Channel Programs Respond To Changing Customer Business Environments

New business models and customer types are driving vendors to continually change their channel programs, with those changes being less about dollar incentives and more about finding new ways to partner with solution providers.

That's the conclusion of a panel of vendors discussing the evolution of channel programs with an audience of solution providers Friday at the Xchange Tech Innovators conference.

Channel program changes depend on both technology changes and on the need to get closer to solution providers, said Tom Fitzpatrick, director of field marketing at Kaspersky Lab, a Woburn, Mass.-based developer of anti-virus software.

"What we're hearing from partners is, touch me more," Fitzpatrick said. "It's not a conversation about incentives. Spifs are going away. Partners are saying, give me more training. Guide me. Help me figure out how to work more with my end customers."

As a result, Kaspersky is investing more in certification and training, he said.

For a hardware company like Cleveland, Ohio-based UPS and power management vendor Eaton, the move by customers and their solution providers to new computing models such as services and the cloud means it needs to look for ways to remain relevant, including bringing relationships with such partners as virtualization specialist VMware to its channel program, said Kristy Cornell, channel marketing manager for the U.S.

Cornell said that solution providers who consider leaving hardware sales to others such as Dell or CDW while focusing on services is not a good idea because of the risk of creating new competitors and the risk of losing future sales.

"Hardware is a sale, but there's a drag behind it of services down the line," she said.

Communications services is a relatively new product for the channel, and so the focus on channel programs in this area is helping partners wrap their own services around it and head for cloud computing, said Tristan Barnum, product line director for business product sales at Digium, a Huntsville, Ala.-based developer of VoIP and PBX phone systems.

"We can help partners wrap in custom development," Barnum said. "We help our partners understand how to sell it, and make money on it."

Joe Sykora, director of marketing at Fortinet, a Sunnyvale, Calif.-based developer of network security tools, hardware, and appliances, said his company is focusing its channel resources on developing an MSP program, and just last year initiated its first influencer program for MSPs.

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Developing a channel program suitable for the wide range of solution providers working with a vendor can be tough, Fitzpatrick said.

For instance, he noted that the Xchange Tech Innovators conference organized solution provider attendees into multiple segments of partners with similar business models, such as those with recurring revenue. "Even in that group, there were 20 different business models," he said. "It's hard to make a channel program that works for everyone."

In response to a solution provider who said it can sometimes be difficult to see how much a vendor supports its partners when it makes it possible for customers to buy their products direct from a Website, the vendors explained that in such cases, the focus is on simple products for home users, and not for products aimed at business customers.

Sykora said Fortinet is 100 percent channel focused, and so this is not a problem for his company. However, even if a customer finds a way to buy direct, Fortinet still brings the sale to the partner. "The key is to make relationships with the key people in each vendor," he said. "Relationships are important."

Barnum said that Digium has automated its back end so that it is easy to identify who the appropriate partner is and who should handle renewals. "We don't want to take money away from the partner," she said.

Kaspersky is 100 percent channel-focused in its B2B business by contract with its partners, Fitzpatrick said. "You can sue us if were not," he said. "There are some direct sales out there, but its a small part of our business."

Bob Nitrio, CEO of Ranvest Associates, an Orangevale, Calif.-based solution provider, said it is important to see how partner programs are continuing to evolve.

"The vendors know that if their programs remain static, they won't work," Nitrio said. "They are looking at the next step, and the next step, and beyond that. They know they need to change."

The panelists also made it clear they are not trying to cannibalize partner sales with direct sales to consumers, Nitrio said. "They're not like Dell, which makes no bones about its direct play," he said.