Security Vendors Help Partners In The Down Economy: 13 Perspectives4:44 PM EST Mon. Mar. 02, 2009
Fortinet is meeting challenging economic times head on, funding a leasing program at TechData through GE that allows partners to extend credit availability and leases on all equipment. In addition to extended credit, partners will receive help finding security solutions that fit customers' needs and budgets.
Meanwhile, the Sunnyvale, Calif.-based company made some changes related to its deal-registration program designed to protect partners' margins from being undercut when working on a deal. Once partners bring an opportunity to the table, Fortinet helps protect the deal with margin distribution -- not giving the same margin benefit to competing partners for the same deal.
"They don't have to cut into margin to cut a deal that they work on very hard from the very beginning," said Kendra Krause (left), vice president of channel sales for Fortinet. "That's been very successful."
Fortinet also has implemented instant -- not back-end -- rebate programs on various FortiGate products and the FortiMail 400. The company also has dropped the price of several systems. Executives say they plan to negotiate nonstandard pricing that benefits both Fortinet partners and end-user customers.
In an effort to give its partners a welcome boost in the down economy, Kaspersky Lab recently made some major changes to its Green Team Partner Program. One of the biggest enhancements? A revamped financing program that gives creditworthy partners the ability to receive free 60-day extended distribution terms for all of Kaspersky's products when purchasing through an authorized distributor.
"They can hold onto their cash a little bit longer and it doesn't cost the partners anything depending on the level of qualification," said Stephen Orenberg (left), president of Kaspersky Lab for the Americas. "We think that's a pretty big deal."
Meanwhile, Kaspersky opened up its deal-registration program to all partners, allowing them to earn incremental discounts on approved opportunities at the time of purchase from distribution. In addition, the Moscow-based security company is making a point not to cut margins and is limiting the number of partners it recruits over the next two years.
"We don't want thousands of partners in our partner program. We would rather use that money for enablement for existing partners," Orenberg said.
SonicWall executives say that to help take away some of the sting of the challenging economy, they're adding a significant margin enhancer to their deal-registration program. For gold, silver and bronze partners, SonicWall is providing an additional 8 percent discount on top of its existing margins, which partners can drop to their bottom line or use to be more cost-competitive.
SonicWall also is providing customers who purchase firewalls from resellers coupled with services an additional SSL VPN appliance at no extra charge. The company also has seen traction on its 60-day flooring program, in which partners can put in a credit application with GE Capital and receive an additional 30 days of financing, which SonicWall then pays to the distributor. Ultimately, the extended terms allow partners to offer more generous payment terms to their own customers, executives said.
Meanwhile, SonicWall executives said that they're continuing the PERCS program, or Partner Enabled Renewal of Customer Subscriptions, which gives channel partners the option of capturing renewals themselves or allowing SonicWall to take the reins of renewal details, freeing partners to work on larger deals while they receive a cut of the recurring revenue stream.
Pictured left is Marvin Blough, SonicWall vice president of worldwide sales.
Websense is reallocating its budget to provide partners more money up front. Meanwhile, the company also launched an initiative in its first quarter to take what were back-end rebates and put them into deal registration on the front end, significantly enhancing partner margins, executives said.
"We took that budget and we plowed it into deal registration," said David Roberts, Websense channel chief (left). "Minimum transactions now get resellers [higher] margins on transactions on new pieces of business."
In addition, the San Diego-based Websense has launched an online renewal center, designed to streamline the renewal sales process for smaller deals, generally with 50 users or less, with an online renewal notification and tracking system. Websense executives said that the new automated tool allows partners to retain connectivity with their customers and receive full recurring revenue margins more efficiently for a much broader customer base.
Websense is planning to roll out significant pricing and packaging changes, with aggressive flat pricing, for its hosted e-mail security products. Plus, in an effort to reduce marketing costs for its partners, Websense also is investing more in Websense University training, as well as enhanced marketing and co-branding with its resellers, Roberts said. As a result, partners will have access to Websense materials that can be used on resellers' Web sites or included in newsletters.
Trend Micro executives say that the company is navigating through unsettling times by maintaining price margins on products, ensuring that their partners' businesses remain profitable.
"We do not want to engage in predatory pricing that diminishes the capability of making profit in these times," said Cody Leser (left), senior Trend Micro director of North America channels. "Now is the time we continue our investment with our channel partners, not diminish it."
Leser said that the company currently is discussing offering front-end or back-end rebates over the next three weeks, and added that the company has decreed it will not make any cutbacks to channel staff during the downturn.
Protecting partners' profits is one way that Sophos is dealing with the rough economy. To reduce competition between partners, Sophos recently launched its margin-protection program, designed to protect and reward the first partner to bring a deal to the table. Once the partner brings in an opportunity, they automatically receive higher margins and more discounts than "other folks who might come along later in the process," said Chris Doggett (left), Sophos director of global channel programs.
"If they're all on the same margin level, they tend to keep competing," Doggett said. "By differentiating margins, you force whoever the person is who brought in the deal to match anybody else's bid. In our case, that's double digits."
Meanwhile, Sophos also partnered with a financing company that established access to extended lines of credit. Revolving lines of credit can then be lent to reseller partners of all sizes to create flexible payment terms with end-user customers that in turn give channel partners the ability to make bigger deals, Doggett said.
"It's like an MSP, and yet the reseller gets paid the entire amount right now. They get to realize the full value of the contract when it's signed."
To ease cash-flow constraints, AVG is adding more discounts and considering enhancing baseline margins for its partners.
In light of the downturned economy, AVG said that it is giving out additional 5 percent rebates, on top of current margin levels, across the board through all program levels from March through May. Plus, the company is looking at increasing margins for partners, which start at 20 percent, to possibly 25 percent or higher. The added cash will in turn provide partners a way to offer more flexible financing to their customers, executives say.
Meanwhile, AVG is investing in more presales support and training to get partners up to speed on its management console and other newer technologies.
"We're getting a lot of defectors from the big guys," said Bob Gagnon (left), AVG vice president of sales for North America. "We're really still in velocity mode right now."
Once upon a time, Barracuda offered discounts on products for its own resellers to use internally. But to make things easier for channel partners in this struggling economy, Barracuda decided to let partners have its products for use in their offices at no extra cost. Specifically, Barracuda is offering partners its link balancer, its SSL VPN and Barracuda backup service. The money solution providers save from the free products can go right back into driving sales, executives said.
Barracuda also is coming out with an aggressive trade-in promotion that allows users with extensive software renewal fees to take a license trade-in for a Barracuda product.
"In our market, the biggest thing that is hurting channel partners is customers putting purchases on hold," said Ezra Hookano (left), Barracuda vice president of sales for North America.
In an effort to ensure that partners are hitting those deals, Barracuda is offering ways for partners to replace customers' existing security infrastructure with Barracuda's security appliances. Partners can replace a competitor's one-year $10,000 firewall with a three-year contract for Barracuda's Spam Firewall and Web Filter for about the same price, executives say.
To weather the economic storm for the last four months, Cisco IronPort partners have had more flexible financing options through Cisco Capital, which they can then extend to their end-user customers. For six months, Select Certified partners buying through distribution can take advantage of financing that's extended from 60 to 90 days, while minimum credit guidelines have been reduced to $25,000.
The creative financing options allow partners to offer high-end deals, which customers can pay over a longer period of time with lower payments, executives said.
"From our perspective, as the economy seems to be getting tougher, we're looking at more programs to try to invigorate sales and ensure the success of our resellers," said Tracy Pallas (left), director of U.S. channel sales for Cisco IronPort.
And in an effort to get its partners trained on products in the down economy, Cisco has invested in more affordable and flexible training options for its reseller partners, which include more Webinars and online training materials.
"It's getting harder to get people out of the office. Webinars can be used at a fraction of the cost [of individual seminars]" Pallas said. "That is something we'll be leveraging over the next six months."
In a time when customers are tightening their belts and slashing IT budgets, VeriSign is finding ways for its partners to actually win deals on higher-end products.
How? In an effort to boost sales in the down economy, the company is stepping up its training for partners to offer customers its flagship Extended Validation SSL. The training focuses on every aspect of the sales cycle, accompanied by a suite of content, graphics and how-to lessons. Content includes e-mail templates, data sheets, copy and tips for things like search-engine optimization, which VeriSign bundles in a packet or PDF to give to its partners, who then use the information when working with end-user customers.
"What we've found [to be effective] is to help them get in the mode of selling higher-value products. It's not what they're used to," said Tim Callan (left), vice president of product marketing. "The community is enthusiastic. They're excited about the idea of going in and being a higher, greater value-add to their end customer."
Microsoft is arming its partners with bigger bonuses and more incentives in the tough economy. One of those incentives is providing an additional 50 percent bonus in addition to the 30 percent regular fee for Security Software Advisor partners who beef up sales by offering products coupled with integrated security. For example, instead of selling and deploying SharePoint or Exchange, partners are incentivized to deploy Forefront security on top of SharePoint and Exchange.
"It's a real, tangible investment we're making in response to the economic crisis," said J.G. Chirapurath (left), Microsoft product director of the identity and security group. "We passionately feel the security should not be bolted on -- it should be built in."
Microsoft's security partner program is designed to focus on the company's security and value offerings.
Expanding on its partner program, WatchGuard partners will have access to bigger financial incentives when they hit targeted growth benchmarks in the company's volume incentive rebate program. In addition, WatchGuard has leveraged its financing program, WatchGuard Finance, to extend greater access to credit and provide more flexible financing and equipment leasing options for channel partners. The creative financing options are subsequently passed along to reseller customers, enabling them to make the same high-dollar purchases with smaller payments over longer periods of time.
WatchGuard also rolled out its deal-registration program at the end of last year, allowing partners to register a deal with just one of the company's Peak products.
"In difficult economic times such as these, it is our responsibility to support our partners' profitability by listening closely to channel feedback while addressing market transition in an effort to support long-term growth and channel health," said Mark Romano (left), WatchGuard director of global channel marketing.
To give partners a lift in the challenged economy, Symantec recently launched its Partner Referral Program, designed to help partners grow even if they don't have the budgets to hire new talent. The program provides partners the opportunity to identify partners with complementary areas of expertise and partner with them to increase value to their offerings and drive more revenues. Specifically, the new referral program promotes partner-to-partner collaboration, rewarding partners when they refer a sales lead to an authorized participating Symantec partner who has the technical expertise or is otherwise well positioned to close the lead.
"By setting up a referral system that aligns sales leads with an authorized partner, everyone benefits when a lead closes," said Tricia Atchison (left), Symantec director of channel marketing. "Partners are rewarded and customers get expert guidance to ensure that the Symantec solution will meet their needs, and we all get another satisfied customer."
In addition, Symantec's Aspire Rebate Program gives SMB revenue for silver and registered partners an extra boost in the challenged economy by offering rebates for growing their sales of Symantec products. Partners that also get an SMB specialization can earn extra rebates within the Aspire program.