The channel operates through a web of relationships among resellers, distributors, and vendors. These relationships provide access to products, marketing, and training plus a range of incentives and qualifications that mould the way business is done. The basics have changed little over the past several decades; vendors go direct to resellers or use a distributor as a proxy, establishing contracts for delivery of goods, providing a consistent marketing message, and incentivising sales of their products.
Developments in technology and in business conditions are now putting pressure upon these relationships, as vendors attempt to move complex new products to the market over a smaller period of time, and take advantage of evolving communications and analytic technologies to ensure marketplace success. Resellers speak to the customers and know their business, so relationships are becoming more collaborative. Convergence and Cloud IT are bringing technologies together that had never been linked before, and the need to work with a range of experts on a single sale is now commonplace. It is against this backdrop that we are looking at the different ways that vendors and distributors work with their partners to create a mutually profitable result.
Partnership programmes have always been critical to the channel, and continue to play an important role in how new products are brought to market, in training of resellers, and in incentivising both development of expertise and development of sales. As these programmes are refined to enable greater interaction, ease access, and support deeper partnerships across the industry, new opportunities are likely to emerge.
"The partnership programme is important to SAP," says Colleen McArthur, NZ Partner sales manager of the global software giant. "Our goal is to double the size of our addressable market by 2015, and that means reaching 1 billion people. To do that, our partners are absolutely vital. Our strategy will be to strengthen our partnership programme."
SAP is focusing now upon five market categories: Applications, Cloud, Mobility, Analytics and Database. To these are added the three pillars of its channel program:
Accelerate co-innovation, such as working with partners to develop mobile applications
Expand routes to market, working with customers to optimize coverage and customer touch points
Expand new innovation and emerging markets
This is an aggressive programme based around collaboration. Co-innovation is an interesting concept that SAP is using to embrace a variety of different efforts aimed at leveraging the creativity of its partners, and an expanding range of opportunities in the mobile and big data sectors.
"There are a number of different levels of collaboration in marketing and sales," says McArthur. "But, ultimately, partnering and collaboration combine strengths of both organisations Co-innovation is particularly important, and we are currently working on the HANA high performance analytic appliance with IBM, HP and Dell. This is a SAP in-memory solution enabling companies to analyse massive amounts of data in real time. The project involves partnering at a variety of levels; with global hardware vendors at the top, and locally with partners who are able to set up or provide the analysis."
SAP works closely with its partners, providing development kits and other tools as needed to develop solutions. The company has a wide range of partner programmes that help to identify partner capabilities and provide information sharing, making it possible to bring together the right capabilities and partners to meet a given opportunity.
"Globally and locally Cloud and converged solutions have led to a need for more partnerships," says McArthur. "Our partner programs centre around the Partner Edge Framework, that permits partners to manage sales success, marketing, certifications and so forth. There are a number of different partnership possibilities in Partner Edge. The framework includes systems integrators, VARs and developers. Everything is managed through the framework, and it has become an important focal point."
Global storage specialist EMC also has a strong emphasis upon partnership and collaboration, fostered in part by the increasing involvement of storage components in emerging areas such as Cloud IT and Big Data. "Our partner programme is the Velocity Reseller Programme," says ANZ channels manager, Brett Harris. "The programme offers four levels, the top of which are Signature and Premier. Levels are based on commitment and certification. In the middle of last year, we did make a change to the programme, adding a service provider programme as more partners, including resellers, move into this area in response to Cloud developments. We also changed the review period for the programme from yearly to half yearly, so we can respond more quickly to changing conditions."
Under the partner programmes, there is a range of benefits provided from EMC, along with commitments. For example, to be a Signature partner, a reseller needs to invest in two specialities, such as backup and recovery and storage solutions. For this, they obtain a number of benefits around marketing, rebates on business that they sell, and investment in demand generation programmes.
EMC's top tier providers are generally self sufficient, and tend not to collaborate with each other, but lower levels often do. At the lower affiliate level, requirements are not as rigorous, and there is more reliance upon distributors. These partners are more likely to work with other partners to provide skills needed for particularly opportunities.
One area that is sparking a need for greater collaboration is Big Data, particularly through EMC's Greenplum products. This is an area with considerable recent attention, but with fewer skilled providers. Premier partners view this as an opportunity, and EMC is ramping up its training and certification in this specialty.
"Our first priority is to develop skill sets within our partners," says Harris. "EMC provides infrastructure, and infrastructure is driven by customer business needs. Each partner has particular specialties in applications areas, which might include SAP, Microsoft, other technology areas such as Big Data, or according to other divisions."
Recent additions to EMC's reseller collaboration toolkit include a pilot programme called "Campaign Central" which provides a self service portal that gives partners the ability to execute campaigns from a pre-built framework.
"Our Velocity program is always evolving and adding additional specialties," says Harris. "Big Data is on the horizon. Other changes are in response to partners, whom we routinely survey for feedback. One thing we are looking for is to make sure that partners always profit from their investment. "
EMC makes some use of social networking, providing social media activation kits for Velocity partners. Usage at this point is limited mainly to incorporating EMC branding in a social media presence aimed at customers. It is also used to some extent among partners, but is not a primary focus.
IBM has long been known for its strong partnership programmes across the globe. "Our partnership programmes are generally focused on creating market demand and driving business," says NZ channels manager, Raymond Skoglund. "We also work to ensure the partnership works for both IBM and our partners. Our programmes reward partners for their skills and for sales to customers. There is a very wide range of offerings, and programmes include financing, IBM services, and our top achievers programme. We have about 800 active partners now across Australia and New Zealand."
IBM develops collaboration across a wide number of fronts in order to achieve its partnership objectives. "We collaborate, provide skills, and ensure partners have the right skills to be successful. We work to ensure partners have the right abilities to meet customer demands, and we also collaborate in the engagement with the client across different aspects of the business. We provide our partners with all the assets that make partnering with IBM easy to do and useful, including the knowledge and resources to make them as self-sufficient as possible."
Within the New Zealand environment, IBM has seen greater collaboration between resellers than in some other areas. "We promote collaboration across our ecosystem," Says Skoglund. "We recognise that, to be successful, partners will collaborate with other resellers. They recognise the value of Collaboration. We support that."
Collaboration involves bringing in IBM experts as needed, as well as providing training. The company has recently ramped up its efforts in this area with a number of new programs announced within the past year. One of these is a partner support hub program for sales, providing product information, configuration tools, collateral for proposals and expertise through a support hub that is made available through distributors. Another initiative is the recently announced Blue on Blue programme.
Blue on Blue is a programme designed to give solution providers added discounts for bundling hardware and software. The discount is available even if a hardware VAR partners with a software VAR in developing a solution. The effect is to increase the value of collaboration, and confront some of the opportunities that are emerging from Cloud IT. It is specifically designed to support partners that don't have skills across the whole product portfolio, and need to provide a solution. Obvious candidates would be those providing specialty services based upon emerging Cloud, Analytics and Mobility solutions. Hardware providers and software managed services providers are increasingly called upon to work together.
Social networking is an emerging tool for developing reseller partnerships, but it is still in the early stages of use. IBM is using it as a marketing tool, as well as a way to disseminate information to resellers, and to engage in other discussions. "There's a huge opportunity here, but we are still coming to grips with it," says Skoglund.
The new partner support hub and Blue on Blue programme incentivise and provide support for collaboration among partners and with IBM. "Knowledge is a huge asset and a differentiator for our partners," says Skoglund. "We are using the information available to help our certified partners by listing them on PartnerWorld. Each reseller has its own window, with skills recorded, and this is used by a decision engine that can go through skills and determine who the partners should be for a given opportunity."
For resellers, Skoglund advises that would be partners should engage early. "It's about communications," he says. "There's a lot of access and resource in programs available to resellers to minimise their investment and make sure they are productive and successful. The earlier they engage with us, the more support we can provide, and the more programmes we can put into place."