By Contributing Columnist, Robert FitzPatrick Creo has had a controversial and conflicted past in the critical area of channel relations. As technologies, such as CtP, gain wider acceptance, competition rises and margins fall. This cycle inevitably places pressure on direct sales organizations to lower sales costs through alliances with third-party channels. Additionally, in the graphic arts field, direct sales vendors of digital pre-press equipment eventually confront the long established pattern of printers using their consumables purchases to subsidize hardware purchases. The bundling of these two products sectors has made graphic arts distributors indispensable players in the equipment field. This fact drew supplies manufacturers AGFA and Fuji into the hardware business. It has led Heidelberg to attempt entering the supplies business. It led to the demise of Linotype. And it has drawn Kodak Polychrome Graphics into alliances with equipment companies such as Creo and more recently Screen. Though new equipment often drives supplies sales, supplies sales largely pay for equipment. So, without a relationship with a supplies vendor, it becomes increasingly difficult for an equipment vendor to cut a deal with customers Yet, when Creo acquired a sector of Scitex, it terminated some of the dealer sales relationships it inherited, creating deep and long-term mistrust of Creo by many independent dealers. Similarly, Creo’s relationships with Heidelberg soured causing Heidelberg to develop competitive relationships with Screen. Kodak Polychrome Graphics has moved in the same direction away from Creo. More recently, Creo has developed new ties with companies such as Spectratech and Western Lithotech (now owned by Lastra). Successful partnering of hardware manufacturers with supplies dealers and manufactures requires a strong commitment to a longer-term and mutually profitable relationship. Seizing short-term sales opportunities at the expense of the channel partner can derail the entire relationship. The direct sales force must be trained to view the channel relationship as an asset, not a competitor. And the partner must be seen as an integral part of the sales strategy, not a source only of "incremental" business. Creo’s checkered past with channel relationships indicates these are skills and lessons it has not yet learned or felt it needed to. Robert L. FitzPatrick (robertf765@ aol.com, 704/334-2047) is president of FitzPatrick Management Inc. He produces The Eagle, a quarterly journal covering the digital-imaging distribution business. - - - Creo Responds: Since Creo acquired the prepress assets of Scitex in April 2000, Creo has gradually realigned our sales distribution alignment and partnerships to more efficiently meet the needs of our customers and target market segments. We do not view this evolution as controversial or conflicted as constant change has been a part of the entire industry. Creo continues to have strong, positive relationships with more than 50 distributors, dealers and resellers serving the printing, publishing, graphic arts and communications markets throughout North America. Creo has established a well-balanced, flexible and scaleable sales distribution methodology that is focused on one thing only –how our customers want to do business. We have a master sales channel for direct sales reaching a dozen markets and product segments throughout North America. We also have channel sales partnerships with Xerox, Komori, KBA, Printcafe, Kodak Polychrome Graphics, DuPont, Western Litho and Spectratech—among many other companies. We also have a dedicated support infrastructure of inside sales, sales telecommunications, catalog, E-business, support, and customer care and service business units that anchor all of the above. Our customers tell us how they want to do business –and we are positioned to deliver in any manner they desire.