Avaya Channel Chiefs: New Partner Pricing Model A Year Out

Avaya began a trial of its Avaya Pricing Model, or APM, in Australia in August. The response was strong, said Jeremy Butt, vice president, global channels, and Avaya is on course to launch APM next in Asia, then its EMEA theater. U.S.-based Avaya partners should expect APM in nine to 12 months, Butt said.

APM, on which Avaya partners have sought specifics for some time, will in theory dramatically pare down the pricing structure for Avaya's products on a global basis, allowing for faster and more efficient quoting by partners for customers.

Avaya has boiled more than 1,400 product groupings down to 14, according to Tom Mitchell, senior vice president and president, Avaya Go-To-Market. What's more, the levels of partner discounts for product sets will hinge not on volume and SKUs but on partner status and specializations with Avaya -- in other words, the sweeter the discount for the more deeply invested Avaya partner.

The model aligns with big changes happening in the Avaya Connect global channel program, into which Avaya is recruiting net-new channel partners while also trimming the ranks of its underperformers by hundreds of VARs.

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If all goes well, said Butt and Mitchell, partners will see more incentives to sell the full Avaya portfolio as an architectural, solutions-based play for customers. Not coincidentally, selling the full portfolio is another Avaya partner priority that executives have imparted to Avaya VARs at the company's U.S./Government Sales Leadership & Partner Conference in Las Vegas this week.

"The goal is to do pricing and calculations easily and quickly," Mitchell said of APM. "We've been pretty transparent about this to the partners, and the position we're going to is around solutions selling."

John Babcock, president of Relational Technology Solutions, a Columbus, Ohio-based solution provider, said Avaya partners want clarity on the APM model and other changes Avaya will make to how it offers discounts through VARs. The way Avaya pays out market development funds (MDF) to partners, for example, is changing.

"In the past, it was based on sales, and now it's based on a business plan: you give me a plan, I'll give you a certain amount of dollars," Babcock said. "There's less predictability in that. Before, if I sold $10 worth of stuff, i knew how much MDF I would get."

Discussions of APM and other partner incentives have been frequent at Avaya's partner council meetings, said Babcock, who said he'd reserve judgment until the final details were decided and offered to U.S. partners.

"The rates are changing, in some cases positive, but it's not completely baked yet," he said. "I don't know whether to get excited about it yet because it's not yet 100 percent locked down."