Siemens Enterprise Communications: 'We're Very Serious' About North America Channel

It took a few years to get its ducks in a row, but Siemens Enterprise Communications is poised to enter 2012 a legitimate contender in the North America unified communications market. Its channel stock is rising, and it's taking advantage of turmoil in the Avaya and Cisco channels -- and perceived confusion over Microsoft's UC play -- to inject itself into the conversation in ways it wasn't able to in the past.

"We are slowly starting to show through our customer contributions that we are getting hard-fought wins," said Andy Howard, vice president of channel collaboration, in a recent interview with CRN. "We are a serious player in this market."

The company has spent a lot of time over the past 18 months tweaking its channel program to be a better partner for VARs. Siemens, for example, is now aligning its direct sales force with many of its large enterprise customers -- a named account strategy, in other words -- but all other Siemens accounts are fair game for solution providers.

That's a big difference from the past, noted Patrick Kehoe, senior vice president of strategy, planning and indirect business. Previously, partners weren't always sure where they could play with the vendor. But Siemens is now actively shifting ownership of its non-named accounts to channel partners, and expects those partners to take the lead. It's also expanding how it covers SMB customers through a recently activated distribution relationship with Ingram Micro.

"The clarity of the model has been sub-optimal," Kehoe told CRN. "So we needed to distribute formal rules of engagement, get very proactive with partners, and show our commitment to a multi-channel strategy. If we're truly clear in what the role of partners is for [Siemens], partners will invest and they can rest assured that their investment is a good one."

Siemens Enterprise Communications' indirect channel revenue is now 25 percent, and as of December, the company has 186 registered U.S. partners. Siemens Enterprise Communications itself has grown 50 percent in year-over-year profitability, and its top six partners -- which include major service providers like AT&T, Telefonica and Verizon -- have collectively grown their Siemens communications revenues 40 percent in the past year. Licenses sold of Siemens' OpenScape UC platform to SMB customers have grown 47 percent year over year.

"We want to engage channels to drive evolution of change to new technologies the Siemens way," Howard explained. "It's not a rip-and-replace. It's not a homogeneous connectivity."

Next year will see the continued evolution of Siemens' Go Forward! channel program following a big revamp this past year, Kehoe said. The company in 2011 added demand generation tools, an expanded partner portal, more online technical training, an online partner fund sand new specializations around cloud and UC applications.

The overall goal is to move from the transactional reseller type of channel model Siemens Enterprise Communications had when its channel program launched in 2006 to what Kehoe and Howard called a "collaborative model" for solution providers focused on hybrid and cloud-based UC deployments, annuity revenue streams and managed services.

"We want to pick the right handful that have the IT capabilities but are also more vertical players that can drive the integration of voice and UC capabilities and embed them in business processes," Kehoe said of the partners Siemens is looking to recruit. "The worst thing we could do right now is just add 500 partners. We want them to be trained to go out and sell Siemens and build business mindful of us as a serious contender. We've had great engagements with partners who understand we can be a threat to incumbents like Avaya."

Siemens signed an agreement with Ingram Micro in October, and Kehoe and Howard said Siemens opted for Ingram based on its reputation and also the fact that Ingram's rivals, from Tech Data to Westcon Group, are tightly tied to many of Siemens' UC competitors.

"They were very interested in us and because of their cloud and telecom solution and enablement tools, we are agile enough to change our shape to fit them," Kehoe said. "It would be more complicated with the Tech Datas and the Westcons."

Siemens will continue to invest behind OpenScape, the UC platform that has won raves from engineers and solution providers thanks to its open-standards approach and easy integration with customers' existing network infrastructure. Among the major updates to OpenScape this year were a desktop video conferencing element and a session border controller.

"We've remained pure to our belief of open technology. We can be the game-changer here," Howard said. "If you've been a Nortel customer for the past 15 years and are now going to release that [technology] after all that time, what are you going to do for the next 15 years? There's a lot of space here for us when you factor in the cost of moving to an Avaya platform or a Cisco platform or a Microsoft platform as opposed to a Siemens platform."

Competitors too often try to paint Siemens as having a stronghold only in Europe and other parts of the world, Howard said.

"The best they can say of us is that they haven't seen us in North America for some time," he said. "And Microsoft, I think Microsoft has banged the drum a little too hard of 'We're Microsoft' thinking that people will hear that and say, 'OK, where do I sign.' It's a different industry now. We are a very serious player, and when it's come down proof, we have it."

Next: Siemens and Enterasys

Kehoe and Howard also acknowledged the ongoing question of Siemens Enterprise Communications' relationship to Enterasys, the data center-focused vendor that Siemens part-owns as part of a joint venture with the Gores Group. Enterasys has been busy building its own channel behind its revamped Advantage Partner Program. Two years ago, Siemens executives told CRN that Enterasys would eventually be folded into the Siemens brand, but last year, told CRN that the two channel organizations and go-to-market strategies would remain entirely separate.

Kehoe and Howard said there's probably an appropriate middle ground, and Siemens Enterprise Communications is exploring that. Several big changes that have happened internally are that Siemens and Enterasys now share back office functions like compensation and crediting, and also have a common set of distributors. It's not out of the realm of possibility, said executives, that partners with the means to sell integrated Siemens and Enterasys technology bundles will be rewarded for that competency.

"We're driving some cross-pollination," Kehoe said. "From a marketing perspective, there is a value proposition around the whole solution. We have looked at integrating the programs and there are some discussions going on, but philosophically they are very different. We've done the things that are easier to do and we are looking at the value of doing more of that."