CA's Big Channel Bet

In a bid to increase storage software sales by an order of magnitude, Kumar plans to pay CA's 4,000-person-strong direct-sales force a commission on every storage deal that goes through the channel. As part of this plan, he also intends to set aside cash to compensate the appropriate solution provider with a commission even in cases where the direct-sales force drives the deal.

Today, about 25 percent of CA's storage software sales go through the channel. Under the new model, Kumar proposes that 100 percent of those sales be tied in some way to the channel.

The new commission structure sets up a monumental storage software management battle between CA, Veritas Software and EMC. CRN Section Editor Jennifer Hagendorf Follet continues her leadership coverage of CA with an exclusive story this week about the changes.

Channel chiefs and solution providers must be ever-vigilant and make sure that vendors embrace direct-sales compensation models that essentially penalize the direct-sales force for failing to partner. What is needed is not channel-neutral compensation but pro-channel compensation. This is the only way to encourage finely tuned partnering between a vendor's sales force and partners.

And CA isn't the only vendor grappling with the issue of direct-sales compensation. Look also for Hagendorf Follet's story about Enterasys unit Aprisma's decision to implement changes in direct-sales compensation, and for Industry Editor Craig Zarley's report about Hewlett-Packard's move to scrap a proposal that effectively would have cut direct-sales compensation on some channel deals by as much as 18 percent. Such a move could have been disastrous as HP finalizes its post-merger channel plans, slated to be set in motion as early as next month.

Making compensation changes,especially those as aggressive as the ones proposed by CA,is costly. Kumar says a 15 percent increase in sales under the new model could mean CA would lose big bucks. My bet is that the CA changes instead will end up driving huge sales growth for the vendor and its partners.

Which vendors are offering pro-channel compensation? Let me know at (781) 839-1221 or [email protected].