QLogic's Enhanced Channel Program Stirs Controversy

The original intent of the change, which would allow multiple partners to register the same deal, came as a result of bringing together multiple different programs into a unified Signature channel program, said Kara Montgomery, channel marketing manager for the storage vendor.

Allowing multiple deal registrations is quite common in the high-performance computing (HPC) market because most of that business is conducted on an RFP, or request for proposal, basis, Montgomery said.

Howie Evans, vice president of Dallas Digital Services, a Colleyville, Texas-based solution provider and QLogic partner, said such a change would hurt storage resellers who did the work in getting the customer interested in the QLogic product.

"For a small VAR like us with large accounts, it could have hurt us by allowing competitors to come in and drive margins down," Evans said. "QLogic didn't prove to me that they were protecting us and our efforts. In tight times, we need margins more than ever."

It could have made it easy for solution providers to lose several months of work to someone who sniffed the opportunity, said Jim Sacco, president and owner of IOvations, a Burlington, Mass.-based solution provider and QLogic partner.

"I might be working a deal for three months, and then someone else comes along and tries to register the deal as well," Sacco said. "I'm not sure if my deal registration discount is enough to protect me in that case. It's common for customers to wait three months or more to decide on a purchase, especially in this economy."

Based on such feedback, Montgomery said QLogic will keep its original deal registration program under which the first solution provider to register an opportunity gets the discount, except in the HPC market where the existing multiple deal registration program will remain in place.

QLogic will also guarantee that the partner who registers a deal will get the best pricing, Montgomery said. This will help protect partners from losing a deal to a larger reseller who because of its size might have a bigger discount than even what is gained from registering the deal, she said.

Other changes to QLogic's Signature channel program sparked less controversy.

One change welcomed by partners is that the vendor will credit partners with sales of QLogic products sourced from storage and system vendors such as Hewlett-Packard, Hitachi Data Systems, or IBM. Since such partners will also participate in benefits from the system vendor's programs, they in essence will be "double-dipping" in terms of channel program benefits, Montgomery said.

QLogic is also changing its channel program from one which tiers benefits based on revenue to one based on how much partners focus on selling its products within certain tracks, including SAN, HPC, and Ethernet and Fibre Channel over Ethernet (FCoE), regardless of their revenue, Montgomery said.

"So now we will be rewarding partners for being loyal to QLogic, and selling our entire product line," she said. "It will be exclusivity-based, and they will have to show a certain percentage of their sales are QLogic products."

She declined to state what the extra benefits of the provision are.

Mid-tier and smaller partners who go for exclusivity or near-exclusivity could find the benefits give them the edge over other solution providers, said Scott Genereux, senior vice president of worldwide sales and marketing at QLogic.

"The big guys get the benefits, too, but they can get all manner of benefits anyway," Genereux said. "This is our way to show our loyalty to the guys who work with us."

Also new is a shift away from onsite technical training to a virtual training system which allows engineers to attend classes from home at times convenient to them in order to cut down on their travel time, Montgomery said.

Engineers familiar with QLogic products can also test out of many certification classes, she said.

Sacco said it helps that QLogic brought its different channel programs into a single program, making it easer to follow, and that there is less focus on revenue level in terms of benefits solution providers can expect.

Evans said he is unsure about how some of the other aspects of the program besides the deal registration issue might impact loyal solution providers.

For instance, he said, QLogic has not discussed what rebates partners who sign an exclusivity agreement with the vendor might receive.

"It's almost like they've thrown the channel program out to us to see how bad it is," he said.

The changes to QLogic's Signature channel program come in the wake of several recent changes to QLogic's sales model and channel executives, Genereux said.

The last 60 days have seen QLogic move from a sales model in which its reps focused on particular OEM partners or solution providers to a territory-based model in which reps drive business to solution providers in their area regardless of whether it goes direct to the partner or through systems resellers like HP, Hitachi, or IBM, he said.

QLogic also now compensates its sales reps regardless of where the solution provider sourced the vendor's products.

"This gives partners a lot more flexibility," Genereux said. "In the past, our guy might be comped to specifically drive HP business. But that wasn't natural."

QLogic has also fleshed out its channel team both in North America and worldwide with several recent hires, Genereux said.

These include Jim Rothstein, formerly of Brocade who now handles North American sales; Karen Selig, a former Hitachi Data Systems executive who is QLogic's new director of OEM sales; and Martin Darling, the company's new vice president of Asia-Pacific sales.