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by William Van Winkle |
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Gartner’s IT ChannelVision is an incredible event dedicated to bringing together sellers and vendors from throughout our industry. It is an event about not only building insight but also turning potential into reality. The Annual RAM Awards, presented at this years IT ChannelVision, are about exploring the reality of this year’s market and the potential it holds going forward. For the last several weeks, Reseller Advocate readers have flocked to our Web site and cast their ballots in our seven award categories. From the results, we can see that some priorities in the channel have remained the same while changing trends have brought some new faces to the fore. Ours is a fast-paced, exciting time in which smart partnerships and creativity pay handsomely and the old rules of beige boxes yield diminishing returns. We’re proud to help give voice to the reseller community and recognize those who offer exceptional value and innovative opportunities to the channel. |
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RAM Award: Best Distributor Some distributors have the best pricing. Others have the best service or selection or inside sales. We’re talking about the whole enchilada. Which national or multi-regional distributor offers the best of all worlds?Winner: D&H Distributing
“In 2004, D&H was spending a lot of time talking about digital convergence,” says D&H vice president of marketing Dan Schwab, offering one example. “That’s still true this year, but we really doubled down. We’ve been working very closely with Intel on their digital entertainment systems, working also with Intel and Micrososft on more server-level solutions, working with people like ASUS and AOpen on some of their new technologies and differentiator products, like their whitebooks. We’ve been working with software manufacturers to develop OEM programs—people like Computer Associates, Symantec, and Dantz—to create programs specifically for the system integrator channel.” Every company says it listens to its customers. But D&H has proven to be one of the most attentive distributors in the industry and really did listen when it heard that system builders were tired of being closed out from the consumer electronics market. Today, D&H sells all of the hottest gaming consoles and handhelds, not to mention everything from plasmas to portable audio players. “In calendar 2006,” says Schwab, “we see a tremendous amount more energy in the server business. It’s clear that small to medium businesses are moving more from desktop- level solutions to the server level, and we plan on being ahead of the curve by offering some of the products that are part of that solution. For instance, our addition of Cisco Systems lets them sell a more advanced networking solution when they’re selling server technology.” RAM Award: Best Reseller Program A good reseller program is characterized by dedicated, effective tech support, a Web site stocked with everything from downloadable product updates to customizable marketing collateral, and marketing funds to help promote the vendor and reseller together. But what about incentive contests, education programs, and other less obvious benefits? Which channel program is the best?Winner: Seagate Partner Program
Last February, Seagate unveiled its revamped Seagate Partner Program (SPP), and it turned out to be more than most anyone expected. Sure, there was the obligatory portal, and Seagate was a bit late to the game in bringing on dedicated toll-free pre- and post-sales support by both phone and email. But more important changes include discounted eval products, which on the surface is nothing particularly unique. What matters is the product in question and the timing of its evaluation. “In the last four or five years, there has been a shift where early adoption of new technology in storage is really coming from the channel,” says Seagate’s Jennifer Bradfield, director, Americas channel marketing. “System builders are trying to get an edge and find a differentiator product from the tier-ones. They want the earliest possible product we have to offer. So we’ve been making those available through this new SPP program—early evaluation units at a fairly deep discount. And those are available several weeks before volume availability in the channel. That’s one advantage we give to SPP members.” Also unique is partners having access to Seagate’s Design Service Center in Minnesota. Formerly the testing and development playground for only a handful of tier-one OEMs, the DSC is now open to even small resellers for R&D and refining of their configurations. Seagate offers use of the facilities to any program partner for 50% to 75% off of the standard price—significantly better than you’d find with any competing facility with professional equipment and technicians able to evaluate acoustics, airflow, thermals, vibration, and so on. Another new facet in Seagate’s program offerings is online education, and not just of the product info page variety, although there’s certainly a lot of that. Seagate knows that good resellers need to understand context and how products fit within trends and solutions. From that evolved the company’s popular webinar series. Naturally, the old regulars—rebates, promotion info, referrals, and all the rest—are still a part of the SPP. Seagate elected not to ditch the previous program elements that were working, only to build on top of them. Apparently, the plan is working. According to Seagate, program membership is up, and members not only buy more product but return quarter after quarter far more regularly than non-members. Knowing this, Seagate is not content to rest on its laurels but plans on making the SPP even better in 2006. “We’re looking at offering more rewards for loyalty,” says Bradfield. “We already have a rebate program based on how much you buy of which product, and you get a rebate of X dollars per product. But that doesn’t really help people who want to get their hands on, for example, marketing or training materials which can help them build their business. Of course, we’ll continue to have rebates going forward, but we want to let partners choose from other items with a points program, too. We’re working on developing the actual details and offerings right now.” RAM Award: Best Margin Opportunity Smart business is about getting the maximum return for your sales efforts. We know that some VARs excel in creating high-margin custom solutions for their clients, but we’re looking for the best margin opportunity from a single product that can be sold off the shelf and is applicable to a reasonably broad audience.Winner: Computer Associates eTrust EZ Product Line Computer Associates launched its overhauled CA Channel Partner Program in July of 2003, creating two new program categories applicable to the majority of resellers: Affiliate and the higher volume-oriented Premier. Both categories can earn generous rebates, with Premier accounts also accruing MDF. This, combined with aggressive channel marketing and excellent product quality, was enough to land CA our Best Margin Opp honors last year. Apparently, the deal was good enough to carry resellers through 2005.
Right about the time CA will be picking up its 2005 RAM Award, D&H and others will start selling the eTrust Internet Security Suite, comprised of the company’s antivirus, firewall, anti-spam, anti-spyware, and parental control applications. The 2006 suite already comes with a bottomdragging $69.99 MSRP, but CA throws another bonus to the channel by offering several ways end-users can earn an additional $40 rebate. One way is to demonstrate existing ownership of another CA consumer title; another is to show proof of a PC or notebook purchase within 30 days of buying the Security Suite. Any way you look at it, the deal means more dollars for the reseller. And, of course, once the customer sees the value in CA’s security, the door is open for follow-up sales with CA data transfer, backup, and other products. Specifically targeting Symantec, Famularo notes that CA’s suite has superior technology and will reach the marketplace through a greater number of avenues. Additionally, it will arrive with lower pricing than the major competitors, allowing resellers to increase margins still further. And unlike in the past, the 2006 consumer suite will have the full backing of CA’s channel muscle, including MDF, marketing, and sales force assistance. RAM Award: The David vs. Goliath Award Which vendor who does the best overall job of helping system builders and VARs go head-to-head against mass merchants and e-tailers? We’re looking for vendors who can help a little David partner go out and beat a mighty Goliath retailer in a fair fight.Winner: AMD
“More than half of our revenue worldwide comes from the channel, so that’s a very key audience for us to listen to,” says Gary Bixler, AMD’s worldwide channel manager. “We really do pay attention to what they say and what their customers want, and we try to build our products to meet those requirements. Clearly, our 64-bit product line is the most shining example of that. We had several options for what to do there, but customers made it clear that they wanted backward compatibility and low migration costs. Another more recent example is dual-core. We went to great pains to make sure that our dual-core products were pin-compatible with our previous single-core products, both on desktops and servers. You can just trade out the old chip for the new one, and at most you might have to update the BIOS. For smaller organizations especially that can’t afford to be changing configurations all the time, it’s a tremendous value play.” In a sense, the market’s adoption of x86-64 extensions through AMD’s urging and example is a David and Goliath story in its own right, just as the DDR vs. RDRAM case was before it. As you might expect from an underdog, AMD excels at finding ways to stretch the value in existing resources. That’s really what AMD processors are about: value. Getting more performance, functionality, and futureproofing per dollar than competing products. The best part is that these AMD SKUs are largely a channel play. “The channel story, of course, is the battle those guys face against Dell,” says Bixler. “There has been a mutual agreement between our companies not to have AMD chips in Dell systems, and I think that has gained us a lot of favor with the channel because it gives them tremendous differentiation in offerings versus Dell. And it’s not something trivial that Dell can’t sell. It’s something that’s obviously in demand, highly recognizable, and a respected technology in the market.” This was the year in which AMD was truly able to step out from Intel’s shadow and demonstrate market leadership. Customers understand and respect that, and many are willing to buck the mainstream and pay for that leadership. AMD is by no means a niche solution, but it is the path less traveled, and an increasing number of people are finding that path leads to a better place. RAM Award: Best Channel Product Some vendors let resellers slug it out with mass merchants and e-tailers. Good vendors take steps to protect their channel partners with products specific to VARs and system builders. Which of these products is best, though? Which channel product not only presents a great up-front opportunity but also long-term returns?Winner: Microsoft Small Business Server
There are three key things that make SBS a channelfriendly product. The first is the incredible money-making opportunity SBS presents for reseller customers. The minor part of this is the $599 price for Standard Edition or $1,499 for Premium. Far more important are the related purchases often tied to an SBS installation. “When a customer buys a server,” says Microsoft’s Lewis Lin, Windows Small Business Server product manager, “more often than not they’ll also upgrade their desktops, whether it’s Windows 98 to XP Pro or just brand new machines. But they also might get other non-Microsoft software, such as antivirus or a backup solution or some kind of monitoring solution. So SBS represents a much bigger deal than just the title.” The real SBS money, though, sits outside the box in the form of services. Some industry figures indicate that the margins on services are between 25 to 60 percent. “Even in the small business space,” says Lin, “services revenue on just an initial server deployment could easily be in the five-figure range. Then there are monthly maintenance issues. Remote monitoring is one example. You have to make sure that the Exchange server is up at all times because email is the most critical app for many organizations these days, and you can’t afford downtime. Monitoring that 24 x 7 is a great reseller opportunity. Patching is another one, both for servers and desktops, and SBS has some capabilities to help manage desktop patching.” The directions in which a reseller can take an SBS deployment are essentially unlimited. The trick is getting the training to understand your configuration options and how to translate these into services your organization can implement effectively. Fortunately, as mentioned above, Microsoft’s channel program does an exceptional job at delivering this. You’ll also get the full weight of Microsoft behind you in marketing SBS. This spans from customized, co-branded mailing campaigns to all of the advertising Microsoft does for SBS to help generate market pull. The goal is that by the time you walk in a client’s door, you should already be half-way to closing the sale. What makes SBS such a powerful channel play is that you will be in a unique position to explain why SBS will solve your customer’s needs and how you can build a custom solution wholly unavailable through retail means. RAM Award: Best Sales Force Everybody needs help, but some vendors are better about providing sales help to their partners than others. Which vendor has an exceptional inside sales staff that always gives you exactly what you need to close the deal? How about the outside sales rep who not only educates you in your showroom but goes to bat for you with your clients? Got a vendor that can even offer you both? We want to know which vendor has the best sales force in the industry.Winner: NEC Display Solutions of America Some product lines and vendors seem to age well. Fine wines come to mind. Many of us frequent the same jewelers, physicians, and tailors our parents did. In an industry that thrives on change and novelty, there’s still a lot to be said for the benefits of experience and constancy. This must be why NEC Display Solutions captured top honors in our Best Sales Force Award.“We have a very experienced, channel-centric sales organization,” says vice president of sales Clark Brown. “I’ve been with NEC for 17 years. Most of our senior executives have been over 15 years with the company, and this filters down into our sales organization. Most of those guys have five years in the channel or more. Even the youngest person has been out there calling on our channel customers.”
We all have dealt with sales departments that work off of glossy spec sheets, and when you’re in the field with a vendor, the last thing you want to hear him say is, “I’ll have to get back to you on that.” A good sales force exists to fill in the blanks left by product pages and Google searches. Particularly in an upscale, high-margin product area such as large displays, expertise is critical. If your vendor doesn’t have the people to back you up, the worst thing that can happen is you actually win the bid, because the mistakes you make in the pre-sale and installation phase will kill you down the road. Experienced salespeople doesn’t mean a stodgy organization, though. You don’t get huge on a brand like Multi- Sync and then rest on your laurels for two decades. NEC’s sales staff are constantly having to update their knowledge and methods, and the company’s sales priorities and resources shift accordingly. “This past year,” says Brown, “we added four people dedicated to some of the solutions sales opportunities. Some of our large-sized LCDs are being combined with total solutions for the channel. So we’re trying to educate the channel on how they can go out and sell digital signage and digital advertising types of opportunities. We’ve also segmented our channel sales arms into distribution and others strictly on resellers. We’ve added more bodies on the reseller side in this past year and really tried to work with our top partners and give them higher touch ratios, getting out to visit them more often. We’ve also expanded our inside sales operations for resellers, too, in an effort to have total coverage of the reseller community.” NEC monitors may have gone through several company name changes over the years, but the product quality has remained top notch. Today, NEC LCDs represent one of the best margin prospects around in the display space on selling price, installation revenue, and manageability services. If you didn’t vote for NEC here and haven’t sampled the advantages of the company’s sales group, you’re missing out. RAM Award: Best Marketing Buddy You’re a PC reseller, not an advertising agency. Marketing is another area where resellers can benefit immensely from a vendor that gives them the tools they need to lure in new business with maximum efficiency and lowest cost. Who’s your best marketing buddy?Winner: Intel Everyone makes mistakes. Most of us hate to admit it when we do, but the smart ones fess up, learn, and move on. Industry leaders are no less immune to this than the rest of us. This is why we were so impressed to see Intel come forward and explain why it felt resellers had voted it into our Best Marketing Buddy slot. This was not a tale of wealth and influence but one of finding new energy through fixing problems.
This revelation played a large part in how Intel shaped its channel program, bringing marketing resources to the fore in an effort to make sure that all partners were on the same page pursuing the same broad technology goals. “We have created from scratch a whole new set of tools and collateral for the VAR market,” says Turner. “Because what helps a system builder sell a box is not what helps a VAR sell a solution today. Things like, what are the benefits of Hyper-Threading technology to a school? How is Advanced Management technology going to help you with the banking or medical office you’re selling to? The program is really about how you sell in verticals.” Naturally, not all of Intel’s channel marketing efforts are going toward VAR education. Intel has campaigns based around the digital home, getting into the server market with Xeon, and a whole “Build Your Own Notebook” marketing kit, which even includes flyer templates and artwork for T-shirt designs. Key Channel Player:
Gartner’s System Builder Summit and VARVision events (now IT ChannelVision) have become channel staples. However, Gartner has additional Summit and Vision events aimed at filling in every opening from top to bottom, the most recent of which is Small Business Vision, which debuted in 2005 as an eight-location road show seeking to address the needs of the reseller “masses” that so often go ignored. Working with Gartner senior global director Eric Lesonsky, Phil McKay has emerged as the point man entrusted with fulfilling Gartner’s channel event agenda. Perhaps more than anyone else in the industry, McKay has done more in the past year to unite the many disparate groups within our business and help them cooperate more effectively and profitably. His passion for the job is infectious, and we’re certain this year’s Key Channel Player will accomplish even more in the year to come. RAM: What is your goal for the Vision events? PM: We’ve tried to align all of the channel partners together and have a community, not just an event. I mean, we’re just a spoke in the wheel of that community, but we can be a catalyst to bringing that community together because we organize that face-to-face part of it. We’ve gone out to the key partners—and that means the vendor community, the associations with NASBA and CompTIA—and found the best partners that want to be part of growing something bigger than what they are. It’s really not personal. It’s about the greater good for all. RAM: The industry has plenty of road shows. Why are yours different? PM: We’ve emphasized being open. We couldn’t have built this event into what it is if we’d just used Gartner’s database. On our Web site, we help build the community with news. Anybody can put up on the site what they believe is important to them and the rest of the community. And the hits on our Web site have quadrupled over the past year. And we’ve delved into spaces that nobody else wanted, like the small business space. They were the forgotten mass of people within the community, and we’ve started this road show of eight cities this year, ten cities next year, and within that partnership, we’ve brought all these people together—D&H, Ingram Micro, NASBA, CompTIA, Channel Match, and many others—to drive the community for the greater good. In IT ChannelVision, we brought the enterprise service providers into the event. So now we cover the channel all the way from small business through the mid-size and up into the enterprise space. Because a small company is going to aspire to be a mid-size company, and a mid-size will aspire to be an enterprise. People get to see all these new products they never would have seen before because smaller vendors don’t have the reach to get into the enterprise space. And now there’s all kinds of business being written because of the event. RAM: Having just wrapped up the first year of Small Business Vision, what benefits do you think this event brought to the channel? PM: Tier-one vendors could never find these small reseller people. It’s opened up new avenues for reaching their products and services that they’re now able to bring to the small business space. And it’s almost like a cult following. Because in the small business space, an operation might only be 10 or 15 people, and these are not the people that would go to a show. When they leave the office, they’re not putting any bread on the table. We’re opening these people up to vendor presentations and partnerships that they never would’ve seen before, giving them Gartner insight into the small business space, which is really invaluable for these people. But I think the biggest thing we do with any of our events is we open them up to peer-to-peer interaction. They learn more from each other than they could ever learn from a book or from vendors. |
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