Guest Column | February 24, 2009

The Secret Sauce of Channel Success


Written by: Adam Famularo is senior VP and GM for CA's recovery management and data modeling business unit

Great technology that is easy to implement, manage, and use is a prerequisite for any vendor to be successful in the SMB market — but it’s not all that’s required. The other major ingredient is great partners. And for partners to succeed with great technology, they must be provided with the programs, pricing, and support that give them a competitive advantage and enable them to meet the needs of their SMB customers.

In keeping with these market realities, vendors need to dedicate resources within their business to develop, market, sell, and support their volume products for SMBs in a channel-only sales model. That’s right, 100% channel. Too many vendors are looking for ways to take revenue and customer relationships away from partners instead of investing in those partners and providing them with the tools and resources to be successful.

With dedicated business resources, vendors can do two important things to create a ‘win-win’ scenario for their business and their partners. First, they can marshal all the resources necessary to stay on top of market need and continue to deliver state-of-the-art, quality software solutions. Second, they can customize their partner program to best support partners selling their SMB solutions.

Putting The Best Software In Your Partner’s Hands
Since your partners’ success starts by you offering them the best solutions for SMB customer needs, job one is to ensure you are in step with evolving customer requirements and deliver timely, well-tested upgrades to our software. It’s no secret that today’s leading product can quickly become tomorrow’s ‘has-been’ if the vendor doesn’t relentlessly enhance its capabilities to best address the most pressing customer needs. It can also lose traction if the vendor doesn’t make sure new releases are of the highest quality.

That’s why dedicated product management, marketing, and engineering teams should plan and deliver new releases of SMB software that add value and pass muster with independent labs, partners, industry experts, and customers. That’s how to keep sales growing in competitive markets and reinvigorate sales of products that are losing their competitive edge.

It is also important to develop comprehensive solutions that include the full spectrum of functionality needed to meet customer requirements. All components within a solution need to work together and be easily managed in order to simplify administration for limited IT staff. For instance, in the area of recovery management, a vendor should offer complete data protection, business continuity, and continuous application availability — all critical to today’s storage administrators and disaster recovery planners.

What A VAR Needs, What A VAR Wants
So, what should a VAR expect from vendor partners? As mentioned, it starts with great software that helps meet key customer business challenges. Then, in today’s challenging global economy, and the resulting budget constraints at nearly all businesses, resellers must demonstrate how they can deliver a fast ROI to their customers– typically within about a year’s time.

Next, pricing must be simple, flexible, and easy for both the VAR and their customers to understand. Product suites must offer significant value and price breaks for customers making larger product investments. A combination of aggressive sales promotion incentive funds (SPIFs), rebates, and high margins tied to deal registration, new business, and maintenance renewals gives resellers the right incentives and payback for doing business with a vendor.

Here’s the important thing: Vendors can’t just dangle short-lived promotions that meet these criteria, they need to build a long-term program that allows VARs to have a sense of how much revenue they can make during the year. How else can they tie their business plan to a vendor?

Finally, the vendor’s partner program should be designed to offer VARs a low upfront investment with strong returns. For instance, managed services and Software as a Service (SaaS) solutions offer resellers the potential of a regular revenue stream with little or no upfront capital investment. This needs to be part of a vendor’s product mix.

Work With, Not Against Your Partners
Most vendors talk the channel friendly talk. But to walk the walk, you have to put yourself in the partners’ place and ask yourself a few questions:
  • “Is my pricing scheme competitive and easy to configure?”
  • “If a partner does a good amount of business with us, can they depend on us to connect them with experts when they are supporting customers before or after the sale?”
  • “Is my program designed to maximize partner profits?”
  • “Is my program designed to help drive service engagements so the partner can add value with their customers?”
When you ask these questions while you build, or update, your channel partner program, the result will be positive partner feedback, more business through your partners and, in some cases, less business for your competitors. Why? Because some of your competitors are asking different questions, such as: “How can I take these partner accounts direct?” Partners are running a business and can’t afford to bet their future on vendors that aren’t committed to them and to their customers. After all, their SMB customers are relying on your partners to meet critical business needs.

So, if you haven’t taken a look at your partner program, lately, it might be the time. It will benefit both you and your partners in the long run.

Adam Famularo is senior VP and GM for CA’s recovery management and data modeling business unit, responsible for the team that develops, markets, and works with channel partners to sell and support CA’s ARCserve, XOsoft and ERwin products in a channel-only model.