Surviving And Thriving
Finding success via vendor consolidations
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By Chris Gonsalves, ChannelWeb


3:20 AM EST Fri. Nov. 10, 2006


Scott Nesbitt was a big fish in a small pond.

Among the elite resellers in Siebel's limited partner program, he and his staff at Tier 1 Innovation could make waves with a comment here, a phone call there. He had access, authority and power. He had juice.

All of that was poised to change last year when Oracle swam up and swallowed Siebel and all of its channel partners. In an instant, Nesbitt found himself one of thousands of like-sized partners clamoring for recognition in a partner program that dwarfed anything he'd been involved in previously.

"It certainly is a large ocean to play in," says Nesbitt of Oracle's partner universe. "We saw it coming and knew there would be challenges in the new relationship. The day after it was announced, we huddled and figured out a plan. We knew we had to embrace this."

Nesbitt's team was staring down a sea change that affects more and more VARs. Whether it's Oracle's purchase of Siebel and PeopleSoft; Hewlett-Packard's assumption of Compaq and Mercury Interactive, OuterBay and AppIQ; the IBM buyout of FileNet or EMC's acquisition of Documentum and RSA Security, solution providers are increasingly asked to move from the comfortable confines of a smaller partner program into the realm of a mega-program. So how does a VAR like Tier 1 maintain a visible profile in an age of increasing vendor consolidation?

"Continue to do what you did that got you to the position you were in with any other partner program," suggests Doug Kennedy, vice president of worldwide alliances and channels at Oracle. "You must already have a strong adviser's role. You have to maintain that."

Karen James vowed to do just that when her company's relationship with Compaq got swept up in the wash surrounding Hewlett-Packard's buyout of the PC maker. "We were at the top of Compaq's list and became very small when mixed in with HP partners," says James, the CEO of GeminiTech, a Waipahu, Hawaii-based VAR. "The key for us to make the transition and maintain our high level of standing was to be visible during the transition. In our case, HP held CEO meetings and Webinars at its new facilities, and we made sure we attended.

"When the new sales teams came to town, we made sure that we developed personal relationships with the new teams and showed them that we would drive business into their pipeline," James says. "Any large manufacturer sales team will make you a go-to partner if it knows you're paying attention to its bottom line. We made sure that the new guard got to know us by name and face."

Nesbitt followed the same course. He got on Oracle's radar early, making plans to attend his first Oracle World conference on the day the Siebel acquisition was announced. Tier 1 has sent a steady stream of its employees to Oracle training sessions. Nesbitt has also made a point of meeting with every Oracle regional vice president in the areas in which Tier 1 does business. "It was definitely our strategy to stay active," he says. "We knew that to survive and thrive in this new environment, we needed to get in the forefront."

"You can either be a successful part of the transition or complain about it," James adds. "The final part of our success in this situation was to actually make our numbers."

NEXT: Leveraging larger resources

Making your presence known to your new, larger vendor is more than just speaking up and isn't limited to your own internal resources. Oracle's Kennedy stresses that using the tools provided by a larger, more robust partner program helps solution providers elevate their profiles. "There really are no barriers," he says. "And in our case, our partners should find that things like our expanded solutions catalog and improved ways to find and develop partnerships within the program make these kinds of transitions beneficial."

"I think you often find there's more organization and structure in a bigger program," Nesbitt says. "We've found places in Oracle's programs that maybe take a little longer than we'd like or we're used to. But, overall, they've added reps and done a good job of maintaining our Siebel contacts and keeping our relationships intact."

Being in a larger reseller program creates additional opportunities to partner with other VARs, an increasingly important asset as solution providers of all sizes look to achieve the scale and skillset that matches any number of emerging opportunities.

Lori Cook, vice president of professional services and channels at BMC Software, says the vendor works hard to make sure that all resellers have access to the same kinds of tools and training that the company's internal sales staff receives. As a result, "partners are finding other partners to work with. They're entering new markets and developing new solutions as a result of being immersed in this environment," she says.

BMC, which acquired the popular Remedy IT service-management suite from Peregrine Systems in 2002, has even launched a tool for resellers to assist in demonstrating their wares. The BMC Flight Deck Global Solutions Site is an on-demand, Web-based software-demonstration tool with a series of interactive demos that enables partners to model complex BMC solutions. "This is the kind of unprecedented support for partners I think you'll find only from us," Cook says. "And the feedback from across our partner organization is amazingly positive."

Indeed, it takes a large and mature partner program to offer the breadth of tools, training, support and networking that vendors such as BMC, HP, IBM and Oracle provide.

Kevin Johnson, president of Seamless Technologies, a BMC reseller in Morristown, N.J., says he looks for vendor partners that possess "firm processes, transparency and access"--all of which he feels are improving in his relationship with BMC.

NEXT: Bumpy transitions.

The transition up the food chain from a smaller VAR program isn't always so smooth. Robert Deitz, CEO of GvTechSolutions in Shingle Springs, Calif., has wrestled with the issue more than most as he and his company work to bring newer, often smaller, manufacturers into the federal market.

"If we're successful, they usually grow and get acquired," Deitz says. "And we're usually successful. So we lived through the Symantec acquisition of Brightmail, the Cisco acquisition of Okena, the Blue Coat acquisition of Ositis and several others."

From his perspective, Deitz says the deals often hurt a smaller company's public-sector business. "While they're smaller companies, they have special pricing, special configurations, great service and focus from the reseller and the company," he says. "But when they get acquired, the bigger company usually has existing resellers and pricing that they try to shift over."

Deitz says 90 percent of his Brightmail customers were large licenses with 10,000 to15,000 users. But Symantec only offered special pricing for up to 2,000 users in the segment, meaning GvTechSolutions' customers faced up to a 500 percent price increase. "And the premium-support Web links and phone numbers changed without the customers being told," Deitz says. "So when [users] had a problem, the e-mail they sent was returned and the phone number didn't work. [That's] not a good situation."

When Cisco took over Okena, Deitz's firm was in the middle of a substantial Okena rollout. "With Okena, we had focus and one team to work with and we were moving forward," he says. "When Cisco took over, we didn't know who to talk to. Worse, they split up the communication among [three regional] reps. Not a good strategy. No one knew what was going on.

"When we pleaded to be the lead, we were ignored," Deitz adds. "That wasn't the way Cisco did things. The end result was two years of lost work. [The customer] now uses McAfee."

Even if the new vendor greases the skids for existing partners, what of the customers that may be skittish about making the transition with you? GeminiTech's James stresses communicating with users even as you're preparing to shift partner-program gears. "Rather than facing our customers and saying we don't know what's happening, we presented the broader portfolio of goods and services and shared how it would benefit them and us," James says. "We took the new portfolio of products and solutions now available to us, and we sold them and made them work with our customer base. When they expanded, we effectively expanded."

"It isn't all easy," Tier 1's Nesbitt says. "The merger happens and you deal with it. Embrace it and see it as an opportunity. Is it better for us now? Yes. But I don't even look back. We've increased our business; Oracle has increased their business. That makes the relationship work. We welcomed it, and it has proven very successful for us."


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