Remaking CA's Channel

With sights set on boosting channel sales, attracting new solution providers and stealing market share away from competitors,particularly in the security and storage markets,the enterprise management vendor plans to debut a revamped channel partner program at the show.

The company also plans to unveil new products across its BrightStor storage, eTrust security and AllFusion application life-cycle management lines. For example, CA intends to introduce BrightStor ARCserve Backup 10,slated for availability this fall,which will include more components targeted at the SMB market, as well as increased automation and management features.

In addition, the vendor plans to announce the general availability of eTrust Command Center, a security management console that gathers, sifts and correlates data from multiple security systems. CA said it is also expanding support for enterprise data modeling in its AllFusion ERwin Saphir product line, which will now include components to support apps from PeopleSoft as well as J.D. Edwards and SAP. CA also plans to open the Saphir product line to the channel for the first time.

"Some of the ways the products are packaged are so, so channel-friendly and channel-focused, I think people will understand how serious we are about this," said Kumar, chairman and CEO of Islandia, N.Y.-based CA.

CA is also serious about its new channel program, adding aggressive rebates, expanded lead generation and free training, certification and support for qualified partners, Kumar said. "The things that are working, we are keeping and building on. The things that are not working, we have listened to [partners] and we are changing," Kumar said. "For those that are really looking to engage, I think the rewards can be very substantial."

Through the new program, CA hopes to prove that it is committed to fostering close ties between solution providers and its direct-sales force, said Gary Quinn, executive vice president of CA, who crafted the program with George Kafkarkou, CA's senior vice president of worldwide channel operations.

In October, Kumar brought in the duo to reinvigorate the vendor's North American channel efforts, a feat they previously accomplished overseas.

"It is really important for us to get this right," Kumar said. "We've tried it a couple of times. In some areas we've been successful and some areas we haven't. And we've gotten the more successful people in the company who have gotten it right in some geographies to come over here and do it for North America."

To that end, Quinn is working to change the way CA views its solution provider partners, which would be "a cultural shift" for the company, he said. "A partner is a customer of CA," Quinn said. "There's a whole different approach to somebody who's a customer: The customer is always first, the customer's always right %85 and those are some of the things I'm trying to get [through to] our guys out in the field with our partners, as well as the high-level people."

The vendor began its quest to improve its partner relationships 15 months ago when it launched a channel-preferred compensation model for its enterprise BrightStor storage products.

CA hailed the channel-preferred strategy as a major assault against archrival Veritas Software, Mountain View, Calif., that would bring double-digit increases to CA's overall channel sales and strengthen ties between partners and CA's direct-sales force. But as good as the program seemed on paper, it alone could not overcome the realities of a tough economy and the anti-channel mind-set of some of CA's direct-sales reps, solution providers said. The numbers support that contention: CA's channel sales dropped 9 percent in fiscal 2002, a far cry from the 20 percent growth Kumar expected the program to spur.

Now Kumar is looking to drive one-quarter of CA's sales through solution providers, up from 13 percent in fiscal 2002. The channel-preferred sales model, formerly the cornerstone of CA's channel strategy, is today only a small piece of the newly expanded program.

Some solution providers said CA's direct-sales representatives did not fully embrace the channel-preferred plan. "I don't think the direct-sales force really felt they needed to strongly engage with the channel to be successful in that program," said Dave Hall, CTO and senior vice president of Dallas-based solution provider CompuCom.

The channel-preferred program "still caused a little bit of conflict," agreed Valeh Nazemoff, director of business development at DataTech Enterprises, a Fredericksburg, Md.-based solution provider. "We would bid [on a project] and the direct-sales force would also bid, and sometimes CA would come in as more of a value, offer better pricing."

However, Nazemoff, Hall and several other solution providers said they have seen marked improvements in their relationships with CA's direct-sales force over the past six to 12 months.

Dave Hiechel, president and CEO of Eagle Software, a Salina, Kan.-based storage solution provider, said trust is growing between the direct-sales force and channel partners as they get used to working together. "It's very much hand-in-hand these days, especially in bigger opportunities," Hiechel said, noting that Eagle Software has closed a dozen new customer deals over the past six months in conjunction with CA's direct reps.

It's exactly that trust Quinn said he needs to cultivate with solution providers. "[Partners] want to go through a transaction with us where direct is involved, and they want to see us do it the way that we're saying in the brochure. That's what they're looking for," Quinn said.

Part of the vision for an integrated direct and indirect sales force calls for the launch of the new channel program, supported by multiple channel management systems designed in-house to ease processes such as rebate applications and lead tracking. "We have more resources dedicated to the channel at CA in North America than at any point in our history, and that's over 26 years," Kafkarkou said.

To encourage partners to sell across CA's product families, the company is introducing rebates ranging from 6 percent to 15 percent for sales in its three channel product lines, on top of regular margins.

CA's Margin Builder Rebate Program is open to all channel partners that meet program and revenue requirements, a first for CA, Kafkarkou said. The company has had one-off rebates in the past, executives said.

The new rebate program also aims to attract new solution providers to CA's partner ranks, especially those partners working heavily with CA's competitors, Kafkarkou said. "Ten to 15 years ago, we were an arrogant company. We are absolutely mindful that there are many resellers out there who know very little about CA, and that's shame on us," he said. "I suggest, after this, that we will gain some more attention."

In return for meeting quarterly goals of $35,000 in CA license sales, qualified Affiliate partners,approximately 8,000 active, regionally focused solution providers that target small and midsize businesses with CA's lower-end, two-tier products,receive 10 percent rebates on eTrust sales and 6 percent rebates on BrightStor and AllFusion sales.

Premier partners,CA's 280 larger consulting, integration and volume fulfillment partners focused on mid- to large-size customers,earn 15 percent rebates on eTrust and 8 percent rebates on BrightStor and AllFusion for meeting quarterly growth goals ranging from 20 percent to 45 percent.

Only Premier partners that have achieved CA's Enterprise Solution Partner (ESP) designation can sell the vendor's enterprise products, such as BrightStor Enterprise Backup and eTrust Single Sign-On. Other partners, such as OEMs and ISVs, are eligible for customized rebate plans.

For its part, CA competitor Veritas said it is staying the course and not upping rebate incentives. Michael Sotnick, vice president of partner sales at Veritas, said the company has "held its own" against vendors trying to buy success through partner rebates, market development funds or other incentives. Veritas offers up to 3 percent quarterly rebates to its elite partners, Sotnick said. "We have grown in times where they have outspent us by wide ranges," he added.

But CA will be counting on more than just rebates to win partners. It also plans to launch at CA World its Lead Delivery and Management System, a partner extranet that enables solution providers to access and track qualified leads created by the vendor's Customer Interaction Center, a 400-member lead-generation team housed in Tampa, Fla. The CIC represents a multimillion-dollar effort on CA's part to nurture channel business through which CA expects to cultivate $750 million in quoted, configured leads for channel partners annually.

The new channel program also includes free online and instructor-led training, free certification and free phone support.

"Manufacturers that are bearing those costs will obviously have some loyalty with solution providers. It's a very good move," said Rajiv Shah, president of Impex Technologies, a Torrance, Calif., storage solution provider authorized by both Veritas and CA. "That directly impacts my bottom line."

Other CA partners also like what they're hearing from CA these days. So now, they said, it's time to execute on the strategy.

"They have a strong product line and have put a program in place that looks like it has everything you need to be successful, so now it comes down to implementation," CompuCom's Hall said.

STEVEN BURKE contributed to this story.