Gateway Revamps Channel Program

The Poway, Calif.-based company is still tweaking the program and plans an official launch sometime in October, Errett Kroeter, Gateway's director of partner programs, told CRN.

As of now, Gateway is establishing a channel-neutral sales model to avoid conflict, strengthening its back-end systems and online databases to collect deeper and more accurate solution provider information, developing training programs and possibly a home networking certification, deepening ISV partnerships and broadening its government and agent programs, Kroeter said.

The company is also coordinating tighter relationships between local solution providers and the managers of Gateway's 190 retail stores, which solution providers use as meeting and demo centers and services generators.

"I have a ready-made showroom and I don't even have to vacuum," said Ted Hunter, general manager of Champion Networks, a Brunswick, Maine-based solution provider that works with the Gateway's Portland, Maine, store. "The fact that I can bring clients to the store, where the solutions are already integrated, is hugely impressive. It has helped us win a handful of accounts."

Under the program, solution providers can expect to earn between five and 10 points on product sales and about 80 percent of services revenue, sources said. Gateway, as in past programs, holds the inventory, ships the products and bills the customer. Regional sales managers and local store managers pass services leads through their solution provider partners.

"We have had issues in the past with pricing parity and the [different Gateway] channels weren't communicating, so we had people competing against each other," Kroeter said when asked how the company, a pioneer in direct sales, would avoid sales conflict. "We want to take that competition out of the equation because it doesn't do any good for anybody."

Gateway said it will continue to sell direct. Solution providers said its current program, the Network Service Provider (NSP) program, has been successful. However, the company wants to use its new program to streamline solution provider services and align its sales and management teams with the channel, Kroeter said. Gateway currently works with about 1,000 solution providers but plans to weed out some of those, recruit new partners, and bring the number up to about 1,500 within a year, he said.

Hunter, who has been a Gateway NSP for about a year and provided input into the new program, said it is well-suited for solution providers with about 15 employees that serve niche markets and have difficulty establishing credit with top-tier manufacturers.

"The program puts the power back in the control of the VARs," Hunter said, adding that Gateway's credit terms are comparable to those of other manufacturers. "The beautiful thing about Gateway is they listens and make intelligent decisions."

Kevin England, CEO of The IT Group, Agoura Hills, Calif., said Gateway is proving its commitment to solution providers by recently hiring Kroetter and Steve McAllister, general manager of alternate channels, to drive the new program. They will report to an executive vice president in Gateway's professional division, a position the company is looking to fill. Meanwhile, Gateway CEO Ted Waitt is overseeing the role.

"Right now everything is going well [with Gateway]," said England, who has worked with the company for more than four years. "We initially went through our ups and downs, but now the process is very straightforward and simple. They've been excellent."