New Gateway Channel Chief Faces Challenges

In June, Tiffani Bova joined Gateway as its director of channels. She brings to the vendor years of experience in the channel, including a stint with a Web hosting firm and with a number of systems integrators including Vanstar, which she joined two weeks before it was acquired by Inacom. She recently sat down with Senior Editor Joseph F. Kovar to talk about Gateway's channel expansion plans.

CRN: Is it a challenge when you look at where Gateway's channel is today?

Bova: Challenge as in, it's hard work. Challenge meaning something that you can't accomplish? I wouldn't say that. But I'd say challenge in the sense that, rallying both internal and external forces and attention, and raising awareness in the marketplace around Gateway's ability to service this market. And then internally, getting people to think about solution providers and VARs in such a way that it makes it into their line of thought when they talk about their product road maps or strategies or promotions or value-add, that the consideration of channel is always in top of mind.

CRN: Where is Gateway's channel today?

Bova: Currently, we have a partner program called ProNet. ProNet was launched nine or 10 months ago. ProNet already has discounts for partners. We have a partner locator online. We have resellers that service both the public sector and the private sector. We also have pro-A/V resellers. The foundation is there. So now what we're really doing is building upon that foundation to grow it.

Currently, from a business standpoint, [Gateway] is about a $4 billion company. Half of it comes from the retail side, about $2 billion, and you've got about $2 billion of it from the commercial side. My team sits on the professional side of the house. ... And of that $2 billion, about 10 [percent] to 12 percent is currently being generated through the channel today.

CRN: I didn't realize it was that high.

Bova: No comment. And the good news is, it is that high. We have momentum in the channel. It's just a matter of harnessing that momentum and building upon it and really starting to identify ways that we can simplify resellers' ability to do business with us. We [need to] become a trusted alternative out there in the marketplace.

CRN: How is the acquisition of eMachines going to affect the channel? I ask because eMachines has always sold direct to retail or on-line, and in some spaces may even be bigger than Gateway. Does that bring in an element that makes it more difficult to work with the channel?

Bova: I don't believe so. EMachines is definitely positioned as a retail brand. And it's very focused in that sub-$700 price range on the consumer side. ... [Changes resulting from the acquisition] will give benefits to the channel. You've got quality that's improving. With the synergies of using the same chassis, you've got cost savings which can allow partners to make more revenue or margin from us.

Currently, our program delivers between 9 [percent] and 12 percent margins to our partners, which is aggressive"probably more lucrative than others out there. That's off of retail.

We need to focus on not only raising brand awareness in the channel, but also on educating the channel on what kinds of products and services we have to offer. ... Our networking products are really solid. Our storage products on the high-end; we partner with Hitachi [Data Systems]. The services that we deliver behind the scenes we partner with [IBM Global Services]. And some of our break-fix services as well. And on our server products, we're completely "Intel inside." So we partner closely with Intel on our products and designs.

When we start talking about those kind of things, people are, like, 'We didn't know your storage products are Hitachi on the high end.' We've also gotten into a place where we can find the right price point and the right value for the products. You can get storage products that are 3 terabytes for under $10,000. It's a really a great price point, a solid product, and it fits the needs of a medium business. And it's just not known in the channel, the depth and breadth of our product line.

We can give an end-to-end solution. We can go from the desktop all the way back. There's really a great opportunity to expand the awareness outside of desktops and notebooks for Gateway.

CRN: Have you met with channel partners yet?

Bova: I have. And what's really great about Gateway's channel partners, I must say, and it's unusual for me to hear, is you've got some people who literally say to me, 'I'm 100 percent exclusive to Gateway' or 'I've been a partner with Gateway seven years and I'm loyal to you' and 'I really want you to succeed. ..." And they're committed to being here for the long haul.

CRN: On the pro-A/V side, the consumer space, the convergence of the digital and analog world, where does the channel fit?

Bova: The convergence strategy for Gateway at this point is one that really wraps around convergence products, or products that are going to use a PC to make them function vs. ones that are not PC-needed. We're a PC company. [We said we're] getting back to basics and making sure we're focused and simplifying everything, the heart of it is the PC. So when we're looking at convergence products, we're looking at those that require the PC to make it run, or update themselves, and so on.

What I've noticed lately is that we've had a tremendous amount of uptick in our plasma [display] offering. And it's actually pulling behind it servers and desktops, where you might think it'd be the reverse. You might think, well, OK, I'm gonna get a desktop, OK, I'm gonna get a server, and, oh yeah, maybe I'll toss in a plasma. But as businesses start to get more visual in their marketing activities"hotels, banks, restaurants, everybody's got plasmas"they need to be operated and run from something. It's usually a server or a desktop. And hence, we've been pulling our core business from the plasma side. Is our A/V portfolio going to be as robust as it has been in the past? Ah, no. How it fits within the channel is that as solution providers start to broaden their portfolios to include some of these A/V products, we're able to offer them [products] that are core.

CRN: Any changes to Gateway's channel programs?

Bova: [We just launched] an associate member program. Within ProNet, we had two levels, and now we're adding a third level. It's for the smaller-size VARs who will have access to an online quoting and ordering system to order products from us. They won't necessarily have an outside rep or an inside rep assigned to them. [The target VAR is] someone who is quite small, and wants to get just one desktop or one notebook. A very small type of product movement. But yet, we don't want to pass on that. You have some rural VARs who have only three people in their office and who wouldn't necessarily qualify for our tiers. So we wanted to make one for VARs who focus on the 'S' of the [SMB].

CRN: What two levels do you currently have?

Bova: We have a member level and a premier level. And the difference between those is the premier level member commits to $250,000 [in Gateway sales] per quarter and has an outside rep and an inside rep assigned to them. The member level is $50,000 per quarter, and they have an inside rep assigned to them.

CRN: Before the associate level, how did you handle those smaller orders?

Bova: We almost didn't. I don't want to say we didn't. But we didn't do it very efficiently. Let's put it that way. Sales reps are sales reps. They're going to spend time on what gives them the biggest bang for the buck. So we missed out on opportunities. My saying is, 'Do you always want to go for the home run? Or do you want to go for singles and doubles?' The associate level, in my mind, is going for the singles and doubles.