<I>CRN</I> Interview: Charles Ill, BEA Systems

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As executive vice president of worldwide sales at BEA Systems, Charles Ill is tackling the tactical issues associated with creating a new channel ecosystem for the vendor. In an interview with CRN Editor in Chief Michael Vizard, Ill describes BEA's channel goals for the coming year.

CRN: What's your overall approach to the channel?

CHARLES ILL Executive Vice President of Worldwide Sales at BEA Systems

Ill: I believe that partner organizations and partner relationships have never been really very effective in the industry at all. What I want to try to do is change that game. As a result, we're going to concentrate on a small core group of partners that we're going to change how we do business going forward with, and we're going to share with them our pipeline.

We're going to try to develop processes between the two organizations where we share our pipeline on a regular basis using sales methodology and a sales process to ensure that we're in synch. We've begun that with HP and we've begun that with Accenture, and the early results are very positive. Then I'm going to send my sales team to work more closely with this core group of partners, and we're already working down that path.

CRN: What are the characteristics of the core partners?

Ill: What all these partners have in common is [they]compete with IBM. ... IBM comes to the table with a hardware solution, a software solution and a services package. What we're trying to do is build a set of partners that allow us to respond to that kind of an offer in a customer environment. It's our belief that what we have to bring to the customer is a coordinated, collated, integrated approach to a solution such that the customer has confidence that what we're putting on the table works.

CRN: How do you reach out to connect to the rest of the channel once you establish your core partners?

Ill: That's the next tier of partners that we're going to work with, and that will be a community of partners that we will actually start marketing to as if they are end users. They're the end customers for us.

We want to work with them to build solutions that we will provide along with specific technical support for that community. We will also provide marketing support for that community.

CRN: What is the total number of partners that you think is sustainable under this model?

Ill: ... Probably somewhere in the area of 50 to 100, and then the community that they support could be quite large. It could be several thousand because I think we can support the extended community fairly effectively by just being more open with what we have.

CRN: Do you feel the need to provide lead generation and sales support to your channel partners?

Ill: I would argue today that most partners don't look for BEA to generate a pipeline for them. A sales rep is typically working on five to 10 deals a quarter.

When you deliver five prospects, the guy looks at the 10 he's working on and says, 'I'm working as hard as I know how to work and I know these deals will get me close to making my budget for the quarter. These five other things that were delivered to me--do I have time for them? Do I trust they're qualified?'

At the end of the day, what generally happens is that those sales reps call those deals unqualified. ...

Probably the biggest problem you have as a host organization with a lot of partners is delivering those leads [so that] the partner actually considers them valuable. What I try to do is help them generate their own leads. That way, it's their leads--not my leads--being handed to them, and they don't challenge the quality of those leads.

CRN: Will you also be expanding your efforts around certifications?

Ill: Absolutely, and there are a couple of approaches to that.

One of the key things that we believe we had to drive is education for our partners from a product perspective and a solution perspective, and with an industry-specific set of solutions. There is sales-training education we give to our direct-sales team that we're now going to expand to all of our partner community that wants it.

CRN: Why should channel partners support BEA as opposed to IBM?

Ill: IBM is a competitor, and we're essentially a pure-play. We're not in the business of creating a services business, so we don't compete with them on the services front. We clearly aren't selling any hardware, so we're not on the hardware front. We have a very effective offering to compete with WebSphere, which is [the product line] that a lot of the IBM service teams lead with.

That's probably the most striking difference between us and IBM. With BEA, you find partners very energized around working with us because we're a very effective partner against an IBM solution.

CRN: So what is the one core advantage that BEA has over IBM?

Ill: One of the key differentiators of BEA's value proposition to the customer is faster [realization of a solution's] value. That is at the core of everything that we describe to customers, and certainly at the core of what we're describing to our partners.

One of the things that we suggest for a competitive environment is to run a proof-of-concept [project]. And we put the watch to it. We count how many resources it takes to execute the proof of concept and how long it takes to do the proof of concept, and then we compare that to our competitors' [solutions]. We believe that we have a dominant position in that particular arena.

CRN: Any other differentiators?

Ill: Well, IBM doesn't want partners in their top 3,000 accounts. The partner gets 6 percent or something in that area. If they go down into new businesses or non-named accounts, [IBM pays them significantly more. We want partners to work with us in those big accounts too.

CRN: As you said, IBM is focused on the midmarket. What is BEA doing in this space?

Ill: For partners that are strong in that space, we will be providing them with marketing support. You can also use the same product line in both environments. There will be some packaging to provide some pricing differentiation in the midmarket [space]. But essentially you can use the same product, which you can't say [about] IBM.

IBM had to go create a new product because the install was horrible. The capability of our product is such that it literally comes out of the box and it's easy to install and people turn it on. We don't have the same problem that IBM has in terms of ease of use.

CRN: How does BEA differentiate itself from Microsoft?

Ill: We have ease-of-use characteristics in 8.1 that rival the ease-of-use capabilities of Microsoft's products. But at the same time, we've got the proven industrial-strength capabilities that IBM has. So you kind of get the best of both worlds, and I would argue that's a huge differentiator in today's environment.

Gone are the days when customers would go out and spend $5 [million] or $10 million for software on a set of projects that have ROIs that are three and five years out. Customers are looking for ROIs that time out in 12 months. So ease of use, speed of execution, speed of implementation, time to value--those are going to be the key differentiators as we go forward.

CRN: How will you measure the success of your channel efforts?

Ill: First and foremost, did we get the leverage out of the partner community that we expected--that is, for every one of our reps that's covering a partner, did we get three to five times the productivity that we would have gotten out of a direct rep?

At the end of the day, the promise of the partner community is leverage over your existing sales force, and for me to be effective--for me to beat IBM in the marketplace--I have to be effective with my partners because IBM has got a direct-sales force that's roughly twice or three times what mine is.

For me to compete in that environment, I've got to go get the partner community engaged to help me in this fight against IBM. I think most of them have already given us indications that they're very interested in doing that, and that they're very willing to work with us.

That's probably one of the [things] I'd look for. I don't know specifically what [success] would be in terms of productivity until I can get a sense of where we are, and then I can lay out a challenge to do a factor better than that. And you can measure that in a couple of ways. How much revenue does an individual partner rep generate working with their partners? How many partners are participating in the program and are generating real revenue? And how successful are they with our solution set?

And finally, another way to measure [success] would be market share.

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