their free software offers via SAP channels," the spokesperson added. "In addition, SAP provides free access to select SAP software to help support businesses and address the global challenges related to the fight against the repercussions of this pandemic."
To assess the most mission-critical challenges facing partners in relation to Covid-19, visit part-one - Partners to vendors: Time to step up on Covid-19. Meanwhile, to understand the key partner requirements needed from vendors to ensure long-term channel stability, visit part-two - Partners to vendors: How to help during Covid-19.