NetLedger Takes Aim At SMBs With New Channel Strategy

Program to include three reseller categories, higher margins

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To help drive sales of its Oracle Small Business Suite hosted accounting and CRM apps through the channel, NetLedger has developed a segmented channel program and is offering higher margins for its three categories of resellers.

"The challenge in addressing the SMB [market is reaching the customer," said Zach Nelson, president of NetLedger, based here. "It now appears the customer is reaching out less to vendors and big integrators and turning to people who really understand how to structure their business for the next stage of growth."

NetLedger just released the program, but partners are already giving it high marks. "They've shown me they're doing it right by increasing the number of [channel salespeople they've hired," said Ed Miller, general manager and vice president of Visionary Group, a Dallas-based solution provider. "The 30 percent starting margin is also unheard of."

To better serve the disparate group of SMB resellers, NetLedger divided its program into three categories. The Solution Provider Program is for VARs that have the capability to deliver a full accounting or CRM solution. The Certified Consultant Program targets consultants,as opposed to full-service solution providers,that deliver support and services for NetLedger products. The Trusted Advisor Program is targeted at influencers that recommend NetLedger products but don't necessarily implement a full solution.

"By redefining the programs into three groups, we're giving our partners options to sell what best fits their strengths," said Pat Ripepi, NetLedger's vice president of channel sales.

All levels include 14-day trial accounts, Web-based community and product resources, access to account teams, unlimited presales support, training and marketing funds. In the past six months, NetLedger also has doubled the amount of demand-generation funding it offers, Nelson said.

Margin is the big differentiator between the programs. The Solution Provider Program requires a $2,500 initial investment and includes margins that start at 30 percent, a free demo for in-house use and four customer demos. The Certified Consultant Program requires a $1,200 investment and includes 10 percent margins, a discounted demo suite for in-house use and two demos for customers. The Trusted Advisor Program carries a $300 charge and includes a discounted in-house demo and one customer demo. Both the Solution Provider and Certified Consultant programs also include unlimited technical support.

The Trusted Advisor level doesn't yield any margin. Instead, it is designed to introduce advisors to solution providers who in turn pass on consulting and assessment business, Ripepi said. The entire program is set up to facilitate partnerships among the different groups, she said.

NetLedger's Nelson: Companies are looking to solution providers to help cut costs.

Pricing for the suite starts at $1,200 per user and runs as high as $70,000 for an enterprise implementation. The products are fully scalable and include modules that can be added or subtracted to accommodate different business sizes.

"There's a shift in mindset from 1999 to 2002," Nelson said. "Companies bought so much technology that many of them are suffering from IT hangovers. Now they are looking to their solution providers and consultants to help them cut costs."

Because the suite is a hosted application, solution providers can expect recurring sales revenue when they re-sign customers. "The hosted model also opens up new opportunities for our partners because they can easily serve multiple inventory sites, satellite offices and retail outlets," Nelson said. "It gives partners a national footprint."

Jerry Freeman, CEO of e-Waken, a full-service consulting company in Chicago, said NetLedger's margins are better than those of his other vendors, and there is also less competition for NetLedger implementations. "The margins are actually higher now than my regular Oracle and PeopleSoft solutions," he said. "The software is also a breath of fresh air because it's a truly integrated solution that works."

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