Vendor Initiatives Provide Partners With An Edge In Tough Economy

With no sign of the economy turning around any time soon some, vendors are offering their channel partners assistance, from zero-percent financing to free training to help them keep selling in the midst of the deepening recession.

Offers of zero-percent financing from SAP and Microsoft have been among the most visible moves by major vendors in recent weeks to give channel partners more to work with in a very tough selling environment. Channel partners say customers are reluctant to make major purchases that require big capital outlays and the zero-percent financing makes it just a bit easier for get customers to sign contracts.

"The intent, of course, is to protect the cash outlay because right now cash is king," said Patricia Hume, SAP's senior vice president of the small and mid-size enterprise indirect channel. SAP began offering zero-percent financing for all its software products late last month, including the SAP Business One applications popular among resellers.

Earlier this month Microsoft similarly began offering zero-percent financing for new customers purchasing the company's Dynamics applications. The offer, good for 36 months, applies to licensing and first-year enhancement costs between $20,000 and $1 million. Solution providers said the offer helps them overcome customer hesitations and close deals.

Hitachi Consulting, which resells the Dynamics software, develops return-on-investment studies for potential buyers and Mike Gillis, managing vice president at the consulting firm, said the zero-percent financing makes those ROI numbers more attractive. "The return-on-investment calculation is more important today than ever," he said. "And the zero-percent financing certainly helps that."

SAP is also offering application packages, including services and special financing terms, designed to be especially attractive to customers right now. One package helps businesses manage cash, liquidity and financial risk, for example, while another manages data about spending on energy.

Hume said SAP is pilot-testing other initiatives to help channel partners close business deals, but declined to provide details. Some of those could be launched as soon as the first quarter, she said.

Earlier this month Hewlett-Packard began offering its "Total Care Access Card" which solution providers sell to their small-business customers for $49. The card, with a total value of $1,000, provides discounts and access to subscription services such as the HP Upline data backup and store service, a 90-day payment deferral, leasing rates of 4.9 percent, and free recycling of one PC through HP's recycling service. One channel partner likened the card to a coupon book channel partners can offer their customers to help close sales. That promotion lasts through May 31.

Next: IBM, Cisco Also Offer Partner Assistance

IBM has long offered its ISV partners a range of marketing assistance and other services and the vendor is on a crusade to get word out to its partners about what the company offers. "We are reaching out to our partner community right now and our message is how we can help them in these challenging times," said Chris Wong, IBM vice president of ISV and developer relations.

IBM, for example, offers partners a "virtual marketing department" that provides free assistance for planning marketing campaigns. The company even pays some of the costs of managing and executing marketing campaigns (such as mailings): up to 35 percent for Advanced members of the IBM PartnerWorld program and up to 65 percent for Premier members.

IBM is even offering free half-day classes at its 41 "innovation centers" to help educate business partners about what the company has to offer, Wong said. "We have all this stuff and our partners don't know how to use it. They've got to leverage us. This is the time."

Under its Partner Enablement 2.0 initiative unveiled at Oracle OpenWorld in September, Oracle is expanding the number of free "boot camp" training sessions it provides to implementation partners on such technology topics as application integration infrastructure, as well as on specific Oracle products.

And some vendors are cutting their channel partners some slack on bureaucratic requirements, letting solution providers focus on more important tasks -- like selling. In early November Ciscos Systems said it was letting some of its channel partners skip their annual certification audits in a move designed to help partners cut costs. Cisco said it would waive the audit requirement for one year for "partners in good standing" that have the correct number of certified personnel and are current with their specializations and training.

Cisco also said it would pay partners to perform network assessments for customers and would cut demo equipment purchase requirements.