Make Room For Influencers

To examine the issues involved, CRN gathered top channel executives from Citrix Systems, Computer Associates International, IBM, Microsoft, Oracle and Veritas Software for its first CRN Software Roundtable, held at the recent Solution Provider XChange conference in Orlando, Fla. Some vendors,including Citrix, Microsoft and IBM,already have agent programs in place, but all of the roundtable participants said they are planning to introduce or step up their agent attacks this year.

While programs in place or in development likely will evolve over time as vendors look for the right formula, all of the roundtable participants agreed that agent and influencer programs, in some form, are here to stay. Excerpts from the roundtable discussion follow.

ON WHAT AN INFLUENCER IS:

Ross Brown, vice president of Worldwide Sales, Services and Channel Operations, Citrix:
We have seen a lot of terms thrown around the industry in between agent and influencer. Everyone is using the same terms to describe different problems. You may be having traction problems in SMB. You may be having margin problems in the channel. You might actually have some folks who have entered a different business model who don't want to deal with top-line revenue anymore, although I have yet to see that. Every vendor I have talked to over the past six months is sort of coming at this thing from a slightly different angle.

I am trying to find a way to reward people who generate demand, and compensate for the fact that I've got folks in my channel who sell on price. That is one of the issues that we're facing.

We also have other folks who are saying, 'I am trying to find a way to more effectively reach smaller customers.' We've got other folks who are saying they are consultants, who don't want to be touching the delivery of the product.

Michael Sotnick, vice president of partner sales, Veritas:
Software companies as a whole are looking at ways of rewarding partners for influencing transactions. To us, "agent" is not a category. Gifts come in all different-size boxes, and agents come in all different types of partners. We are not limiting people in our partner program from participating in an agent program. Today, our agent program is specific to systems integrators. So our formal agent program today is really aligned with Accenture, IBM Global Services, BearingPoint and that family of partners. We are in the midst of refining a broader agent program that will span horizontally across all our different types of partners.

Citrix's Brown:
There are a whole lot of unprofitable and unproductive resellers who decided to become agents because the reseller model wasn't working for them. That is sector-specific. You look at the telecom model with the agent programs that happened there. Those worked because you have a time-based model that you are selling. An agent [model] is the most natural way to economically reward people when you are selling a subscription to a service. When you are selling a product, [the agent model] starts to become forced because you don't have regular income generation, so you have to be very focused on it and then do the tracking.

Scott Cooper, vice president OF worldwide channelS and SMB marketing, IBM:
We don't even use the term [agent]. This has been a natural way of doing business for us forever. We also have, which may not be unique, the direct-sales force, which is probably a bigger conflict to partners. The model around an agent or an influencer, given our portfolio,middleware stuff,they are all agents. There is almost no value anymore from taking ownership of a license of DB2 or a license of WebSphere and a license of Notes and immediately passing it on, because it always goes with some amount of service, some application and those kinds of things.

ON FUTURE INITIATIVES:

Ken Muse, vice president of North American Sales Channels, Oracle:
We are definitely, over the next six months, going to have a much more formal program, and that will be not only around a program but products that will be ushered through the program. As an example, as we move downmarket with applications, we are going to bring on a whole host of new types of, in your word, agents, but in our word, influencers. So that's going to drive a whole new market segment for us. We believe influencers are incredibly important for the future.

Citrix's Brown:
We have had the benefit of being able to experiment with a couple of different models in other geographies. We did an influencer program in Australia, New Zealand, and one in Latin America and Canada to sort of test a couple of things. The thing we learned is it had to be rich enough. It has got to be double-digit margin on these things or it sort of becomes a consolation prize. We did a 3 percent influencer award as a test in Australia, and found that the number of complaints from resellers about losing a deal dropped dramatically because nobody was claiming the award.

Veritas' Sotnick:
Our partners have told us they want speed, agility and consistency. If we align ourselves in an influencer model around those three characteristics, we'll be successful. In our experience today, we are moving from what is a global systems integrator relationship that Veritas has built, and moving that into our core solution provider portfolio. And we are going to do that again on the edges of our product and solution portfolio vs. core, more mature technologies.

Michael Natoli, vice president OF STORAGE channelS, Computer Associates:
From an overall portfolio perspective, we have been trying to solidify that for the last couple of months. Over the next six months you are going to see a lot more solidification in the program. From a product standpoint,what products make that up,that is going to be a very liquid topic for us.

IBM's Cooper:
I don't see us coming up with a new program in the next six months that changes anything in some dramatic way. We are really working more on consistency across the broad range of programs. Personally, I think time and natural business dynamics are going to shake most of this stuff out, not us screwing with another five points here and there, front end and back end.

Allison Watson, vice president of worldwide partner sales and marketing, Microsoft:
From our perspective, we're not going to change anything in the next six months. We are doing a global rollout on the things we are just starting. Nothing is new. However, we are very committed to the feedback as to what is going on. Is it working and is it having the desired effect? That is our goal. Are we bringing back value to the solution provider community that is so critical?

ON DEAL REGISTRATION:

Citrix's Brown:
The thing that's killing us on this thing is looking at the tracking and logistics of knowing who was where. There is no worse position to be in than being the arbiter of income for a channel partner. You can't win. You have got five guys who think they influenced the deal. Only one is going to get it. Thirty days ahead of time there are maybe one or two guys who know about a deal because they are driving it. Seven days ahead of time there are 30 or 50 of them.

CA's Natoli:
In the data protection space, I don't see this being a fit. We have a very defined, very mature channel there. To introduce an agency model there, I don't know if it is going to be necessarily applicable. Where I see it having more of a bigger impact within CA is within our eTrust and AllFusion lines, because they are more unique marketplaces. You don't have the channel that is as mature as there has been in the storage base today.

Veritas' Sotnick:
The focus we have is on the resellers who are making the investment in a longer, more complex sales cycle, giving them the confidence up front that they are going to make money on that. The last thing a partner wants to do is to spend the time, cycles and energy to evangelize a solution, only to find that their end-user customer goes and shops it on price and they are left at the end of the day with nothing.

Oracle's Muse:
We look at three key elements that make up more or less an agent-style program, and it is open to anybody. It would be referrals, influence and a reseller component. So on any given transaction, a partner has the opportunity to do any one of those. For the applications market, we have done about $120 million in revenue based on leads given to us from partners.