Channel Post spoke to many industry experts who believe that part of building a strong and successful channel is linked to the ability of the vendor to adapt its initiatives and activities to all audiences
Channel partners are critical for the business success of any company. They can help open the door to new business opportunities faster, at lower cost, and with lower risk than a merger or acquisition. So it is really important you understand which of your channel partners can best help increase profitability and which of your channel partners have the most potential for a closer, more strategic relationship.
Vendors also need to understand that the balance of power is shifting. Gone are the days when channel partners begged to be included in vendor partner programs. Instead, channel partners have now become savvy about which vendor’s lines to carry and are trimming unprofitable vendors from their line cards.
In this dawning age of partner clout, where do you fit in the partner profitability formula? Are you providing enough opportunity for your partners to be successful in the market? Are your partner investments too high, resulting in a poor ROI for solution providers?
Channel Post spoke to some regional industry experts to find out more.
Let’s Talk About 2013
Elham Alizadeh, the Channel Marketing Manager at ESET Middle East says that overall, 2013 was a good year with some ups and downs. “However we ensure a much more promising year in 2014. We at ESET will work more aggressively this year to increase our regional presence and market share,” explains Alizadeh. “While doing so, we will ensure that our loyal partners enjoy the benefits of this conquest along with us.”
Isadora Gaggioli, the International Channel Operations Manager at Fortinet says that the key to all successful channel programs is to clearly find the right match between a partner’s expectations and what you as a vendor need them to achieve. “In 2013, this match has once again been achieved and our channel partners showed commitment as well as loyalty in following us in the enhancements and channel activities we delivered. This was expected, as many initiatives were based on their feedback,” adds Gaggioli.
For Osama AlHaj-Issa, the Channel Director for Middle East and Turkey at Aruba Networks, 2013 was a fantastic year for his company’s channel partners. “Aruba remains a 100% channel based fulfilment business and as whatever growth we experienced was through the channel. The big trends in the Middle East market today are cloud computing, big data, mobility and Bring-Your-Own-Device (BYOD) and as regional enterprises have begun embracing these technologies, our channel partners have acted as consultants and strategic advisors to end-users and successfully implemented technologies that enable these trends,” adds AlHaj-Issa.
Plans for 2014
Partnerships are relationships and in any relationship, if the other party is not thinking about you, they are thinking about someone or something else. The more profitable your partners are, the more partner mindshare you have. In order for vendors to grow their businesses with a partner, the partner has to be thinking of them. So what are partners thinking about when a vendor is on their mind?
There are several factors they ponder when evaluating the overall profitability or value of each vendor relationship. Although these elements are not weighted equally across either the solution provider or vendor communities, we divided them into two components: Opportunity and investment. The vendor’s goal is to create a significant return on investment (ROI) by making the opportunity as large as possible while minimizing the investment from solution providers (without making it zero).
Channel partners are very willing to invest with a vendor when they experience a high return. The more you invest, the greater the return and the more profitable you become overall. Hence companies have now started investing in initiatives that more and more help their channel partners in selling more and in the process generate more revenue for themselves and their channel partners.
“We have have recently launched ESET Partner Program which is strategically designed to offer our valued partners a wide range of benefits, certifications, trainings, and rewards thus ensuring our mutual profitability and success,” adds Alizadeh. “Our resellers are exclusively entitled to attractive incentives, rebates, co-marketing tools and other value adds.”
Alizadeh further adds that ESET’s main focus for 2014 will be on developing the channel in terms of partner enablement as well as size growth. “We had a very aggressive start this year with partner program launch, partner incentive programs, partner events in different countries and experienced a very good response. It’s really great to see that resellers are so responsive,” explains Alizadeh.
Gaggioli meanwhile adds that in this changing industry and competitive market, the dynamic challenge is to find the right balance between consolidating what is already in place in terms of education, proximity, profitability, channel marketing and regularly proposing new innovative activities. “In 2014, we set three objectives for our channel strategy based on driving partner sales and loyalty. One is to to propose more benefits to our most dedicated and committed partners. The second would be to develop dynamic and accessible partner training, and the third would be to socializing our channel with the core objective to build committed communities to help them succeed, rather than focusing on the technology and so on.”
AlHaj-Issa of Aruba Networks says that this year his company will be targeting more aggressive growth over last year. “Hence, our channel will play a bigger role in our success. We are focusing on building stronger channel ties and investing a lot in training and enabling partners, both in sales and pre-sales. We have seen that our partners also share our vision and enthusiasm and in turn they have shared their plans to hire more resources and invest in training,” adds AlHaj-Issa.
Glen Ogden, the Regional Sales Director of Middle East at A10 Networks explains that his company has a very busy year lined up with many partner events throughout the region. “We continue to invest directly with our partners, for example our Marketing Development Fund allows partners with our approval to accelerate sales through demand generation or customer activities. We believe ‘prudence’ is the watchword when looking for new partners and by design we are very selective over who can become an A10 reseller. We look for a small number of strategic partners in each region and only recruit on the basis of actual need. Keeping our channel partners to a minimum ensures good margins are available allowing our distribution and partner channel to grow and invest in their business.”
Adding Value to Succeed
AlHaj-Issa says that Aruba focuses the channel on adding value and not fulfillment or box moving. “When talking of wireless LAN, we train our partners to look at customer requirements and pain points and then design a solution around that. Our partners don’t just provide solutions that end with wireless coverage, but they also help with other business requirements,” explains AlHaj-Issa. “For example in healthcare, partners will help hospitals to run their hospital management system on top of the wireless network, for retailers that operate warehouses, partners will help them to run their active RFID network on top of the wireless network, in the case of security organizations, they may need to run their surveillance operations over WiFi and so on. So our partners always focus on solution selling which is obviously a greater revenue opportunity.”
A10’s Ogden adds that it is important his company’s channel community are thinking and talking the same language as his company’s, and executing business in the same professional and consistent manner. “We are 100% channel-driven, and operate a two tier model starting with key distributors in each region, who supply our growing channel partner community. Our channel strategy is based around choosing the right partners for each region, leveraging their expertise and customer relations and providing them with training, and on-site assistance when needed to help drive their continued growth,” explains Ogden.
According to ESET’s Alizadeh, having access to the right skills and resources is often a challenge for channel players and we address this through partner enablement and training sessions. “In our experience, partners are strongly inclined towards ramping up their skills sets. After all, customers now all demand ‘value addition’ and a qualified ‘return on investment’. So being able to deliver above and beyond what is expected is something that all partners are aiming to achieve. This is only possible with the right technical competency,” explains Alizadeh. “ESET regularly conducts trainings, many of which are free of cost, for its partners and twice a year, we even bring top technical experts from our global headquarters to the region.”
Part of building a strong and successful channel is linked to the ability of the vendor to adapt its initiatives and activities to all audiences. “Fortinet has a complete channel-specific program dedicated to sales, marketing and technical audiences. We count partner training programs, an educational live webinar series, group and one-to-one events,” says Gaggioli. “This coming year, our innovative event proposition is the Xpert Academy, dedicated to technical audiences with hands on training delivered by influential Fortinet technology experts.”
Every vendor should evaluate partner profitability, determine how they compare to the industry overall (not just technology competitors) and enhance formula elements to enrich their partners’ profitability — before it’s too late and partners resolve it for you. As in personal relationships, business relationships only thrive when we give attention to them. Since most business partnerships are transactional in nature, companies usually do not spend much time with their partners. It is important to remember that companies need to give time and energy if they want to grow a relationship thereby ensuring profitability for themselves and their channel community.