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CA Technologies is overhauling its partner program as the company expands into cloud management software and targets prospective midmarket customers it has largely ignored until now.
Problem is, CA historically has had a less-than-stellar reputation as a channel-friendly company. But partners attending the CA World conference in Las Vegas this week seem impressed by what they have seen so far.
"We're making a pretty big bet with CA right now on their strategy and their vision," said John Ross, CTO at GreenPages Technology Solutions, a Kittery, Maine-based solution provider that joined the vendor's partner program in February.
Up to 85 percent of CA's sales today are to Fortune 1000 companies. And of the company's $4.4 billion sales in fiscal 2011, some $2.5 billion was mainframe management and related software.
But at CA World company executives made it clear that's all going to change.
CA has spent some $2 billion in the last two years acquiring a number of cloud computing management software developers, including Nimsoft, Interactive TKO (ITKO), 3Tera, Arcot Systems, and Oblicore. And the company's ability to offer an end-to-end cloud management system is an attractive proposition for solution providers
"As this IT, cloud service consumption model changes, our ability to consult with our clients and help them build a transformation model for delivering and consuming their own IT services is critical to the private cloud. And we have partnered with CA to really provide that cloud [management] stack for us," said Mike Martin, vice president of cloud solutions at Logicalis, which began working with CA a year ago. "It's a really integrated platform."
Also fueling CA's channel initiative is the changing demographics of its customer base. Adoption of cloud computing and Software-as-a-Service is catching on more quickly among mid-size companies -- defined by CA as those with annual sales between $200 million and $2 billion -- and that adds up to between 7,000 and 14,000 tech-savvy, midmarket companies with significant IT budgets the vendor is currently not reaching, said George Fischer, executive vice president and group executive, in comments during a channel partner session on Sunday at CA World.
And CA understands that it will need the channel to reach those customers.
"Going forward, the channel is a very important part of what we are doing," CEO Bill McCracken said in a press conference at the show Tuesday, echoing comments he made at the earlier partner session and in his keynote speech Sunday.
"We're doing this because of the transition that's happening in those midmarket accounts with respect to cloud and SaaS. It's a big, open opportunity for us and there's significant demand for our products there," he said. And because those mid-market customers are largely serviced by solution providers, systems integrators and -- increasingly -- managed service providers, the channel plays a major role in CA's strategy, the CEO said.
Until recently CA did not have a unified channel program, instead organizing channel initiatives along product lines and business units. Partners focused on reselling the vendor's commercial products, such as the ARCserve backup and recovery software and the ERwin data modeling line of tools, through a two-tier distribution process.
Still, CA's worldwide channel sales have been in the range of $500 million, said David Bradley, senior vice president of global channel sales, in an interview. "It's a reasonably well-kept secret how much business we do with partners today."
Solution providers are evolving, focusing less on implementing IT infrastructure and more on providing services, Bradley said. Throughout CA World company executives put a great deal of emphasis on managed services -- either recruiting managed service providers to join CA's partner ranks or helping current partners evolve to add more services to their offerings.
"As we talk about growing our market share in the midmarket, whether that's through an on-premise model or through a managed service-provider model, our intent is to do that predominantly through partners," Bradley said.
McCracken, in his speech to partners, said channels sales could eventually account for 30 or 40 percent of CA's revenue: Bradley said it could even exceed 50 percent within a few years.
Next: Still Working On The New Channel Program Details