SAS Drops Customer-Size Restriction For Channel Partners

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While channel executives at the Cary, N.C.-based company say they are generally satisfied with the channel program's results so far, senior vice president and chief marketing officer Jim Davis says the company -- which develops sophisticated business intelligence and data analysis products -- is still wrestling with some aspects of the program.

"It's still a work-in-progress," he acknowledged in an interview at this week's SAS Forum customer and partner conference in San Antonio. But he's quick to add: "The commitment is there, 100 percent. It's not an experiment."

SAS began its partner program in late 2006 in a bid to expand sales of SAS software, particularly into SMB markets. Before that SAS sold its products exclusively direct, largely to big companies.

"I feel the program is in pretty good shape," said Russ Cobb, vice president of alliances and product marketing, in an interview at SAS Forum. But while he called the program "moderately successful," he also said that so far the effort hasn't provided the lift in SMB sales the company had sought.

SAS has been recruiting channel partners and its partner roster now stands at 120 to 130 partners. But as recently as last September the company expected to have as many as 150 signed up by the end of last year and 200 to 250 by the end of 2008. Cobb said SAS has been very selective in its recruiting and has been culling from its ranks as many as seven or eight partners every quarter that fail to meet SAS's sales and demand-generation requirements or investing enough in marketing and training.

In a significant change, Cobb said SAS is eliminating the $500 million ceiling it placed on the size of companies channel partners could sell to. (SAS's direct sales representatives largely sold to larger companies, but also could sell to existing accounts of all sizes.) Solution providers chafed under the restriction, telling SAS that nearly half their sales were to companies with sales greater than $500 million.

But while that removes all sales restrictions for channel partners, SAS's new plan is for its direct sales force and solution provider partners to work together on accounts, utilizing sales and technical resources from either one or both as the sales situation requires. But Cobb says the SAS sales force will actually own the accounts. Sales efforts also will be re-aligned more along vertical markets rather than geographies.

SAS also has been making changes to its partner program management structure. While Cobb still has overall responsibility for channels and alliances, Karl Schlatzer, director of OEM sales and business development, strategic alliances and channels, will directly manage the program.

Cobb says the changes, which the company has been implementing during the last couple of months, are "much more efficient" and "much more aligned with the way the world works."

Davis acknowledges that the new approach will require more coordination and oversight from SAS management to avoid channel conflict. SAS, for example, will put more emphasis on its deal-registration system. And he says SAS has to do a better job of "monitoring the quality" of incentives the company has offered its own sales representatives for working with channel partners.

Eric Skaggs, business development manager at ThotWave Technologies, a Chapel Hill, N.C.-based solution provider and SAS partner, said under the original program practices it was sometimes difficult to know who to work with within SAS sales operations. The changes "make it a little easier for us to bring opportunities to SAS without that limitation." But he added that working with channel partners is a new concept for some members of the SAS sales force. "It will take some getting used to. It's going to be an education process," he said.

"I'd love to see more activity on the lead [generation] side," said David Septoff, CEO of Zencos, a Cary, N.C.-based solution provider and SAS channel partner, anticipating more coordination with SAS sales representatives. An ex-SAS employee, Septoff had relationships with people inside the company before the partner program was launched, but the program as originally designed had the potential to muddy the direct sales-channel partner relationship. The new approach "has helped clear that up for us," he said.

Both channel partners approved of removing the $500 million-company restriction. ThotWave already sells to many large companies and Septoff said the restriction raised questions about how to handle growing customers.

SAS is also planning to greatly expand the size of its direct sales force this year, Davis said.

Last year the company made changes in the components of the pre-configured software bundles sold through channel partners because some products were too complex for the channel. "I think we've learned a lot," Davis said of the company's channel efforts so far.

Cobb said the goal is for the channel to account for 15 to 20 percent of SAS' new sales by 2010.