As we've noted many times in this
magazine, partner programs are critical. A good suite of partner program benefits can make the difference between sales success and profitability for a reseller and the slow trickling away of capital into nothingness.

We've also discussed one of my biggest industry pet peeves: lame programs that offer nothing of value to the reseller and seem only to serve as a vehicle for increasing email spam. One example comes to mind from a few months ago when I was interviewing the vice president of something-or-other at a certain storage company. He droned on and on for 15 minutes about the new program he and his posse had crafted and how cool it was, how groundbreaking, how it was going to revolutionize the ability for system builders to compete in this product space. One facet of this revamped program was the great discount and rebate offerings the company had initiated for its partners. While Mr. VP was blathering about the incredible discounts off MSRP he was now delivering, I hopped onto Newegg.com.

"I'm just curious," I said when he finally paused to take a breath. "Do you realize that I can buy your product online right now for less than your channel partners can get it through distribution under your new plan?"

Mercifully, the call ended shortly after that. I found out a few weeks later that Mr. VP was no longer with the company.

The fact is that building a strong channel program is hard. Really hard—especially for companies that play in low-margin product segments. This is why you see so many companies fall back on what I call the LCD (lowest common denominator) program approach. Just throw up a Web site, slap a password gate on it so you can call it a portal, stock the site with the same product info and support resources available through the regular public site, and slap on some content about "exclusive promotional programs." The key feature of an LCD program is the infamous email newsletter, designed "to keep partners current on the latest products, company news, market trends—and more!"

Like you, I've ended up on countless such email lists, and I just shake my head at the thought that someone gets paid to write such drivel. Somewhere within the vendor company, some marketing guy gets to sit in front of his boss and proudly say, "Our channel program now reaches over 50,000 partners." The boss gives the marketing guy a big pat on the back, and out there in that partner base, two or three resellers might even be glad they're on the program list.

Resellers don't care about being in LCD programs. Vendors that run LCD programs obviously don't care much about their partners because LCD programs are inherently selfish. They serve to benefit and glorify the vendor, not deliver meaningful services to the reseller that can positively impact his business over the long term. Even program elements such as MDF and rebates, much as they can bump some bottom line numbers for the month or quarter, are a short term enhancement that only push the reseller into seeing the product in terms of dollars and cents. Quite often, resellers don't even pour these dollars into building capital, only in dropping system sale prices

Perhaps the best encapsulation of this idea came to me recently as I was speaking with Seagate's Desa Zraick, director of global channel programs and development.

"Everybody always talks about the value proposition, and that's fine," she said. "But a value proposition is why somebody would buy your product. A business proposition is why somebody would sell it. I'm all about the business proposition. All of the programs that we are building out and our future channel roadmap here at Seagate are all based on business proposition enhancement so that we can make a direct impact on our partners' profitability."

I had an interesting talk with Zraick in which we discussed some of the changes happening with Seagate's partner program. I've been impressed with Seagate over the years for placing more emphasis on channel relations than I've observed with its competitors, yet it's interesting how some of these efforts weren't formalized within the company's partner program. For example, after upwards of two years of emphasizing building up a strong channel program, Seagate is only just now implementing a dedicated reseller tech support phone line under the umbrella of its new Seagate Partner Program (SPP). Previously, resellers had to get in a general 1-800 support queue along with the mass of end-users. Now, resellers have their own phone support line in addition to email, chat, and Web support resources.

Seagate also didn't have a reseller portal per se, which I think says something about the necessity and utility of such things. After all, if you take your existing content, stick it behind a login screen, and throw on some RSS news feeds, is it really that big of a deal? Are people really going to use a product vendor's partner portal for their daily news, particularly when the same news feed is available from hundreds of other similar sites? Still, this portal design is now so pervasive that it was starting to look odd for Seagate not to have it...so up it went.

"It's really easy to come up with a list of check boxes and say, well, all our competitors have this, this, and this in their partner programs, so we better do the same and level the playing field," said Zraick. "But that's just mediocre as hell. What we're really focused on is adding that extra value and going the extra mile. We want best in class program elements, not just more check boxes."

Amen to that. Of course, it's one thing to say it and another to do it. So I asked Zraick for proof.

"Well, previously there was a lag from when a new product was released to when the channel picked it up," she said. "We're trying to shorten that adoption time. When manufacturers release a product, the first allocation is usually for the OEMs, right? Then there's some for the channel, but the biggest system builders who get preferential treatment tend to soak up whatever is left from us and from distribution. So we developed an evaluation program that allocates a finite amount of product for system builders so they won't have to wait a month or two to get their hands on a new product for testing."

"Our Design Center didn't used to be open to the average system builder," says Zraick. "It was pretty much the domain of the top five OEMs.

OK, not bad. Finite allocation may not mean plenty of stock for everyday sales right out of the gate, but it should guarantee a unit for new configuration testing. Couple this with Seagate's newly implemented deep discounts on eval units and that's not a bad development for SIs who are serious about developing configurations aimed at certain markets or niches.

However, I thought the biggest news to emerge from our conversation was the opening of Seagate's Development Center in Minnesota to its reseller base.

"Our Design Center didn't used to be open to the average system builder," says Zraick. "It was pretty much the domain of the top five OEMs. But now we've designed some special programs so that regular system builders have access to those design center resources, which will give them access to a wide breadth of technical support personnel, labs, and the wealth of information we have on our products and the technology behind them. So as they add our products into their new systems, this should help reduce their development costs and get them to market faster."

At first, I didn't grasp the significance of this offering. Then I saw the pictures of the facility and its testing equipment, and suddenly things started clicking into place. For instance, I just got done reviewing a new desktop MCE system from a Tier 2 OEM, and I had to give it only three out of five stars—a kiss of death in a national consumer magazine. The box ran too hot, it had significant airflow problems, there were vibration issues, and, above all else, it was simply too loud for living room use. Like many system builders, this OEM had assembled all the right components but then not done its due diligence to ensure a satisfactory end-user experience. Had this OEM availed itself of Seagate's Design Center, it could have worked with lab technicians to identify and rectify thermal, acoustic, and other problems, not just inherent to the hard drive but of the entire PC. The sale of hundreds, perhaps thousands, of these boxes might have hung in the balance.

Desa Zraick reviews Seagate’s integrated go-to-market plan with two of her channel marketing team members.

No, such services aren't free. But until now they've only been affordable to very large system builders. Seagate is offering Design Center discounts from 50% to 75% to all of its partners. Seagate's only stipulation is that you can't bring in a competitor's drive for comparison testing. Still, if you're in a market where sales hinge on performance criteria, this could be some of the smartest money you ever spend.

Even if you don't make it to Minnesota, you could still benefit from the new archive of Web-based seminar videos Seagate is amassing. The company has a four- to six-quarter roadmap of topics already planned, and these will complement the collection of videos Seagate already has on hand. The goal is to offer, as Zraick calls it, a curriculum focusing on Seagate's products and technologies, but videos will also leverage the considerable amount of research the company conducts in order to educate resellers on what the market's hot spots are and how to access them.

"We'd like to see people who are building 100 to 1,000 systems a month using these services," said Zraick, "because this can really help them grow, and they normally don't have access to these kinds of resources. They're fighting for their lives, and they're not going to grow up into the 5,000 or 10,000 or 20,000 system a month range unless they have some advantage."

Seagate promises these changes are only the opening shots in what will be a much more expansive loyalty program for system builders. My hope is that the program really does prove to be the "business proposition" Zraick envisions. If so, the rest of the industry may just catch a clue and follow suit, and that would be good news for everyone.