Portal Market Poised For Strong Growth; Vendors Woo Channel

Research firms including Basex and Forrester Research foresee portals as the next critical step in enterprise IT strategy.

Forrester reports that while e-business spending is expected to drop 14 percent from last year, IT executives expect that more than one-third of Global 3,500 companies will purchase portal products this year.

Vendors and solution providers alike are focusing on fewer but more strategic partnerships.

Cambridge, Mass.-based portal vendor ATG jump-started a new channel strategy and reseller program in January 2002. PwC Consulting is the most recent company to sign a reseller deal with ATG, bringing the total new solution provider partners to 14.

ATG's goal is to have between 25 and 30 partners by the end of the year, said Al Stoddard, vice president of channels and alliances at the vendor. ATG hopes to move the percentage of the company's revenue through indirect channels from 5 percent to 15 percent by the end of the year and 25 percent as a long-term goal.

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"This is a very focused effort, and [partners should fit because of either an application expertise or a vertical market [expertise, such as what PwC does for insurance," said Stoddard.

Features of ATG's channel program already in place include technical training for a certain number of employees at no cost and additional employees at a discounted cost, workshops with partners at customer locations, field marketing programs and sales training, Stoddard said.

"One of the most important aspects is that this is done right," Stoddard said. "For every dollar that the business partner does, they get fully recognized for that business and they are not competing against other channel partners."

Stoddard said the discount structure, which is based on industry trends and the amount of business a channel partner does, is modeled after his work building the channel program for Lotus Notes.

McFadyen Consulting, a Vienna, Va.-based ATG partner for about four years and an ATG software reseller since January, has carved a niche through work with ATG and Interwoven, said Tom McFadyen, the company's president.

"Our focus on ATG has helped us grow and survive," he said.

While McFadyen Consulting's focus has been on ATG's e-commerce product, Dynamo, McFadyen said ATG's portal products are "catching up." He said he appreciates ATG's channel approach and the company's focus on eliminating the possibility of channel partners competing with ATG's direct-sales force.

"And while they've had some rocky marketing campaigns, like other companies everything now is on target," said McFadyen. "They've made adjustments to minimize possible channel sales conflict and the product is rock solid."

On the West Coast, Bill Yarnoff, vice president of alliances at San Francisco-based pure portal player Epicentric, said the company has dedicated the past 18 months to refining a new channel program.

Yarnoff said Epicentric has experienced a huge amount of traction, particularly through reseller agreements with large, global companies such as PwC, Accenture and EDS.

"Having organizations of that size and caliber now positioning Epicentric as a best-of-breed solution that manages Web initiatives inside and outside the firewall on an enterprise level is a powerful way for us to be in the game," Yarnoff said.

The investment is paying off in spades, he said. About 5 percent of Epicentric's revenue was partner-influenced before the company revamped the program, and that number rose to 54 percent by the end of 2001, Yarnoff said. Epicentric's goal is to be in the 55 percent to 65 percent range, he said.

The success of both ATG's and Epicentric's programs is attributed, in part, to changing attitudes on both sides of the channel, said Stoddard and Yarnoff. Vendors and solution providers alike are focusing on fewer but more strategic partnerships.

"Most IT vendors have come to the realization that you can have so many partnerships that none have any true value because you cannot really focus on making any one of them truly successful," Yarnoff said. "Times have changed."