CRN Interview: Bill Botti, Alternative Technology

Alternative Technology is most often associated with its top vendor, Citrix Systems, but the Denver-based specialty distributor has other programs brewing in the networking and security arenas. President and COO Bill Botti, a former networking VAR who joined Alternative two years ago, recently met with Editor in Chief Michael Vizard and Editor Heather Clancy TO discuss how Alternative is building affinity with its most loyal customers and how it is pushing the envelope when it comes to the role of distribution.

CRN: What are you doing to help solution providers increase their value propositions? What are you taking off their back?

BOTTI: We created a Customer Partner Program. It's like a frequent flyer program: the more you buy from us, the more you attain rewards. For every $50,000 that a customer buys from us in products, services and education, we provide them with universal vouchers. How they use them is based upon their particular business model. They can use them for any class that we teach at our training centers. They can use it for airfare for the student. They can use it for on-site engineering. And they can use it for market development funds. The intent of the program was to reduce that barrier to new technology introduction to the VAR.

CRN: What are they worth?

BOTTI: If they use [the vouchers] for MDF, we'll give them $500 for every voucher. That's a pure 1 percent return. If they use it for classroom or an engineering day, and it's a $2,000 class or a $2,000 engineering day, then that's 4 percent on the $50,000 purchase price. It depends on how they accomplish that. They may use eight vouchers to have us bring one of our mobile classrooms to their facility to teach a class.

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Well, they may sell 12 seats. They then get the difference of all 12 seats, even though they may only be giving us eight vouchers to conduct a private class. So they are actually accelerating beyond the 4 percent.

CRN: How many VARs buy from Alternative, and how many take advantage of this program?

BOTTI: About 25 percent of our customers are eligible to be in the program, based on the volumes that they buy from us and [if they] participate in it, and [they] use it to varying degrees of success. Because in some cases, [if] they only earn one or two vouchers, it limits what they can do with it. Sometimes they'll use those to win a deal. If it's a Citrix transaction and it's a competitive, low-margin transaction, they can throw in training classes. So they can use the one or two vouchers for that. Each VAR uses [the program] in a different fashion for his model depending on where he's at in the marketplace.

CRN: What is your key value proposition?

BOTTI: Certainly the partner program I've described to you is one. We only carry about 35 lines, so it's easier for [our salespeople] to have a more in-depth knowledge about those lines. In the case of Citrix, everybody on our floor understands its licensing model, as complex as it is, without ever having to go to someone else for clarification. We provide free presales support, we also provide the first 30 days post-sales support. We've created support and engineering offerings that allow the VAR to make money.

CRN: What's next for 2004? Do you have some specific financial goals?

BOTTI: We're a $120 million company. We grew 12.8 percent last year, which is back into double-digit growth. In Europe a distributor is a trusted partner with a VAR,they do education, they do engineering, they go on-site with presales support calls with the VAR. %85 We're trying to evolve to that model. Last year, we sliced our account managers down to 50 and said, 'You need to go deeper into those accounts.'

And we created in the health-care and homeland security space a separate business development unit that now takes a set of solutions that aren't in distribution. We go into a healthcare provider and offer them compliance associated with the privacy component of the HIPAA rules. We're touching on everything they need to do. These are all things that are normally not done by distributors.