Symantec Explains SMB Renewal Changes; VARs Still See Problems

SMB software

Partners' concerns about keeping recurring revenue from subscription renewals stems from recent changes in the company's renewals process. The changes were first made public June 12 by Symantec COO Enrique Salem in a presentation to financial analysts. Salem said June 12 that Symantec intends to further invest in automation for SMB software licensing renewals to "drive efficiency and reduce the overall cost structure" of its "go-to-market capabilities."

ChannelWeb first reported Tuesday that Symantec's effort would take more SMB renewals away from partners and bring them direct to Symantec.

But Symantec vice president of Global Channels Julie Parrish disputes that assertion. "We continue to invest in automation that will drive efficiency in how we go after our SMB customer segment," Parrish said in an e-mail. "We have set up more proactive notifications to customers and developed an approach to facilitate the connection back to the originating partner--and pay a commission back to the partner. Partners are encouraged to get in to their customers early and ensure the renewal happens up front."

According to documentation provided by Symantec, the "proactive notifications," launched in May, work like this: The company takes the initiative to contact the reseller's customer by e-mail or direct mail with both a 60-day and a 30-day renewal notice, which mentions the reseller's name, instructing customers to contact their "reseller of record." No contact information for the reseller is provided.

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At expiration, Symantec said, the company then provides the customer with a choice to "contact their reseller of record" or renew online directly from Symantec.

Partners, on the other hand, say that Symantec does not make it easy for their customer to renew with their own reseller. Despite Symantec's stated policies, some partners have said that the security vendor has consistently contacted their customers with erroneous subscription renewals or sent e-mails that failed to provide names and contact information of the reseller while listing detailed contact information for Symantec representatives.

During a ChannelWeb interview, one SMB partner said that some of his customers had forwarded him e-mails they received from Symantec, encouraging them to renew their software licensing subscription but failing to include the VAR's name and contact information. The partner said that he was never copied on any of the subscription renewal notices.

In one of the renewal notification e-mails viewed by ChannelWeb, a member of the Symantec Renewals Team encouraged the customer to either contact "your reseller" or Symantec, while including an e-mail address, phone and fax number for the company renewals representative. The message advised the customer to act immediately to continue coverage.

"The solicitation that I received, had it not been redirected to us, it would have gone direct," said the partner. "Customers don't care, and they shouldn't have to. and#91;SMBand#93; customers take the path of least resistance and this e-mail makes the path of least resistance the vendor."

Other partners say that Symantec has listed reseller names to the customers in the first renewal notice, but has erroneously told the customer their subscription had expired after the renewal was already purchased through the reseller. Symantec then flooded the customer with calls encouraging them to renew, the partner said.

"I'm wasting my time. They're wasting my time. It's just silly. We could be spending time selling them Symantec backup software, but instead we're digging through paperwork for erroneous expiration notices and then I have to e-mail them the proof," said the partner. "I've got to cover my behind to make sure we renewed this."

Meanwhile, some partners who commented on ChannelWeb's community forum, maintained that Symantec's more "proactive" automated SMB licensing renewal process is a continuation of a practice that has existed for years.

"Symantec has been contacting SMB customers for renewals for a couple years now, either by phone or email," one reseller wrote. "My clients call me or forward the emails to me (I have usually sent a renewal to client anyway) because I have good relationships with them and they trust that I will give them a better deal than Symantec direct. This is nothing new for Symantec at the moment. They cannot possibly be stupid enough to cut out the channel on all sales."

The debate over SMB renewals stems from comments first made by Symantec COO Enrique Salem during a June 12 conference with financial analysts. Salem to the analysts that the company planned to find ways to drive "improvements," such as automation, into its go-to-market capabilities throughout 2009 and 2010.

"The other thing that we've done is we've continued to drive a new set of automationand#8212;a new set of technology that'll automate our delivery into the SMB market. We've proven in the Consumer business that we can move more and more of our business online. About 70 percent of our Consumer business is now done electronically," said Salem in the meeting transcript. "We believe the same is true in the SMB segment, where we can automate or simplify the renewal process for many of our products like Backup Exec and Symantec endpoint protection, ultimately driving more efficiency but higher renewal rates."

Salem's statements regarding SMB renewals, as well as the company's clarified policy on direct sales for its largest accounts and other channel changes, can be found on page 25 of the PDF transcript of the meeting.