We look at partner programs from 10 cloud vendors that will arm partners with the tools, support and revenue to be successful in cloud computing.
Apple doesn't often buy companies, and it's almost always tight lipped about how they'll fit into its strategy.
FileMaker Pro 11 has arrived, and we had a chance to try out some of the new features.
My first proof point on how important the channel is or isn't to this company comes in the form of a question. Why didn't CEO Paul Maritz attend the company's recent worldwide partner event? The company says he was in Europe doing some "presentations." Translation? The indirect channel and all the business it creates and drives for VMware isn't important enough to the CEO to make sure his schedule coincides with the event that the company schedules at its convenience months and months before it happens.
Then there is the Microsoft threat. I've seen the boys in Redmond come late to the dance before, but somehow by the time the music stops the company generally figures out a way to go home with the pretty girl.
Late on word processors but owns the category. Late on spreadsheets; owns it now. Late on Web browser; dominates it now. Late on network operating systems and a dozen other things we don't need to get into. The only place it has consistently underperformed is in the consumer space.
But the market isn't as easy to maneuver as in the past, and Google is cleaning Microsoft's clock in search, you might say. However, when it comes to virtualization and ultimately cloud computing, Microsoft is fighting on a battlefield it knows all too well. VMware should liken it to the faint sound of bagpipes approaching on battle day and how they can sound eerie and unnerving as they get closer.
The cloud poses a new threat to Microsoft and its traditional model, with its profit coming from licensing software. Furthermore, virtualization is an important step toward the cloud, and VMware got there first and has been the company most associated with virtualization. Microsoft clearly knows this.
But I look at it like this: VMware's being synonymous with virtualization just means that it will fall harder. Netscape was synonymous with Web browsing. Lotus stood for the spreadsheet. WordPerfect meant word processing, and Novell was first in and once owned network operating systems. How did those all work out? Novell was the only one able to reinvent itself. The rest are fun to talk about in the context of "remember when."
Here's the way I think it is going to play out. Microsoft will continually improve on its product set and gain on VMware from a technical standpoint. At some point, the comparisons from a technical standpoint are going to be a toss-up. But Microsoft comes in at a lower cost and it's really hard to compete long term with free.
Microsoft also knows how to leverage the channel. VMware has a channel as well, but the organization takes too much for granted. It's got itself convinced that its product is so good that it sells itself. It has itself convinced it has a robust channel marketing and strategy plan. It has itself convinced that it owns this space.
The reality is it is renting the No. 1 slot, and if VMware's executives think holding a partner conference is a channel marketing plan and a channel strategy, this won't end well.
Netscape made the same mistake of thinking market ownership came as a result of product superiority. I remember sitting in Netscape Senior Vice President of Marketing Mike Homer's office when it looked like the company could do no wrong and it was unstoppable, and seeing the same things happening that I now see at VMware. Just my opinion, but it comes from experience.
The solution providers I talk to on a regular basis are almost universally saying they have cut all the costs they can possibly cut out of the business at this point and they need revenue improvement in 2010. We can all relate to that. But here's the bigger issue: Have you spent as much time thinking and doing things that can help drive new revenue as you have taking costs out?
If you can honestly answer yes to that, you are one of the few -- and you are also not being honest with yourself. I'm not taking anything away from cost-cutting, but the reality is revenue can solve a lot of problems. So in an effort to help, here are some things that are worth thinking long and hard about.
1. Commit to always looking for ways to take more costs out of the business—with one caveat. Every time you do so, drop 50 percent of the savings to the bottom line and use the other 50 percent to drive sales. That could mean using the newfound cash to drive a marketing initiative, add sales support or add another salesperson if there is enough money. Realize that any amount can be used effectively to raise awareness and/or find new revenue.
2. Build a solid sales and marketing plan for current and prospective customers. There is a lot of material out there that speaks to how to do this, so I'm not going to go into detail. However, this is something that is crucial to successful revenue growth in a difficult environment. At the very least, your sales professionals need to have goals for their current customers and for bringing new customers to the table. Marketing needs to know what you expect it to do with the current customer set -- perhaps make it aware of new offerings, as an example -- as well as what you expect in finding new prospects.
3. Do an accounting of all the co-op and market development funds you left on the table last year or that were used for unproductive endeavors such as T-shirts and golf outings. Then commit to making these soft dollars work for you in 2010. Somewhere between 40 percent and 60 percent of these soft dollars go unused every year. The CFO at your supplier is happy to take the liability off the books, while the channel managers are disappointed the dollars didn't get used to drive more revenue. There are myriad ways to effectively use this money, and it really needs to be calculated into your overall sales and marketing plan.
4. Consider finding new suppliers of services that can help you take advantage of those floundering soft dollars. We here at Everything Channel, as an example, have a host of products and services designed to drive demand for solution providers -- all of which are effective in driving large returns on the investment and all of which can be measured and approved for reimbursement from suppliers.
5. Find ways for every customer-facing individual in the business to do more of what drives sales -- and that's get in front of the customers more. This means making sure the technical deployment team realizes it is as important and perhaps more important to driving revenue as the sales team. If you have direct contact with the customer for any reason, you should be trained to spot new opportunities and help the business meet those opportunities.
BACKTALK: Make something happen. Robert Faletra is CEO of Everything Channel. You can contact him via e-mail at robert.faletra@ec.ubm.com.
Well, the answer to general optimism is an easy one. You wouldn't be an entrepreneur if you were not eternally optimistic with a healthy dose of paranoia that your competitors and sometimes your suppliers are out to get you. But I think you should also realize that the old saying, "Just because you're paranoid doesn't mean they aren't out to get you" is often true.
In 2010, you have to think about that. The evolving big-theme landscape is something you need to watch and contemplate how it will affect you over the long term.
We are seeing a lot of repositioning, reconfiguring and maneuvering by suppliers preparing for a cloud computing world. Let's not discount that the channel and individual channel companies will be impacted along the way. It isn't all going to be easy, and it isn't all going to be good.
So here's where my paranoia comes in. I believe no one does business with anyone who could remotely be considered a middleman because they like you. The only reason anyone does business with anyone in the delivery or acquisition pipeline is because it makes economic sense. And let's also remember that all salespeople would rather take the business direct than move it through an indirect channel. It's a question of control.
The reality is Cisco is maneuvering to be a cloud computing supplier. HP is a natural cloud player. IBM is less capable but certainly likes the model and wants in. Cloud computing is a long way from true large-scale deployment, but we are moving slowly to a world where computing power is sold and bought much like electricity is. I send in a check based on how much I used last month, and if I need more of it I'm plugged in and it's available.
Without question, this long-term trend is going to cause massive channel conflict. More immediately, solution providers are going to feel the heat from the major suppliers. Companies like Cisco, IBM, EMC and others are steeped in a direct-sales heritage. Sure, they have a channel and, certainly, they spend lots of money on channel development and execution.
The more cloud capable Cisco becomes and the more it can line up against HP the more you have to suspect that both companies are going to want to leverage their sales channel. And if you happen to be a solution provider that sells both you have to expect one or the other, or both, is going to say choose me or them. It's only natural at some point.
Farther down the road, can we expect more computing power to be sold direct rather than through the channel? It's probably too early to tell and, to some degree, cloud computing could actually increase the available market.
Next year is certainly not going to be the "year of cloud computing" or anywhere close to being the period where the cloud becomes a strong option. It will, however, be a year in which cloud computing continues to develop and that alone is going to cause issues for you.
You need to be moving down the cloud path as well, and you need to be evaluating and watching your suppliers with a skeptical eye, understanding all the while why they want to do business with you. That's not paranoia; it's business.
First off, it needs to think small. By that I mean, "think small business." Far too much of what the federal government has done has been centered on bailing out big business. Trouble is, big business has lots of money, is well organized and can buy lots of lobbyists. Small business is, of course, unorganized, naturally fragmented and has no real political clout, given that the little lobbying it does is through associations that have to represent large numbers of smaller organizations with varying interests. So small business gets little attention.
In order to think small, the feds need to think about what they can do to help businesses generate sales, which ultimately leads to jobs, which in turn leads to growth in the economy, which will lead to more tax revenue.
So rather than a government spending spree, the feds should produce the kind of legislation that spurs private spending. It seems to me that if there was some type of tax relief for infrastructure spending by business and perhaps even by individuals then we would see more business activity.
So, for instance, if a business were to receive tax credits or tax deductions on infrastructure spending, be it in the form of technology or otherwise, we would certainly see a greater willingness to spend on improving technology and other infrastructure. I would suggest there should be a larger benefit given to businesses below a certain threshold to help out smaller companies that as a category historically provide the majority of new jobs.
The government should also provide a tax credit or deduction for homeowners who improve their property, and this should not be based on income. Anyone hiring a contractor to improve a home is stimulating the economy and ultimately creating jobs and disposable income by those job holders.
There also should be a lowering of the payroll tax, which in and of itself would make it easier for businesses to justify new hiring.
It's clear that the current stimulus program has done little to generate new jobs. Let's not forget we were told the $750 billion in stimulus funding would keep the unemployment rate in the 8 percent range.
If we are going to stimulate jobs, which is what will lead to real GDP growth, something has to be done to spur small-business investment. Otherwise we are going to have a marginally better year in 2010 than we all did in 2009--and that just isn't going to feel very good.
CRN and the power of a world-class editorial team that drives more and better content on issues that matter to you is, and always will be, a key element. The editorial team spreads out across the industry every day and unearths relevant content that you absorb through print, video, online, mobile and any other distribution mechanism that makes sense. We ask questions and see things no one else sees because we are the only company focused solely on sales channels.
But to truly serve the need to accelerate technology sales on the part of solution providers and vendors alike we have added hundreds of other capabilities. Let me touch on a few of the bigger services you may be able to take advantage of.
We drive demand. You may not realize it, but thousands of solution providers are knocking down sales by using our demand-generation capabilities either through direct engagement with us or through vendor partners. We believe we generate and deliver better and more qualified sales leads than anyone in the business, and we are doing it every day in North and South America as well as in EMEA. Much of this work is on behalf of the top manufacturers in the market, which take our leads and redistribute them to their top partners. We also build custom lead-generation programs that solution providers use MDF to pay for, and offer database management services, custom events to drive demand, telesales, etc.
We recruit the right solution providers and match them with manufacturers that have a product and program that fit their business model. We know solution providers' needs and capabilities, and top-tier manufacturers often ask us to find the right partners for them. But we don't stop there. Once we have the right match, we help solution providers ramp up on the vendor's products and programs.
We build custom content for education and other uses. We have a large education business here for solution providers looking to build better businesses but also for manufacturers that need to teach their channel-facing employees how to execute in the market. Beyond that, we are building custom Web sites around specific topics for manufacturers attempting to help partners understand how to build sales practices in vertical arenas. We can do this because we know content and we can customize and deliver it in whatever form needed.
To finish, let me list some other things we can do: Event management; database cleansing; list rental; sponsored communities; online micro-sites; partner program development and other consulting services; partner benchmarking; competitive partner program analysis; partner capacity planning; advertising services both online and print; deal-registration services; Webinars; virtual online trade shows both custom and open market; live events for solution providers and end users.
In the end, Everything Channel is designed to help solution providers and manufacturers execute in the market. If you need more information, drop us a note at getinfo@ec.ubm.com.
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