EMC VAR Angst: New Channel Program Drops Many Partners From Top Levels

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The new EMC Business Partner Program has pushed a large number of EMC's smaller and midsized channel partners out of the highest level of partnership and benefits as the vendor brings back revenue targets as a major determiner of partners' standings.

The change in status for these EMC channel partners comes despite the fact that many of them invested heavily in the certifications and training EMC required to get to the highest level of the recently retired EMC Velocity program.

As a result, many of EMC's highest "signature" level partners in the old Velocity program are now at the lower "silver" or "gold" level, not "platinum," in the new EMC Business Partner program.

[Related: EMC's New Partner Program Motto: 'More Simple, Predictable, Profitable']

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A source close to EMC said the company in the near future will address many of the solution provider concerns with an update to the program.

The older EMC Velocity program made it possible for a large number of solution providers who invested in the right certifications to grow their EMC business, said one EMC channel partner who declined to be identified.

That has changed, the solution provider told CRN.

EMC's Fred Kahout

"Before, we had the volume and certifications to get to the signature level," the solution provider said. "Now we're at the silver level. EMC made the bar too high. We can have all the technical certifications in the world, but unless we have an EMC revenue of $100 million, we won't make platinum."

With Velocity, EMC was able to expand its channel with a lot of new partners "including us," the solution provider said. "Then EMC pulled the rug out from under us. I'm not sure who advised EMC to do that."

Fred Kohout, vice president of global partner marketing at EMC, knows who advised EMC to do that.

"This program was architected with the participation of partners, and based on their feedback," Kohout told CRN.

Gregg Ambulos, EMC's senior vice president of worldwide sales, told CRN via email that since the EMC Business Partner program was launched in January, the vast majority of EMC ecosystem partners have been "elated" with their experience so far.

"At our most recent Partner Advisory Board in Calendar Q1, partners have given the program an A+ and we’re excited because the partners have said that EMC listened and as a result, has created the best program EMC has delivered to date. The program was created in concert with the partners, market-industry analysts, partner advisory board members, along with numerous one-on-one partner interviews. As with any new program, we will continue to make program enhancements based on their feedback," Ambulos said.

The primary difference between the EMC Business Partner program and the decade-old Velocity program it replaced is the use of EMC sales revenue as one of the primary determiners of which level of benefits partners receive.

Under EMC Velocity, solution providers were awarded benefits at one of four levels, with the actual level achieved depending heavily on the training, certifications and specializations partners acquired. The goal of that program was to give smaller partners incentive to invest in developing EMC expertise. That allowed many of EMC's smaller channel partners to achieve "signature" status, the highest level in the Velocity program.

The new EMC Business Partner Program, however, makes a partner's EMC revenue one of the key determiners of benefit level, in addition to achieving certain levels of certifications and specializations.

Partners in the EMC Business Partner Program are at one of three levels. The lowest, or "silver," level requires partners to have a minimum yearly EMC revenue of at least $2 million, in addition to having two staff members certified as EMC sales resources, two as EMC pre-sales resources and one as an EMC technical architect.

At the "gold" level, partners must commit to annual EMC revenue of $25 million in addition to having six sales resources, six pre-sales resources, three EMC technical architects and three EMC services resources.

At the "platinum" level, which can be achieved only with a formal invitation from EMC, solution providers commit to annual EMC revenue of $100 million, as well as meeting much higher goals in terms of staff with the prerequisite number of sales, pre-sales, technical and services certifications.

Kohout said the EMC Business Partner Program offers benefits not available with EMC Velocity.

For instance, unlike the Velocity program, the EMC Business Partner Program includes integrated solutions consisting of technology from different parts of the EMC Federation, Kohout said. As examples, he cited the EMC Enterprise Hybrid Cloud and big data as orchestrated solutions available to partners.

"This move (to the EMC Business Partner Program) is about where we and our partners want to go, not where we've been," he said. "So the program is a balance between competency and performance as measured by revenue."

Underpinning the EMC Business Partner Program is a predictable earning rate across the entire EMC solution portfolio, Kohout said. "Partners asked for a predictable way to look at the program across our entire business," he said.

Kohout said the new program is not ignoring the needs of EMC's smaller partners.

"We recognize that partners want to grow," he said. "Stay tuned. See what we do once we're past the launch."

It is important for EMC to take a pragmatic approach to the program, Kohout said. "We love the fact that partners are working with us on building the program," he said. "We'll need time to evolve the program rather than rushing things through. We're taking a thoughtful approach to the evolution of the program."

Whether the changes to the EMC Business Partner Program are good or not depend on the partner, said Jamie Shepard, regional and health systems senior vice president at Lumenate, a Dallas-based solution provider and long-term EMC channel partner.

Shepard, responding to a CRN inquiry via email, wrote that Lumenate, formerly a signature-level partner in the old EMC Velocity program, fell to the silver level in the new EMC Business Partner Program.

Shepard wrote that, during his six years as a member of EMC's partner advisory board both with his original firm, ICI, and later with Lumenate after it merged with ICI, he was very vocal in advocating some sort of revenue-based levels in EMC's partner program.

"Marketing funds were being used to pump up smaller VARs to become EMC-enabled, and the larger ones like ICI/Lumenate were sharing funds with firms that [had] not invested in EMC," he wrote. "This was during [EMC's] quest to take [back] the Dell business they lost and enable over 3,500 partners globally."

However, Shepard wrote, that effort failed last year, and EMC decided instead to go deep with partners who invested with the vendor. "That was actually something that I wanted badly when I addressed this openly to (EMC Senior Vice President of Worldwide Sales) Gregg Ambulos during Advisory Board meetings," he wrote. "I wanted firms to have a minimum criteria for revenue to EMC along with it a minimum criteria of technical pre-sales, implementation and sales certifications in key areas, not all but key core ones."

However, Lumenate, which holds every certification necessary to be a top EMC partner in the EMC Business Partner Program, saw a drop in EMC revenue in the time following the merger, and got knocked out of the top level because of the new revenue thresholds, Shepard wrote.

"[The plan was to] weed out the partners that just sucked marketing funds dry with idle promises of more revenue and more training and reward the partners that actually drive a minimum of revenue along with all certifications," he wrote. "We just lost on the revenue piece and that knocked us out of the lion's share of funds. Many partners that were growing and doing well also fell victim to this plan. The ones that maintained or fell in revenue but not enough to be stung by the program are getting a ton of attention and funds to help grow their businesses."

Even so, Shepard wrote, Lumenate has recently added new EMC-focused resources and hired specialty reps in its health-care division that primarily drives EMC solutions. "We will be back on top of EMC soon," he wrote. "We have not given up. It is now a very focused goal to get back to the higher revenue status and we only missed by a few million."

The new EMC Business Partner Program has been a "pain," said another smaller EMC solution provider who requested anonymity.

"The Velocity program was very successful," the solution provider said. "I was knocking down doors with EMC. But with the changes, sometimes people are not as compelled to lead with EMC. It can be easier to work with other vendors."

Eric Collins, chief technology officer at PCPC Direct, a Houston-based solution provider and EMC channel partner, told CRN that the change in EMC's channel program doesn't really change his company's behavior.

"Maybe we lead a little less often with EMC," Collins said.

There are not a lot of $100 million-level partners in the market, but those at that level can take advantage of the new levels in the EMC Business Provider Program, Collins said.

"Sometimes a customer specifies in an RFP [request for proposal] that the technology provider has a certain level to bid," Collins said.

"A company the size of, say, CDW can ask customers to specify certification at a certain level as a way to cut out smaller bidders. But we also do it to sell against our smaller competitors as well."