EMC Overhauls Channel Group To Ramp Partner Sales

The Hopkinton, Mass.-based storage giant, fresh off a strong 2006 in terms of revenue and channel growth, plans to offer partners more revenue opportunities and make it easier for them to work with the vendor, said Mitch Breen, EMC's senior vice president of global channel sales.

The moves appear to signal a new emphasis on the channel by EMC, said Mark Teter, CTO of Advanced Systems Group, a Denver-based solution provider. "Those are the most significant channel changes I've seen from any vendor," Teter said.

Working with EMC has traditionally been a challenge, Teter said. "We've been dealing with them for 10 years, but it's never been the partnership we wanted," he said. "It's always been on their terms. This is a big change."

The changes to EMC's channel programs are among the most significant since the vendor introduced its Velocity Partner Program four years ago this month.

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They come during a time when EMC's revenue through the channel is growing faster than its overall revenue, which grew 15 percent between 2005 and 2006, Breen said. Revenue associated with registered deals, which give solution providers an extra 5 percent discount off list price, was up 30 percent in the third quarter compared to the same period in 2005. And solution providers who participate in EMC's Journey to the Top program, which offers additional incentives to sell combined hardware-software solutions for data protection and archiving, saw their sales increase 30 percent in the second half of 2006 compared to those who did not join the program, he said.

Breen said the goal of the new changes, which were unveiled to many of its channel partners in a Web-based seminar Wednesday, is aimed in part at helping solution providers do a more profitable business with EMC.

For instance, EMC has changed its internal sales compensation plans to remove incentives for its direct sales force to sell services to small and midsize businesses except when they are sold through a channel partner, Breen said. "We want our partners to capture these opportunities," he said. "We believe this is very unique."

EMC is also making it easier for solution providers to become Authorized Services Network (ASN) certified by implementing more Web-based training, Breen said. The company has also reduced the overall cost and time required to get trained, and its offering free training for sales engineer training, he said. "We want partners to be trained as well as or better than our EMC people," he said.

In order to encourage solution providers to become ASN-certified, EMC is putting in place a program to help build brand awareness among end-user organizations, including advertising, to help potential clients better understand the value of working with an ASN-certified partner, he said.

EMC is also expanding on moves it started in December to unify its channel program, Breen said. Instead of reaching out to solution providers on a product-line basis, the company now reaches out to partners through a single window regardless of the product line. "We've consolidated," he said. "So now it's just one organization facing the partner."

However, he said, that the consolidated channel organization does not include VMware or RSA products, both of which still have separate channel organizations.

EMC is also bringing on more technical and marketing personnel to focus on the channel, with much of that support being done based on geography.

For instance, Breen said. The company is assigning more technical engineers, solutions engineers and systems engineers to the channel. "These are people who live and breathe every day with the channel community," he said. "They don't work with direct sales. Most metropolitan cities have at least one tech support person."

On the marketing side, EMC is starting a reseller-focused, co-branded lead generation programs based in local communities, Breen said. This includes funding field channel marketing managers to develop local marketing programs, he said.

EMC is also starting to simplify its Velocity Partner program by replacing the points-based system, now used to determine at which tier a partner is rewarded, by a system based on revenue, Breen said. In order to help meet revenue goals, the company is multiplying solution providers' software revenue by five. For instance, a sale including $10,000 in hardware and $5,000 in software would actually count as $35,000 in revenue for the purposes of qualifying for the next tier in the program, he said.

ASN-certified solution providers will also get an added bonus to their Velocity co-op and rebate rates, Breen said.

Finally, EMC introduced a new Velocity Snapshot partner portal that allows solution providers to check their status to see what they need in terms of revenue and certifications in order to qualify for the next tier within the program, he said.

Dan Carson, vice president of marketing and business development at Open Systems Solutions, a Willow Grove, Penn.-based solution provider, said he likes the channel program changes that he has seen so far.

"All this is a huge change in the way EMC deals with the channel," Carson said. "It's absolutely positive. EMC is incenting its direct sales through compensation and quotas to have a majority of their business go through the channel. The direct sales have to meet that quota. EMC is serious about the channel. They need more feet on the street."

Carson said the biggest impact will come from EMC's new focus on geography-based technical and marketing resources.

"Most other vendors don't have geography-based marketing," he said. "This is a huge plus. It lets each territory focus its message in areas hot to that geography. For instance, they might focus on compliance in Washington, D.C., or on HIPAA in Philadelphia."

Teter said that simplifying its channel-facing organization will be a big boost to solution providers. "The simplified organization is structured so they can run issues up their command chain easier and hopefully get a response to the client fast," he said.