CRN Interview: Altiris' Greg Butterfield

As it expands from desktop management to the server and IT asset management, Altiris has formed a new Business Partner Program that aims to strike a balance between reseller and OEM engagements in the channel. Greg Butterfield, president and CEO of Altiris, recently took CRN Senior Editor Dan Neel on a deep dive into the workings of the new program.

CRN: Take us through some of the details of Altiris' new Business Partner Program.

BUTTERFIELD: We have created a program that allows for VARs, system integrators and OEM channels to work together. So two things have changed. Number one, if a VAR is involved in a transaction, and that transaction ends up getting on an OEM's invoice for reasons that are out of the control of the VAR's ability, then they will still be compensated for Altiris revenue. Second, we've also created an environment where, from a synergistic perspective, VARs are now working with our OEM partners--HP, Dell and others--to provide presales technical support, sales integration and knowledge transfer, and deployment of our software.

So VARs are getting software revenue, and they're also getting what many of them are looking for--the higher-margin service revenue dollars.

The main reason for changing the overall VAR program is our commitment to the channel. We recognized some channel conflict, and we're trying to minimize conflict by creating a program that's complementary between VARs, integrators and OEMs.

CRN: Does a VAR have to engage the customer before an OEM [does] for the VAR to get credit? Or can the VAR appear anywhere in the sales cycle and still get credit for assisting the close?

BUTTERFIELD: To say that there is a hard, fast rule for that is tough. Because there are multiple dynamics from geography to geography, from account to account. You get different dynamics. So here's an example.

We have set up Platinum, Gold and Registered Reseller levels. And we've created this portal. Golds and Platinums have the ability to register through the portal. And, because they're committed to Altiris, if you look at a Platinum, they're committed to have two Altiris-certified engineers. That's a couple of weeks' worth of training and certification. They make financial commitments to do X dollars in Altiris business per quarter. So if they're going to invest their business around Altiris, we will make sure that if they go into a sales engagement, and the customer ends up buying from a hardware OEM, they can register in this portal and as a result get compensation and rebates for selling Altiris technology.

We've also engaged a program that allows for our partners to be connected and communicating with OEMs in the sales process so that if a hardware manufacturer does not want to provide the service engagement, pre- or post-sales proof-of-concept, and post sales implementation, that there is a way for them to work with a Dell or HP to go take care of the service side.

CRN: Both Dell and HP recognize the value of service revenue. How do you keep the big guys from always roosting on the services?

BUTTERFIELD: Opportunity will be provided. This is where, for example, HP services may want to fulfill a large engagement for account control, but in many instances we believe that we're going to still provide our key VARs with the opportunity to be engaged, to have account control, and to do what they really want, which is be involved in the pre- and post-sales service.

CRN: And we're talking service beyond just the desktop PC, right?

BUTTERFIELD: Right. Top-tier partners will commit to promoting and selling and being technically trained on all of Altiris' segments. One value we believe we provide to the end-user customer is the ability to manage more end points. We've been perceived as one of the leading desktop management or client management suites. But in 2003 we entered the server and also the asset management segments. So for someone to be Platinum they need to commit to selling all three segments, or getting expertise and knowledge transfer in those areas. They need to commit to a minimum financial target, and then give their people technical training from an engineer perspective. The benefits that they will get from Altiris for signing up will be volume discounting, or the ability to, in the event they're doing transactions, get better pricing. They will have the ability to register to get revenues in the event the transaction goes through a hardware OEM. They will get prominence from a marketing perspective when we hold regular marketing campaigns and events throughout the world. They'll have the opportunity to participate in events that are paid for and sponsored by Altiris--on the Web, other marketing campaigns, sales leads, etc. And to help with the knowledge transfer, and to help save the cost of partners taking time out of the office to come learn about products, we're going to let them participate in our e-learning programs, and then we're going to give them a higher level of priority support. So we believe we're going to give them all the back-end resources and infrastructure needed to allow them to go and really get engaged and be successful and ensure that when a customer buys products from one of our partners, there's a high probability of a successful engagement and repeat business.

CRN: Will every partner tier in the program have some access to sales leads?

BUTTERFIELD: Yes. For example, Platinum partners are going to be provided leads relative to market campaigns and events which will then give them more leads than say a Gold. If you invite a local Platinum in a geography to participate in an event, then they're going to get the leads associated with that event that Altiris put on, which Altiris is going to incur and cover the cost associated with.

Now, Gold is very similar to Platinum in that there's a higher level of commitment from Altiris. But because there's less [of a] commitment requirement from them, there's going to be less as far as benefits from Altiris. It's really stratified to meet the needs of all partners. So our Gold partners would need to meet the minimum requirement of at least having one person trained or certified on Altiris products. They do not need to commit to multiple segments, just to one, so the training is less. And their commitment to selling products is less, and they need to commit to a smaller financial quarterly target.

So for Gold, the bar has been lowered. As far as benefits, they will still get better than regular support but not the same level of priority that Platinum would receive. They're going to get leads but not the same type of leads or number of leads that a Platinum would get. If you only have X number of leads, Platinum is going to be taken care of first. Your Gold discount will not be as good as a Platinum either.

CRN: Will you need to manage the geography of who's Platinum, who is Gold, etc., so you don't have customers shop through Gold partners to find Platinum partners?

BUTTERFIELD: The strategy is to segment as best you can, once again trying to minimize channel conflict. And so we will do that by geography. It's not our intent to sign up more Platinums than we have business for.

And a geography based on a partner's success will only warrant X number of Platinums or Golds in a specific geography. The fact that we're not requiring Gold to certify on all products allows for product segmentation. And then the other thing that will happen by natural process is that smaller VARs that maybe do not have as big a geographic footprint might end up with smaller customers than a VAR that has a bigger overall footprint and that would lead to cover multiple geographies. And we'll monitor and watch that.

CRN: What happens to the current Altiris partner structure?

BUTTERFIELD: We recognize that we have 200 or 300 partners that are already out there--business partners and authorized Altiris resellers. Current business partners will become Gold partners, and so there is a grandfathering of existing partners to become Gold at which point we believe that once again through performance, execution and commitment, you'll end up with three levels instead of basically the one we've had in the past.

CRN: What about changes made to your direct-sales force to accommodate the new program?

BUTTERFIELD: We have a strategic alliance sales team, and in strategic alliance, you have people to handle OEMs. We have a systems integrator team, we have a VAR team, and then we have a virtual team in product management, customer support and marketing to make sure that we're creating the necessary infrastructure and back-end Web so that when somebody signs with a partner it's not done as a one-off each time. You subscribe to this level, and you get X benefits.

So you have a strategic alliance that is responsible for entering into agreements, managing agreements, infrastructure, driving demand, working with our partners. You also have a field sales team, and in a field team you have Altiris sales reps that are geography-based. They're also based on customer size, so you have here a regional manager, you have an account manager and then you have a sales support rep or an inside sales rep. And it's their job to work hand in hand with our partners.

It's important to point out that they are incented financially to put transactions through a channel, they are motivated to work with the channel so that you don't have channel conflict with an Altiris sales rep wanting to take a transaction direct.

CRN: Would you guys go 100 percent channel if that's where the chips fell?

BUTTERFIELD: The problem of saying 100 percent is it's an absolute, and usually we will not speak in absolutes. There is maintenance, there are customer support entitlements, so no, we'll never be 100 percent. But we're very committed to the channel. The fact that we've gotten 87 percent of our revenue indirect in Q1 hopefully validates our commitment and shows our ability to partner.