Citrix Eases Conflict

The strategy shift should help eliminate conflicts between volume licensing partners and the integrators and VARs that make up the Citrix Solutions Network, said Ross Brown, vice president of business planning at Citrix, Fort Lauderdale.

One of Citrix solution providers' top complaints is increasing competition from volume licensing players, or Citrix Enterprise Licensing Providers (CELPs), which typically offer clients steeper price discounts but do not offer services.

Paul Kunze, director of sales at IntraSystems, a Randolph, Mass., network and systems integrator, said, "When it comes time to purchase product, [the deal might go to the [customer's purchasing department to bid out. The channel loses out."

The CELPs include Software Spectrum, Software House International and ASAP Software.

"It's pretty shocking," said a source at one of the CELP partners, who asked not to be identified. "We do sell a bunch of shrink-wrap." Nearly half of the CELP's Citrix sales are boxed products, the source added.

CELPs will be limited to offering Citrix products through electronic licensing, Brown said, which is the "sweet spot" for them.

Citrix made the change after determining that customer satisfaction increases when solution providers are involved in initial sales, providing value-added services such as implementation and training, Brown said.

The move closely follows a revamp of the vendor's channel incentive program, which rewards solution providers for adding value rather than pushing volume.

Under the Customer XPansion Reward Program, unveiled Aug. 14, Citrix rewards partners with cash back up to 5 percent of their revenue for growing the number of "single customer touch points" quarter over quarter among their client bases, Brown said.

"[Multiple touch points may be at the same customer,the sales division orders product one month and the marketing department the next. Those are two different touch points," Brown said. "But if a client calls back up a week later and says, 'I need 20 more,' that's one customer touch point even though it's two orders."

Citrix has established a baseline for its partners using licensing information gathered from the last quarter's sales. Solution providers will receive a 1 percent reward for increasing their number of touch points quarter over quarter by 10 percent, a 2 percent reward for 20 percent growth and a 5 percent reward for 40 percent growth, Brown said.

Previously, Citrix rewarded solution providers with about $4,000 worth of free products for every $65,000 worth of products sold, a predictable program some partners used to create price wars, Brown said.

Citrix partners applauded the new incentives.

"What they're trying to do now is really encourage the value players to get good customer exposure through proofs and pilots," said John Arnold, president of DataLan, a White Plains, N.Y., integrator.