Avaya Revamps Growth Incentives, Intros New Partner Specializations For 2014

Avaya this week has taken the "final steps" in transitioning its partner program from a volume-based model to one based on value, announcing that partner levels will no longer be determined by revenue or volume of sales, but by partners' customer satisfaction scores and their ability to earn a new set of Avaya master specializations.

Avaya announced the program changes at its Executive Partner Forum, taking place this week in Cancun, Mexico. The company also unveiled a number of other changes to its Avaya Connect Partner program, including a new version of its Grow Right financial incentives program and new cloud-specific partner designations.

According to Barat Dickman, senior director, go-to-market strategy and channel programs at Avaya, the Santa Clara, Calif.-based company has been moving toward a partner program and rewards structure that is more value-based than volume-based for the past three years.

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Dickman said examples of this transition include Avaya's recently launched customer incentive program, which rewards partners on deals with new Avaya customers, along with Avaya's increased emphasis on partners' customer satisfaction scores.

But the final piece of the transition, he said, will be changing the way in which partners earn their Platinum, Gold and Silver medal status. Rather than rank partners on the Avaya revenue they generate as the company has in the past, partners instead will be ranked based on their number of Avaya master specializations, or, as Dickman put it, "badges" showing their knowledge in a certain technology or market segment.

"The final step is to migrate to a medal stratus requirements model that is based on skills and value and not just revenue dollars," Dickman told CRN. "[Partners'] medal status going forward is going to become a function of them earning things we are calling master specializations. Basically, the number of master specializations, plus their customer satisfaction scores, will dictate their medal status going forward."

The first four Avaya master specializations will be centered on Avaya's networking, unified communications, contact center and midmarket products.

Partners' ability to earn these master specializations will be based on the number of Avaya partner credentials they hold. It will also be based on partners meeting what Avaya called "services performance criteria" and proving that they have a certain level of experience in selling, marketing and demonstrating Avaya products.

Dickman said Avaya will create "some level of assessment" to gauge partners' competencies in these areas.

He also said that these master specializations will start to roll out in 2014, but the actual date when the new requirement model will change hasn't been confirmed.

"We aren't going to do this too quickly, because we don't want to jolt partners. We want them to have ample time for them to earn these specializations so that they can get the medal status they want," Dickman said. "I don't think we will actually make a hard cut in 2014 on the new model."

Scott Landis, president and CEO of VOX Network Solutions, a San Francisco-based solution provider and Platinum Avaya partner, said Avaya's new value-based partner rewards structure is one of several announcements made at the Avaya Executive Partner Forum this week that gives him confidence in Avaya's new channel executive team.

Avaya in July tapped Pierre-Paul Allard, its former senior vice president of global strategy and development, to succeed Senior Vice President of Global Sales Tom Mitchell, who announced plans to leave the company. In August, Avaya also appointed Richard Steranka, its former vice president of strategic planning, as the new head of its Worldwide Partner Organization.

"I'm very impressed with the leadership team. It's not business as usual around here. They are shaking things up, and there is major change going on, and, from my perspective, it's all positive," said Landis, who met with both Steranka and Allard this week at the event. "They very clearly are laying out what the direction is and how they are going to execute on it."

Landis told CRN his Avaya business was up 106 percent year-over-year, with that growth propelled largely by sales of Avaya's contact center solutions.

NEXT: Avaya's New Growth, Cloud Programs

Dan Ferguson, CEO and president of Advantel, a San Jose-based solution provider and Avaya partner said the Executive Partner Forum this week was one of the stronger events Avaya has hosted over the past few years.

"Avaya appears to have solidified their financials and are ready to invest more funds in their channel programs after three to four years of shifting margin away from the channel," Ferguson said. "Overall, the event was much more positive than recent years."

Ferguson said Advantel had a "huge year" with Avaya in 2012, with its Avaya business growing 70 percent year-over-year. He said Advantel's Avaya numbers were down slightly in 2013 as the company digested its "banner year," but that he expects growth again in 2014.

In addition to its new master specializations, Avaya this week unveiled Grow Right 2.0, the next-generation version of its growth incentive program for partners.

Grow Right 2.0, Avaya's Dickman said, is different from the first-generation program in a number of ways. For starters, Grow Right 2.0 actually collapses four other Avaya growth programs -- including its DMR Incentives, New Partner Incentives, Video Rebates and Networking Stretch Rebates programs -- into one.

"It's a pretty massive simplification of our growth program portfolio," Dickman said.

Secondly, Grow Right 2.0 will run throughout the full fiscal year, rather than just three quarters of the year, as it has in the past.

Thirdly, the new Grow Right program will evaluate partner revenue growth on a year-over-year, rather than a quarter-over-quarter, basis. Dickman said this change was made to address the seasonality challenges faced by some partners, especially those selling into the federal market.

Furthermore, partners in the past had to hit a certain growth rate for a bucket of Avaya strategic products in order to qualify for the rebates. Now, with Grow Right 2.0, partners can qualify for rebates for performing well in a single product category, such as networking or video, even if they don't hit the growth-rate thresholds in other product categories.

Lastly, Grow Right 2.0 will now be accessible to all Avaya partners, including all medal statuses, new partners and DMRs. Dickman said the Grow Right 2.0 program, like the first-generation program, still requires partners to hit a 2 percent growth rate to qualify for the rebate, which offers 20 percent back on their total growth dollars.

Avaya also used its Executive Partner Forum this week to introduce new cloud-focused partner designations. Set to launch in the first half of 2014, these designations will include Cloud Provider, Cloud Builder and Cloud Reseller and will be focused on Avaya's hosted and cloud-based solutions.

Dickman said the Cloud Provider designation will be for Avaya partners offering public cloud services, whereas the Cloud Builder will be for those partners building private clouds. Cloud Resellers, meanwhile, will be for those partners reselling Avaya's own cloud or hosted offerings.