Q&A: Channel Executives Take On the 80/20 Rule

VITAGLIANO: To have an adequate level of coverage throughout the world, you have to be really careful not to differentiate too much and base training and/or certification on the size of partners or revenue. If you do that, you'll naturally gravitate to just the largest partners and end up missing coverage in tertiary markets and the SMB space. Juniper bases training on the qualifications and capabilities of partners. And in a small market, there may be a partner that has the majority of its people trained on our products, and they would be certified for the highest-level status.

KENNEDY: We're heavily focused on industries, as well as segments of the marketplace, such as SMB. Our focus is on selecting the right partner for the right market or the right industry. It's complex to a certain extent, but the nice thing is that we've got dedicated industry business units that we work with that say, 'Hey, look, here are the partners...we need for specific industries. Here's the partner list that we've analyzed by looking at the best that's in the entire marketplace, not just inside of our walls.' Then we go target those partners for recruitment or for further enablement. The reward for the partners is that we're going to give the most business exposure, leads and opportunities to the partners that really step up and become the most enabled.

VARBUSINESS: Our research consistently shows that one of the greatest obstacles solution providers face across the board is the time and expense of training and certification. How do you offset solution providers' ability to pay, in terms of direct cost and lost productivity, for training?

"The whole concept of feeding the strong perpetuates the 80/20 rule," says NetApp's Leonard Iventosch.

IVENTOSCH: The first key is that the partner makes a commitment to the vendor. Short of that, each partner has a number of different vendors that they work with. We've found that those looking at Network Appliance to fill out their line card are typically not going to be very successful. Our products require selling, so when a partner makes that commitment to actually become part of your extended team, it paves the way for a willingness to take on the enablement functions.

COOK: You ask the question of how to get a partner to commit time and effort to get the level of education they need. [Their effort] is directly related to the value that they perceive they're getting. We started with a very small group of partners in our sales-foundation courseware, and right now I would say that 75 percent of those taking the course are partners, and the balance are BMC employees. And it's got a payoff that I didn't initially realize. Because you work so closely together in teams, and you really demonstrate that you understand the industry that your solution maps to, the team ends up not being able to identify who's the BMC employee and who's the partner salesperson. And they develop relationships that last far beyond just the class. I've seen an interesting trend--a large number of partners teaming up with other partners once they understand the areas of specialization that they represent through the contacts they've made in this course.

VITAGLIANO: You still have to try to do some things to offset the cost associated with that, whether doing Web-based training and other things that allow people to stay in the office. Or maybe [you cover some of the expense] through MDF. The key is, when most partners rank what's important to them, training is right up there with pre- and postsales support. Most of them view it as a value-add and not as an issue associated with running their business or your program.

"We need to look at the programs we're running and help solution providers grow," says Ingram Micro's Kirk Robinson.

ROBINSON: What I'm hearing from resellers is that they have to make decisions on whom they choose to partner with. They can no longer get certified and have their people going through training for multiple vendor partners. The cost is too much; the time out of the office is too much. What they're looking for is the whole picture. If I'm going to get into this, how am I going to be profitable? And do I consider that vendor a partner who is going to be looking out for me and my best interest, whether it's post follow-up, pre- and post-sales support or MDF dollars or anything else? When they're looking at how they're going to go to market with their end user, they want to make sure they're aligning themselves with a vendor that has their best interests in mind and that's consistent with how they go to market.

VARBUSINESS: When growing and managing their channel programs, many vendors struggle with the 80/20 rule--the division between top-performing solution providers and smaller, harder-to-reach VARs. First, do you agree that the 80/20 rule is alive and well in the channel? Second, what are you doing to get beyond that first 20 percent?

VITAGLIANO: That rule absolutely lives, and it's pretty significant. In fact, [the ratio] might be closer to 90/10. We've spent a lot of time looking at the fact that we have a number of partners that are sort of in the 80 percent category--partners that we're just not driving very much revenue with, or none at all. So we're doing some propensity studies on these solution providers. For those that are doing some business with us, we're trying to find out what their natural groupings are. In other words, we're doing some profiling to figure out their buying behaviors--whether they're typically selling high-end security, low-end security and lots of services around solutions. Through the profiling, we'll get a sense of what their business looks like and what their business models are. We want to provide coverage for this group of solution providers a little bit more intelligently, beyond just calling everybody and supporting them, to drive campaigns to specific partners based on what we think their profile looks like and what we think they want to do. If we can do that effectively--and we're just starting it--it will make a major difference and begin to shift that 80/20 ratio.

KENNEDY: First of all, I would agree that it's more of a 90/10 issue that we face. But, really, you've got to look at two markets here. We've got emerging markets in a lot of our countries where we just don't have enough resellers. And there are clear opportunities for the partners to get onboard and expand business there. The bigger challenge, though, is ensuring we've got the right partners bubbled up to the surface by industry or by application or by product in the right regions. Then, we need to make sure that they're being properly rewarded for the investments they're making in training. The challenge becomes how to get the next farm system under them trained and really driven to the marketplace so they can take the place of top-tier VARs that do falter, or so they can penetrate the market even deeper.

NEXT: How vendors reach lower-performing VARs, plus brand balancing.