Today's Top Channel Execs Set Corporate Strategy

We asked Allison Watson of Microsoft, Kevin Gilroy of Hewlett-Packard and Paul Mountford of Cisco to share some of their insights and secrets for managing in such tumultuous times. The three gathered at Cisco's worldwide headquarters, just a few steps away from CEO John Chambers' office, for a fascinating discussion. First, the backdrop: Gilroy was shuttled in, compliments of HP's corporate jet, after spending the day crisscrossing the country with top executives, closing deals that would impact the company's quarter. Watson had been spending the past few weeks flying around the United States and overseas, preparing Microsoft's channel for the introduction of its major product release,MS-CRM. Meanwhile, Mountford had been working and traveling tirelessly to re-engineer the company's worldwide channel as Cisco looks to regain growth.

We covered as much ground as we could in the precious little time we had with these individuals, and one point resonated above all: Channel management is no longer some overlooked or underappreciated element of a company's sales or marketing strategy. Today, it is an integral and indispensable part of the corporate strategy, where the chief channel officer is on par with the CFO or CIO in terms of sheer influence over the company's direction. They have huge budgets and clearly dictate where millions of dollars will be spent on everything from demand-generation activities to advertising to training to R&D. Channel officers, especially those from Cisco, HP and Microsoft, also work extremely closely with their CEOs. That can be as much a curse as it is a blessing. Having the CEO's ear means Chambers, Steve Ballmer and Carly Fiorina are placing some serious demands on them.

Watson, Gilroy and Mountford contend that their leaders understand how channel management can be fashioned into a powerful, competitive advantage for their organizations and have an acute appreciation for the value of indirect sales. Case in point: Gary Bloom, who leads storage software market leader Veritas, recently replaced his top channel executive with someone he believed could take his partner strategy to another level. This is also a very serious business.

"The channel manager is no longer the guy closing a deal at 3 a.m. in the bar," Gilroy said. Today's channel manager makes or breaks the quarter. From Mountford's point of view, the channel has become a competitive differentiator for Cisco. The company might be the dominant supplier of networking gear, with enough market share to make a trustbuster's mouth water, but it also has a well-thought-out and innovative channel strategy compared with most of its rivals.

The channel officers also agreed that their partner networks are entering a new era, one marked by expansion into vertical markets and technologies that will help customers drive further productivity gains. It is here they are expanding their partner bases, looking for specialized solution providers and ISVs.

"We are in Chapter 2," Gilroy said. This new era is being defined by closer links between channel managers and customers, precise measurements of customer satisfaction and an acceleration of business with partners who have highly cost-efficient models. We extracted those observations when we asked the three executives who they think won the recession. They were unanimous in their answers: services-oriented solution providers and, of course, their companies.

I'd like to pay tribute to an individual who helped many high-tech journalists understand the market more clearly, especially when it came to the moves of IBM. Sam Albert, 72, passed away on Feb. 16. He spent 30 years with IBM and is credited with creating its business-partner program and coining the term "co-opetition." After retiring from IBM several years ago, Albert formed Sam Albert Associates and doled out advice and insight to many writers. Often quoted in this and other magazines, he was a media fixture, writing columns and appearing frequently on television. He was a warm individual who will be sincerely missed by us all. Albert is survived by his wife, Joice, two children and two grandchildren.