Choosing The Right Government Partner

"ViewSonic has been offering special pricing and programs for the past seven years to government and education solution providers," says Angelina Scott, manager of government and education sales at ViewSonic, "but we formalized the View GovEd Program last year because we saw an increase in demand in the government and education spaces with our partners and broadened our offering to better support them."

The display-technology vendor added a number of specialized benefits for its View GovEd members, such as bid desk support, special leasing offers and sales support for federally authorized products. Now Walnut, Calif.-based ViewSonic is working on a special certification program for its View GovEd members.

While a growing number of technology companies are enhancing their presences in the public sector, a relatively small number of vendors have built actual dedicated partner programs for their government solution providers. And some are seeing mighty returns from those programs.

For example, Secure Computing, a security vendor based in San Jose, Calif., saw its government sales more than double in 2003, thanks in large part to its Government First Program, a spin-off of its PartnersFirst Program.

Solution providers are also benefiting.

Tom Mountcastle, president of James River Technical (JRTI), a longtime government solution provider based in Glen Allen, Va., says such programs help his company win business in the ultracompetitive market. "You need consistency when you're in the federal government business," Mountcastle explains. "You need to have a team of people around you who are very familiar with the market and its rules."

JRTI does the majority of its business around Silicon Graphics (SGI) and related high-end Unix and Linux solutions and is enrolled in SGI's Government and Defense Solution Provider Program, in addition to government programs of other vendors, such as Secure Computing.

What does it take to have a top-shelf government VAR partner program? Here's a look at a few vendors that have developed successful programs and what the most crucial elements are for both longtime federal integrators and budding solution providers in the public sector.

Navigating The Red TApe
There's little doubt among government players in the channel that dedicated partner programs add value to a solution provider's business. In fact, simply being designated an authorized government reseller can boost a solution provider's bottom line.

Such is the case with JRTI, which formed an exclusive partnership with SGI in 2002 for the higher-education market, making JRTI the vendor's top strategic partner for its 2,000 higher-education clients. The government and higher-education markets are closely tied, Mountcastle says, because colleges and universities receive roughly 90 percent of their funding for IT investments from federal grants. The exclusive designation helped JRTI grow its sales 35 percent in 2003.

Mountcastle says SGI's Government Solution Provider Program was a successful match with JRTI for several reasons. For instance, SGI provides its government partners with bid instructions, specialized technical support and an MDF program tailored specifically to partners targeting government agencies and higher education.

Benn Stratton, director of business development for SGI North America, says SGI prides itself on having a well-prepared channel-support team for its government business. "When we come to the table with a partner, we come with a lot of vertical knowledge about that government agency's needs," Stratton says.

ViewSonic also offers a variety of benefits to members of its View GovEd Program, including special government and education discounts. In addition, the display maker has a bid desk assistance service that helps solution providers develop contract bids and work out financial terms for the contracts.

Perhaps the most important element for government partner programs is guidance. Solution providers often look to their vendors to help eliminate the risk of doing business with the government, especially in the federal sector where the complex rules and regulations can create a minefield of penalties for VARs. Witness PC Connection, which late last year found its government subsidiary, GovConnection, in hot water when the GSA canceled its $56 million federal contract because of improper procedures.

Mountcastle says proper GSA Schedule information and support from vendors make all the difference in the world. "One of the things I'm most impressed with is SGI's GSA Schedule managers. Any time anything changes on the GSA, they're right on top of it," Mountcastle says.

Because of the complexity of the GSA Schedule and other contract vehicles, some vendors have even gone as far as creating a program exclusively for federal solution providers. Secure Computing's Government First, for example, is specifically for federal resellers and requires that at least 50 percent of their partners' sales come from federal market customers and have at least one salesperson dedicated to the federal business.

Winning Bidding Battles
Product pricing has been an issue for many government solution providers. Because federal contracts are made public, a number of authorized resellers and integrators can make bids for the deal and lower the margins significantly. Many VARs say margins have eroded because of increased competition and growing numbers of resellers getting in the highly lucrative government market.

SGI, however, decreased in-house competition by reducing the number of members in the Government and Defense Solution Provider Program. Mountcastle says JRTI has benefited from the vendor's smaller, more focused government and higher-education channel. "SGI doesn't want all of us vying for the same couple of agencies, so federal marketing managers help," he says.

In fact, SGI recently added a new deal-registration program for its government partners, which allows solution providers such as JRTI to register clients and bids with SGI so that other government partners can't compete for the client or undercut the bid. "We've had situations in the past where we've done months of work on a bid, and at the last minute another company came in with a lower price and took the contract," Mountcastle says.

Secure Computing, which spun off from Honeywell in 1989 and has had a longtime presence in the federal market, also took the "less is more" approach. Currently, the security vendor has just 10 members in its Government First program, including top integrators Northrop Grumman IT and GTSI.

"It doesn't mean we're not looking for new members. We just want new members that don't overlap with existing ones," says Matt Galligan, director of Secure Computing Federal, adding that GTSI approached Secure Computing last year about joining and was, of course, accepted.

Despite the smaller number of partners, 80 percent of Secure Computing's federal sales go through its Government First program members. Galligan says Secure Computing's narrow government channel allows it to offer steep product discounts and devote more resources to those partners. And with its growth and swelling interest in IT security at the federal level, Galligan expects to add more solution providers this year.

"The federal government's IT investments are continuing to grow," Galligan says, "and so is the government channel."