Veritas' Renewal Push

Of the company's 350 to 400 solution providers selling NetBackup software to enterprises, only 12 now have access to the renewal business under Veritas' Technical Support Partner (TSP) program, said Michael Sotnick, vice president of partner sales at the Mountain View, Calif., company.

Veritas plans to expand this program to a wider range of solution providers in 2004 but faces infrastructure difficulties that impede the outsourcing of the management of the renewals, Sotnick said.

Veritas' non-TSP enterprise solution providers do have one way to participate in enterprise backup renewals, said Sotnick: by reselling one, two or three years of license renewals up front at the time they initially sell the software.

Meanwhile, renewal business is available to partners that resell the company's Backup Exec software, according to Sotnick.

The current Veritas system stands in contrast to the sales model of some of its key competitors.

Computer Associates International, for instance, has allowed partners to resell enterprise license renewals since last October under its Open License Program, said Michael Natoli, channel manager of BrightStor solutions for the Islandia, N.Y.-based vendor.

Legato Software started implementing such a system in the Americas about three years ago through its Authorized Technical Support Program, and nearly 100 percent of its enterprise partners participate in recurring revenue streams, said Chuck Lucci, vice president of worldwide sales at Legato, now a division of EMC, Hopkinton, Mass.

The inability to participate in contract renewals from NetBackup software sales to enterprise customers has been a sore spot with partners for some time.

John Murphy, executive vice president of Advanced Systems Group, a Denver-based solution provider, said Veritas' direct approach to software license renewals can actually result in a partner getting locked out of an account. "Once there's a site license in place, how do you sell more software to that customer?" he said. "Also, we can't sell maintenance renewals. That hurts."

Veritas is doing itself and its customers a disservice by taking the enterprise renewal business direct, said Murphy.

"We do a lot of maintenance renewal business and have our own portal to track renewals," Murphy said. "It's really helpful to customers. How many companies consolidate 10 servers into two servers but still pay for 10 licenses? How many get checks back for prepaid licenses that are no longer needed? That's where we help."