3Com Slashes Top Partner Ranks In Half

3Com has dramatically raised the volume requirements of its Focus Partner Program in a strategy shift that blindsided many of its top solution providers, some of whom say they now are looking for alternate vendor partnerships.

Effective Sept. 1, 3Com's annual sales volume requirement for Gold partners ballooned to $1 million, up from $250,000. 3Com also boosted the volume requirement for its Silver partners to $250,000, up from $100,000. Bronze partners continue to have no volume requirement.

In the United States, the new volume requirements halved the ranks of the program's top tiers to 70 Gold and 100 Silver partners.

Of even more concern to some partners are the changes in warranty and maintenance services. In some cases, partners will have to tack on 3Com's Express hardware replacement services in order to get next-day replacements, previously available for free to Gold partners.

"It's unfortunate that a [company like] 3Com can't be loyal to the people who are loyal to them," said John Graven, COO of Computer Telephony Concepts, a 3Com IP telephony partner in Mentor, Ohio.If the solution provider can't reinstate its Gold-level status, Graven expects the designation and warranty changes to cut its margins by 10 percent to 15 percent. Graven, who prior to the changes considered himself a loyal 3Com partner, said he is now looking to bring on new product lines.

Other solution providers who requested anonymity said they also are seriously considering alternatives as a result of 3Com's new terms.

Several Gold 3Com partners said they were first notified of their retroactive demotions to Silver status via a letter delivered through the U.S. Postal Service. The partners' letters, signed by 3Com Vice President of Americas Channel Sales Nick Tidd, were dated Sept. 8, according to a documents viewed by CRN.

Partners have the opportunity to return retroactively to their Gold status with 3Com if they attain 75 percent of the new $250,000 quarterly Gold revenue requirement during the September-to-November period, according to the document.

"I don't see much positive coming out of it for the average dealer," said Michael LeBlanc, president of LeBlanc Communications, a solution provider in Trumbull, Conn.One solution provider who requested anonymity said about 80 3Com partners have mounted an e-mail campaign protesting the changes to Tidd and 3Com President and CEO Bruce Claflin.

But not all solution providers bashed the vendor's efforts.

"I'm hoping that trimming down the number of Gold dealers will allow us to get even more bites of the apple and have more exposure within 3Com," said Glenn Conley, president and CEO of Metropark Communications, a Gold partner in St. Louis that retained its status. Under the old terms, the distinction between Gold and Silver partners was too small, Conley said.

Some partners also lauded the addition of a formal MDF program that partners can use to finance marketing efforts or to purchase 3Com's Express replacement services.

Tidd conceded that 3Com could have more effectively communicated the changes. The vendor tried to notify all Gold and Silver partners both through their channel account managers and via the letter, he said.Tidd also said the changes are just the first step to refresh 3Com's partner program. "They are based today on volume. That is not the desired state, nor will it be the sole measurement later on in our fiscal year."

The changes, in part, come as a result of 3Com's efforts to attract higher-end partners as it attempts to re-enter the enterprise market, a bid current partners said is achieving mixed success.