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Customers are putting more and more pressure on VARs and SIs to get better prices on product. The margin squeeze just keeps getting stronger. Ironically, one of the best ways out of the margin trap is to get the customer to want to pay you more. Juniper has released a white paper on just this subject, complete with a number of consulting and development ideas that other partners have successfully sold to eager customers.

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In my previous blog posts (Part 1 and Part 2) I described how, paradoxically, increased functionality is leading to greater commoditization, and that this can be explained by the Consumption Gap: technology companies are adding functionality faster than our customers are able to absorb it.  Rather than trying to understand how all these new features could benefit them, they simply throw their hands up, decide all products are equal and choose on price.  The solution lies in services: the job of the VAR or Systems Integrator is changing from providing product to counseling the customer and creating great results. Read more to find out what Bob Dylan would have said about it.

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In my last blog I introduced the paradoxical idea that adding features and functions to networking products is actually driving them towards commoditization, rather than differentiation. This sounds like a contradiction: shouldn’t more functionality equal greater value to the customer, which should lead to better prices (or, at the very least, less discounting)? Technology is driving down costs, and customers expect to reap the benefits of that in their capital expenditure costs. But even powerful new features and functions don’t always command the price premiums they used to.  Here is why . . .

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The traditional set-up of vendors providing product, channels implementing, and support being split between them is not going to be enough in the future, because the market is changing in a number of ways.  Here is why we all have to think beyond what we have always done: customers are demanding more turnkey implementations, they are insisting on more personalized support, and they are expecting ever greater creativity from suppliers to not just fulfill their needs, but to anticipate them.  This has lots of implications . . .

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I have almost recovered from the jet lag associated with attending Juniper’s Global Partner Conference in Las Vegas and immediately returning home to Europe. This means I finally feel able to reflect upon some of the things that I heard, saw and said at the Partner Conference last week. Reflections as seen in the mirror of services, of course, because I am in charge of services marketing for Juniper in EMEA.

 

With 1,500 attendees from around the world, of which more than two-thirds were Juniper partners, presentations from almost all of the top management at Juniper and breakouts by region and on specific subjects there was much to take in.  In particular there was an eye-opening and somewhat frightening – presentation by Kevin Mitnick, a reformed hacker. And the final keynote by consultant Scott McKain that warmed my heart, not because of the nice stories (although they were very nice), but because of the message: Customer Service is the key to long term success. Your customers will buy from you once based on product and price, but will come back time after time if you treat them with respect, care and personal concern.  And all three of those come from a good, solid services organisation.

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