Store This! Storage Partner Programs Review Part 2

Veritas Emphasizes Key Alliance
No two competitors display a more distinct difference in strategy than Veritas, the backup and recovery market leader, and Computer Associates, a software giant with serious storage aspirations. Veritas, the stronger and older player in the market, has clearly embraced the value mindset with its highly popular NetBackup product line for complex Unix environments. Last year, the company reduced its roster of top-performing partners from 900 to 350. Moreover, further reductions at the top levels of the Veritas Partner Program are expected.

Ironically, Veritas CEO Gary Bloom says he's eager to grow the company's indirect sales. Bloom explained to an audience of solution providers at GE Access' New Frontiers event last summer that his company is actively reducing the number of its certified partners in order to reduce in-house competition and channel conflict among its resellers. But that's only part of the equation.

"We saw a degradation in the implementation quality and the margin levels for our channel partners," says Michael Sotnick, vice president of partner sales at Veritas. "Ninety percent of those 550 partners didn't applaud the decision, but they understood."

Rather than help bolster the skills of all, Veritas chose to reduce ties to many and get closer to fewer rather than overdistribute its enterprise technologies. It's a risk because Veritas may miss out on an opportunity to get in front of the thousands of customers that depend on the solution providers Veritas dropped from its program.

The 350 enterprise partners that currently belong to Veritas' program are responsible for 55 percent of the company's revenue. Despite the massive reduction in enterprise partners during the past two years, the company has thus far been able to produce more channel revenue than before. One reason, in addition to the overall surge in demand for storage products, is due to the benefits Veritas lavishes on its top-performing partners. Elite Partners, which are required to sell at least $750,000 worth of Veritas products and services, get a plethora of marketing funds, resources and sales support. They are also eligible for 3 percent quarterly rebates.

Elite requirements are steep. Solution providers at the Elite level must have 75 percent of their sales staff trained as Veritas Sales Professionals, plus employ four Veritas Certified Professionals and maintain three platform/solution authorizations. Under the current program, Veritas storage integrators in the United States are served by "value" distributors, including GE Access.

But that's only part of the Veritas channel strategy. The volume business, which includes midrange products like BackupExec for Microsoft Windows, depends heavily on "volume" distributors, such as Tech Data and Ingram Micro. They serve the roughly 5,000 VARs that resell those products.

For 2004, Veritas expects to offer more benefits to Elite and Premier partners, leaving midtier VARs in the Select level to work with distributors and fend mostly for themselves. As such, the Veritas Partner Program is best suited to die-hard storage integrators willing to make a deep commitment to Veritas. But with the software maker's skyrocketing success, the Veritas Partner Program could be in high demand.

Veritas partners at the high end are enamored with the software vendor. Dendy Young, chairman and CEO of GTSI, a government integrator based in Chantilly, Va., says his Veritas business has increased dramatically this year. "They've been a great vendor for us," Young says. However, Chandler Group's Colbert advises anyone considering becoming a Veritas reseller to be cautious, mainly because of the company's track record. She recalls that Veritas inaugurated its reseller program in 2001. Then, a year later, "I went back to interview [executives of] the group and they were all gone... They don't have a good track record."

The VARBusiness take: Veritas has solidified ties to top performers with an effective enterprise program, but its de-emphasis of midsize allies will cost it in terms of missed opportunities.

CA's Open-Door PhilosophyUnlike some other vendors, Computer Associates is taking an entirely different approach to channel building and is embracing a wide range of VARs, rather than focusing on a small number of elite integrators, with a bold, new program.

The CA Channel Partner Program doesn't feature partner levels or tiered hierarchies. Nor does CA believe in charging fees for its program membership or technical and sales training, which is in stark contrast to other storage vendors. "We designed this program to provide significant channel growth and reward our partners investments with free training and support," says George Kafkarkou, senior vice president of CA's worldwide channel operations.

The reason the software company is taking such a generous approach to partners and working so hard to shed its channel-unfriendly reputation is because CA has highlighted its BrightStor business as a major growth area. It's already the company's biggest business in terms of revenue and partner head count; the company has approximately 12,000 channel partners throughout its six product lines, and the vast majority sells some type of CA storage solution.

Ira Simon, vice president of channel marketing at CA, says CA is gunning for high volume with products such as its ArcServe storage resource-management software to compete more effectively with Veritas. To that end, the company launched a two-pronged effort. First, CA replaced its direct-sales approach and employed its "Channel Preferred" strategy for BrightStor. The Channel Preferred plan teamed CA's direct sales force with partners to boost indirect revenue for the storage product line. Partners applauded the effort, but initial returns came up short as BrightStor sales didn't live up to the company's goal. Many solution providers felt the strategy was sound, but say the sales force simply did not execute in the field.

Afterward, the company regrouped and reintroduced the CA Channel Partner Program last summer. Instead of partner levels, CA simply offers two designations: Affiliate Partners, which are generally SMB VARs, and Premier Partners, which are typically larger integrators. Along with eliminating membership fees and performance levels for partners, the CA Channel Partner Program offers two compelling features in its Margin Builder Rebate Program and CA Lead Delivery and Management System, both of which are open to all Affiliate and Premier Partners. An Affiliate Partner, for example, can earn a 6 percent rebate on BrightStor sales for generating quarterly revenue of $35,000 or more. In addition, CA believes its new lead-management system will be a big draw for solution providers.

The CA Channel Partner Program is certainly unique when compared with other vendors, and shows an aggressive effort to boost channel sales. "Our No. 1 priority in 2004 is to gain market share, and it's our firm belief that we cannot do that without an active partner community," Kafkarkou says.

But will it be enough to attract solid VARs with a knack for storage? At present, CA currently lacks the high-bar certification that Veritas offers, but it has an advantage among midtier VARs with its open-door policy and alluring incentives. Instead of larger systems integrators, SMB solution providers such as 7Eplus in Redondo Beach, Calif., is the type of partner CA will likely attract. Alfredo Gonzalez, president and CEO of 7Eplus, has a history with CA and recently began selling BrightStor Mobile Backup. "The product is easy to deploy, and CA's partner program works well for us as a smaller, younger company," Gonzalez says.

The VARBusiness take: While CA and Veritas are competing for the same turf, they are targeting two distinctly different segments of the channel. The mainstream effort may not have the upscale feel that Veritas' program has, but it has a grassroots appeal. Just ask former Veritas allies looking to join CA's program.

Storage Partner Programs Guide