Avaya’s New Channel Chief Tackles Compensation, Channel Conflict

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Just three weeks into his job as the new channel chief at Avaya, Todd Meister is already confronting problems in efforts to improve the vendor's relationship with channel partners.

Meister attended the Catalyst Telecom Business Partner Conference 2003 here this week, meeting many Avaya solution providers for the first time since becoming the vendor's vice president of global channel strategy and distribution on May 19.

His predecessor, Jan Burton, left Avaya in February and joined Symbol Technologies last month.

Meister comes from the channel, having most recently served as president of consulting and systems integration firm AE Business Solutions, Madison, Wis. He previously held management positions at EMC and StorageTek.

First on his list is a change to the vendor's compensation strategy for its field sales force that should encourage direct-sales representatives to engage a wider mix of Avaya's solution providers, Meister said.

Currently, field sales representatives are compensated on channel sales of the vendor's enterprise telephony products on a "where managed" basis. That means when product is shipped to a solution provider's headquarters, Avaya's direct reps in that geography are compensated for the sale even if the customer implements the technology in a different city, Meister said.

"The result is our reps saying, 'Let's find another partner, one that's local, so I don't lose compensation on the deal,' " he said.

By Avaya's first fiscal quarter, the fourth calendar quarter, Avaya will change that policy to compensate reps according to the point of installation, he said.

"It's the only way to drive natural behavior and the best integration between the indirect channel and our direct-sales force," he said.

Meister plans to continue Avaya's policy of providing its direct-sales force with greater compensation for deals that go through solution providers.

Avaya also has work to do to reduce channel conflict between partners and Avaya Global Services on maintenance services, he said.

One answer is for partners to resell Avaya's maintenance services, which provide them with an average of 12 percent to 20 percent in up-front margins, he said.

"There simply is conflict around who owns the customer," said Tim McDermott, president of MAC Source, a solution provider in Syracuse, N.Y., at the conference.

To help clarify such issues, Avaya is working to develop formal rules of engagement, Meister said. Next week the company plans to put the latest revision of its policy in front of its partner council, he said. Currently the company has an informal policy, he said.

"We want something we can put on Avaya letterhead that says, 'Here's what we're obligated to do for you, and if we don't do it, here's how to escalate it,' " he said.

Meister also outlined some expectations he has for Avaya's channel partners, including increased focus on building up their data skills and bringing in new customers.

"We're also going to look at programs for how we can incentivize them to do that," he said.

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