Siemens Enterprise Communications: Strengthened Channel Means North America UC Gains

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Siemens Enterprise Communications on Monday confirmed the latest version of its OpenScape unified communications platform, part of an ongoing product and channel blitz that finds the UC vendor aggressively going after market share in North America after a few stagnant years.

Siemens spent the past three years largely re-evaluating its North American prospects and re-tooling its management team. It emerged from a painful restructuring in 2011 with what partners have described as a well-thought out channel strategy, as well as an armful of impressive customer wins at a time when the major UC players are freshly distracted.

"Everyone had questioned our viability," said Chris Hummel, president for North America of Siemens Enterprise Commiunications and its global chief marketing officer, in a recent interview with CRN. "We were a $6 billion business and now we're a $3 billion business. Those are the facts. In the U.S. we needed confidence, and now our aspirations can get bigger and we can set our goals a little higher."

Siemens Enterprise Communications is joint venture of German conglomerate Siemens AG and investment firm The Gores Group, which owns 51 percent of the company. It's an established communications brand, particularly in Europe, but it's overall global market share slipped to 8.1 percent in 2010, according to Gartner, and at that time, sales had been declining for half a decade, particularly in North America, where sales fell by 32 percent from 2009 to 2010.

With the growth of unified communications behind dominant players like Cisco and Avaya and their sizable channel ecosystems, it was a bad time to be declining, especially with market alternatives like Microsoft and ShoreTel starting to come on strong.

[Related: VAR500 M&A: 20 Recent Networking Channel Acquisitions Worth Watching]

It was about that time, however, when Siemens Enterprise Communications' new leadership team began to form. Hummel signed on in April 2010 following many years at SAP and before that, Oracle. He was only a few months behind Siemens Enterprise Communications CEO Hamid Akhavan, who joined in February of that year. Channel chief Patrick Kehoe, senior vice president of strategy, planning and indirect business, arrived in July 2010 following 10 years at MarketBridge.

These days, Hummel doesn't have to talk about Siemens Enterprise Communications in terms of things that might happen -- they are happening. The company grew orders 26 percent from 2010 and 2011, and also notched some statement-making sales wins. Though he declined to name which state, Hummel said Siemens out-gunned both Cisco and Microsoft for a $50 million state government communications contract last year.

As they built their new team, Hummel and his lieutenants also focused on hires with channel expertise. Those included Andy Howard, vice president of channel collaboration, who worked for Telmar Network Technology and Advent and Andhow Growth Consulting before joining Siemens in July 2011.

Other key hires included Tom Boyhan, the former president of sales for VAR500 power Shared Technologies, which was acquired by distributor Arrow in 2010, and Paul Comeau, the former COO of Xeta Technologies -- another former VAR500 player that was acquired by Paetec in 2011 -- and now Siemens' senior vice president, services, North America.

But among the most important moves, Hummel said, was an 18-month revamp of its channel program to open up more previously direct-only opportunities to solution providers and expand its distribution relationships and partner incentives.

Kehoe told CRN in December that Siemens' channel approach had been "sub-optimal," and Siemens needed to be a lot more clear with partners about everything from field engagement to compensation. Siemens' Go Forward! program now offers everything from demand generation tools to an online partner fund and new specializations around cloud and UC applications.

Those initial efforts seem to be paying off; Siemens Enterprise Communications' indirect channel revenue is now 25 percent, and as of December, the company had about 190 registered U.S. partners. Siemens Enterprise Communications itself grew profits 50 percent year-over-year, and its growth is coming at both the high and low ends of the market: its top six partners, which include AT&T and Verizon, collectively grew Siemens revenue more than 40 percent from 2010 and 2011, and licenses of OpenScape UC to SMB customers also grew 47 percent year over year.

"We're No. 2 in the world in SMB in this space," Hummel said. "We didn't even know that until we adopted a market-driven company approach."

Next: Siemens' Channel Relationships

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