Early in 2010 NetSuite CEO Zach Nelson got a lot of people's attention when he declared: "If traditional midmarket VARs don't change to meet the demand for cloud computing solutions, they will go out of business."
That was followed up with an offer to allow channel partners to keep 100 percent of the first-year subscription revenue generated by new customer contracts for NetSuite's on-demand ERP and CRM applications.
The moves by NetSuite were significant for two reasons: After years of questions about the role of solution providers in cloud computing, Nelson & Co. made a bold statement that cloud vendors and solution providers do indeed need each other. More broadly, it was representative of last year's trend of IT vendors going to the next level to provide channel partners (or at least those deemed worthy) with the resources and incentives they need to be successful.
The 2011 Partner Program Guide that follows offers solution providers the information they need to evaluate IT vendors they already work with or are considering working with. The guide is based on detailed applications vendors submitted outlining all aspects of their partner programs. Everything Channel Research crunched the numbers and designated some programs as 5-Star Partner programs. That listing begins on page 20 and expanded charts are available online at www.crn.com.
The vendor applications also offer a snapshot of the current state of IT vendor partner programs and provide some eye-opening insights into channel trends.
Take cloud computing. The PPG applications showed that 68.1 percent of vendors now offer VARs training and advice to help them better understand how they may incorporate cloud solutions into their current offerings.
That is in line with recent announcements from such vendors as Cisco, IBM and SAP. Earlier this month, for example, Cisco rolled out an ambitious and comprehensive package of offerings to help partners build profitable practices selling cloud infrastructure and services. Also this month, SAP debuted a program to provide partners with training and lead-generation assistance in an effort to encourage them to carry the Business By Design on-demand application suite. And in February, IBM offered new training, technical, sales and marketing resources to help channel partners expand into cloud computing.
"Our job in this is real simple: Lower risk and lower investment costs," said Taylor Macdonald, vice president of channel at Intacct, a supplier of on-demand financial applications. To recruit resellers, the company now provides a week of hands-on technical training at its San Jose, Calif.-based headquarters and a 20-part sales training course via the Web. Intacct's professional services group assists with a partner's first Intacct implementation. And Intacct sales representatives are assigned to work closely with a partner's sales force.
Vendors' expanded assistance for channel partners isn't focused just on cloud computing, however. IT vendors in general, and those with programs deemed 5-Star in particular, have really ratcheted up the services and resources they provide to resellers.
Vendors this year seem to be placing greater emphasis on working with the VARs they already have, rather than recruiting additional resellers, and providing the help solution providers need to grow their businesses and expand into new areas.
That resonates with Alex Rooney, vice president of Vision33, an Irvine, Calif.-based solution provider and close SAP partner.
"When you're a small business, what the vendor or [software] publisher provides is an ecosystem that nourishes and fosters business opportunities," he said. Rooney said vendors should be doing everything they can to make their partners "scalable and profitable"--something he said SAP is doing as the software giant increasingly turns to its resellers to help it meet its growth goals.
More than 50 percent of all companies (and nearly 60 percent of those with 5-Star programs) are providing training to help partners transform their businesses to capture a greater share of the services market. Nearly 72 percent of vendors (and almost 80 percent of 5-Star vendors) offer information to help horizontal VARs break into vertical markets. And more than 50 percent provide training to simplify the concept of hosted and managed services for VARs.
More vendors, especially those with 5-Star channel programs, also are making more marketing resources available to partners. This year's PPG shows big increases in the number of 5-Star winners offering research (62 percent vs. 30 percent last year), outsourced market services (59 percent vs. 38 percent), campaign design templates (90 percent vs. 70 percent), and logo and branding assistance (90 percent this year).
Eighty-eight percent of channel programs offer some kind of market development/co-op funding, according to the vendor applications. But vendors are going beyond just providing the money. Sixty-nine percent make field marketing managers available to MDF-eligible partners to help them plan and execute demand generation campaigns. And more than 77 percent of IT vendors (almost 93 percent of those with 5-Star programs) go the extra distance by helping partners track their MDFs.
The expanded vendor-to-partner assistance even extends to such basic blocking and tackling tactics as sharing with resellers more information about upcoming product releases. Where the focus before was on alerting partners one month or less before a product debut, the percentage of vendors providing briefings between one and three months in advance jumped to more than 60 percent for all vendors (nearly 63 percent for 5-Star programs).
About one-third of all vendors generate sales leads only for their top-tier partners, while more than 60 percent of 5-Star programs pass along leads for top-, second- and third-tier partners (just over 50 percent for all vendors).
"Leads are always important. Leads always come to the top of the list," said Vision33's Rooney.
An analysis of the PPG statistics also illustrates how wide the difference is between vendors with 5-Star partner programs and the rest of the pack. Take attached services, for example. The percentage of 5-Star partner programs with specific initiatives to help partners increase their services attach rates, such as partner services training or value-based pricing, is generally 20 points higher than programs that are not 5-Star.
Vendors with 5-Star programs are likewise far more likely to offer partner assistance in hiring professional talent. The percentage of 5-Star vendors that pass along resumes from their own applicant pool (41.2 percent) is more than double that of non-5-Star vendors. And 23.7 percent of 5-Star vendors help write job descriptions, compared to only 3.0 percent for other vendors.
Other telling facts from this year's PPG:
More than 20 percent of all vendors say the value of services attached is more than $3 for $1 of product sold.
Ninety percent of all partner programs have multiple tiers.
While virtually all vendors offer pre-, post- and technical support, only 68.7 percent have rules of engagement for managing direct/indirect channel conflict. (Only 76.3 percent of 5-Star programs have such rules.)