Trend Micro Cutting Partners Via Formal Review Program

A newly instituted formalized review process at Trend Micro has impacted at least 20 percent of the company's partner base, with the security company cutting a large swath of its underperforming partners while demoting others to a lower status in its efforts to focus resources on its best partners.

The company axed at least 600 U.S. partners in 2013 as a result of the review process, which could impact another 12 percent to 15 percent of its 6,000 partners this year, said Trend Micro Channel Chief Partha Panda. The annual review program is intended to weed out firms that consistently produce a lower sales volume, and reward specialized partners in which Trend Micro is a big part of their business, Panda said.

The company is enforcing its program terms and conditions diligently now, Panda told CRN. A formal annual review of the company's partner ecosystem revealed partners whose revenue fell off significantly, forcing Trend Micro to move underperforming solution providers to a lower status within its partner program or cut ties with them completely, Panda said. The firm also is planning to expand the review process globally, he said.

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"Some of these partners have been with us for a number of years, and those conversations were not easy," Panda said. "They were not adding value. We were not seeing the focus on Trend Micro, plus we were not even seeing the capability in them to make a positive transition."

While the company is cutting ties with hundreds of partners, it also is adding new ones. Panda said it added more than 500 over the last year. The company also is providing exceptions to partners that it believes have the potential to make a turnaround, placing then on a "provisional continuation," Panda said. Partners are informed of their status and know they are expected to meet revised goals.

The focus is on quality, not quantity, Panda said. Persistent problems forced Trend Micro executives to conduct a thorough review. For example, the company discovered some partners selling its high-end security platform intended for large enterprises to small businesses that would likely never use all the capabilities, Panda said.

Trend Micro is in a tight, competitive battle in the endpoint security market, up against Symantec and McAfee, which offer similar capabilities, as well as Sophos and Kaspersky Lab, in the segment for small and midsize businesses. Solution providers said Trend Micro differentiates itself through its Deep Security protection offering for physical, virtual and cloud servers as well as virtual desktops. The company also places an emphasis on its threat intelligence network, which it says bolsters its software's ability to detect advanced threats.

Solution providers said they are welcoming the changes because they ultimately reward partners that are committed to the vendor. Trend Micro is making adjustments to improve its business, and that will benefit all partners, said Russell Temple, director of the data center practice at Tempe, Ariz.-based service provider Insight Enterprises, a Trend Micro partner.

"It's their business; if someone is underperforming, you have to make that tough call," Temple said. "From our standpoint, we hope that we never get into that situation."

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Temple said Trend Micro's portfolio appeals to enterprise customers looking for advanced threat protection and its data center virtualization security software, as well as small, home office users needing standard antimalware protection. A good reseller will have a conversation with the customer and align its business needs with the right products in the portfolio, he said.

"Overselling a product that the customer doesn't need is doing a disservice to the customer, and is a losing proposition for the partner and the vendor," Temple said.

Trend Micro is looking for partners that will bring it success, said Steve Carey, PC Connection's product marketing manager. PC Connection has been a Trend Micro platinum-level partner for more than a decade.

"The relationship has to benefit both parties, not just the vendor or the partner, and I'm sure that is a key factor here," Carey said. "A lot of times, it is a mutual decision to part ways."

The channel compensation model also was tweaked to align compensation with the strengths that the individual partner has, Panda said. A partner that consistently sells into small and midsize businesses will now get incentives to drive additional sales there. For enterprise sales, that partner will get a flat rebate or a flat discount rather than a broader set of incentives, Panda said.

"There is every incentive available that we possibly can give for them to hit their numbers and go higher in the midmarket, Panda said.

Trend Micro executives also are simplifying packages for the SMB market and large business segments based on the components each segment is likely to use, Panda said. The company offers an Advanced, Standard and Services edition of its suite. Enterprise deployments have additional capabilities, including encryption, the company's data loss prevention and Deep Discovery advanced threat detection offering. In addition to offering a flexible deployment model with cloud, hybrid and on-premise options, the firm is offering a "portable" license model to avoid penalizing businesses for using different architectures. A newly launched service provider program offers usage-based billing for most of its products, Panda said.

The company also took a hard look at its distribution model, incenting distributors to work with silver- and bronze-level partners rather than gold and platinum partners, Panda said. Trend Micro has channel managers to work with gold and platinum partners, he said. Incentives were also built in to retain customer accounts and bolster reseller productivity.

"Recruiting resellers and making them do one or two transactions does not help Trend Micro," Panda said. "We want them doing multiple transactions and getting to a certain level where we are suddenly relevant to their business."