Progress Takes Unique Approach To Channel

Partners often describe it as unusual.

Take, for example, Progress' recent acquisition of application infrastructure provider Allegrix. It seemed a little odd for a software company to get into the data-center business, but Progress executives explained that partners were asking them to provide a hosting home for their ASP offerings.

"They went out and made this investment [in Allegrix because it allowed us to add value," said Mark Jennings, co-founder of property management application developer Jenark Business Systems, Gaithersburg, Md. "How often do you see vendors making that type of an investment for their partners?"

In its 20 years in business, Progress has made many of these investments in its ISV channel,and has lost a lot of direct revenue to these partners as well.

Something that, again, you don't often see software vendors doing, but it's all part of the plan, Alsop said.

"To have a win-win [relationship means giving up margin and revenue to the partner, but from the customer perspective, you know that what the partner brings to the table in terms of vertical expertise and knowledge of the customer's business problems will, in the long term, gain you larger market acceptance," Alsop said.

The mistake many software vendors are making during the economic downturn is taking revenue away from the partner to meet short-term revenue goals, Alsop said.

"If you are taking the short-term approach of squeezing more revenue from your partners, in the long term how many ships does this float?" he said.

Alsop's "unique" approach has led to almost two-thirds of Progress' $262 million in revenue in 2001 being generated by the channel.

Progress also believes that ISVs should not have to rewrite applications when the vendor releases a new version or new delivery mechanisms for technology becomes available.

"We don't have to throw away the years of investments we've made in our applications," said John Cutsey, president of Cutsey Business Systems, an ISV in North Bay, Ontario. "Progress does all the backroom work to make sure the application we've developed still works in new environments, and they help us evolve our applications while still maintaining the business logic of our applications."

Progress calls this strategy "future-proofing," which allows partners to extend applications to the Web or take advantage of other vendors' technologies such as Oracle and Microsoft .Net, for example, without having to scrap the business logic behind their applications.

Future-proofing initiatives extend to helping ISV partners Web-enable applications. The company's ASP Enabling and Empowerment Centers (ASPen) initiative is designed to walk partners, from both a business-model and technology perspective, through the process of transforming client/server applications into applications accessed online.

Cutsey Business Systems, which has developed ERP applications for the past 22 years, recently Web-enabled its applications with the help of Progress engineers.

"Web-enabling our product came from their engineers," Cutsey said. "A crew of their consultants came into our little town and helped us build the first [e-commerce piece of our offerings, and it's skyrocketed from there."

The move was so successful that Cutsey landed an e-commerce contract with shoe manufacturer Adidas. Although Progress was largely responsible for this high-profile win, the company ultimately opted to downplay its role, Cutsey said.

"They put out a release and could have called it a Progress win, but our name was on the release," he said.