Shining Stars

No vendor's growth strategy can be complete without a big investment in partner programs. And as vendors sell more product through their partners and invest more time and money in developing and improving their channel programs, the question becomes this: What are the best practices around those programs? Where are vendors investing their channel dollars and how are they working to make partners more profitable?

VARBusiness recognizes the best and brightest of the channel--70 vendors, to be exact--that epitomize what channel excellence means.

These vendors have higher channel revenue and are selling more through the channel than the rest of the VARBusiness Partner Programs Guide vendors. The channel generated more than $1 billion in annual revenue for more than a quarter of the Five-Star vendors. That was the case for only about 4 percent of the non-Five-Star players.

On the average, this year's Five-Star vendors invest just above 11 percent of their revenue in channel efforts. And that investment is paying off: About 70 percent of their revenue came from partners, compared with about 60 percent for the other vendors.

This translates to a higher percentage of both products and services being sold through the channel. For example, 88 percent of the Five-Star vendors' products are sold through the channel, while 79 percent of services are sold through partners. That compares with roughly 70 percent of products and 62 percent of services being sold through the channel for the non-Five-Star PPG vendors.

Security is a top technical priority for this year's Five-Star vendors, topping the list of categories applicable to their channel programs, followed by software, storage and services. For the rest of the vendors, software topped the list, followed by security and services.

Where exactly vendors are making their investments varies, but many are pouring cash into channel staffing, managed services and specific market segments such as SMB. One thing is for sure: Making partners happy and keeping them profitable are key to the growth of these Five Stars.

Staff And Services

SilverBack Technologies is making big investments in its channel-focused employees this year. Jim Hare, vice president of worldwide sales, says that he's working to increase his channel support and management teams. In addition, he has hired four channel-specific field engineers and a full-time trainer to help build better partner-education programs. SilverBack also completed its e-learning center to supplement on-site and classroom training for partners.

"We see close to 80 percent of our revenue from existing partners," Hare says. "And almost 100 percent of our marketing dollars go to those partners, so it's a very lucrative business for us to make partners successful."

SilverBack's philosophy is to continually reinvest in its partner program, listening to what partners want and building it around them.

Hare's partners appear to be putting the program to work and saw big success last year. He says that SilverBack's Business Builder partners almost tripled their deployments, growing their licenses by 266 percent. SilverBack is also helping partners focus on selling managed services more successfully. "We're teaching our partners how to attach and bundle services. You don't just sell a router; you sell a managed router. You don't just sell a firewall; you sell a managed firewall. We're focusing on the commodity technologies that are potentially manageable."

McAfee is another vendor that's making sizeable investments in its channel staff, and around managed services as well.

"We felt it was important to get our ratio of channel account managers to partners down," says David Roberts, McAfee's senior vice president of North American channels. "In the enterprise space, we'll have two times the resources that we had last year to call on our most precious, targeted VARs that we got to market with."

And for 2006, McAfee is investing in something new--its managed-services offerings for partners. Resources will be dedicated to helping partners understand best practices and sell services around McAfee products.

McAfee is beefing up its technical resources for partners as well. "One thing our VARs have said is that we have to get more technical resources," says Roberts. "[Those are things] such as having a consultant available to subcontract for the VAR to an end user and making a full-time McAfee systems engineer available to the VAR."

All in all, McAfee plans to increase its channel resources--personnel and funding--by 25 to 30 percent.

NEXT: Focusing on the midmarket, finding new business, recruiting national resellers and more.