Value: The new black for channel programs

HandshakeToday marks one month since burst onto the scene.

I’m not telling you that because of any particular anniversary celebrations, but to set the stage for this interesting tidbit: in that month, we’ve covered the launch of new channel programs from Avaya, EMC, Brocade and Symantec, and the completion of Microsoft’s journey to its new Microsoft Partner Network program.

What do all of these new vendor programs have in common? A focus on partner value, certifications and specializations rather than revenue levels.

I’m far from an expert on such things, but I’m thinking that five major vendor programs going the same direction in the course of 30 days qualifies as a trend.

At this point, rewarding and incentivizing partners for the kind of value they add or the specializations and certifications they hold seems to be the logical “next step” for any vendor that’s reached any sort of critical mass in the channel. Consider if you will that of those five vendors, Brocade is likely the “smallest” in terms of its channel program – and it’s still a pretty broad channel program.

For vendors, it represents a successful path to getting partners focused and investing on its own priorities, and when it comes to technical certifications, it helps get partners ready to sell to larger customers.

For partners, it gives the “little guy” a chance to shine and rise up the ranks by investing and getting closer to vendor partners, and if done right can help to minimize the frustration partners feel by the perceived dilution of the top-tier partner brand. This was clearly one of the major motivations in the Microsoft Partner Network switchover.

It makes vendors stickier to their partners, and partners stickier to their vendors.

But it’s not without its challenges. If not architected carefully, a program that requires multiple certifications to achieve top partner status can prove detrimental to partners who focus on one thing and really do it very well. Especially in the era of partner-to-partner connections becoming more popular on multi-faceted and complex deals, this seems potentially out of line with the “depth” aspect of the value discussion, while clearly maintaining the value of the “breadth” aspect.

Microsoft has gotten around that particular challenge by tiering partners based on a specific area of competency – so a partner can be Gold in a product area or two, Silver in another few, and represent a variety of others without qualifying for elite status. But that approach brings its own challenges – it adds some complexity to the branding partners can offer from the vendor.

What have those who’ve been doing this for a while learned from their own efforts?

I recently had the chance to chat with Edison Peres, Cisco Systems’ new worldwide channel chief and an executive who’s been helping to drive Cisco’s partner program for most of the last decade. Cisco being one of the first vendors to shift away from volume towards rewarding value (it started its journey at its 2001 Partner Summit), I was curious to see how he felt about the model becoming more common. Peres’ reaction? He’s surprised it’s not much more common than it is. “I’m always baffled by why more vendors haven’t gone down that path,” Peres told me.

Here are some other thoughts from Peres on what it has learned in its nearly a decade of putting the focus on value as opposed to volume:

  • Size still matters, so “it’s hard when you tell a billion-dollar partner that they’re getting the same discounts as a million-dollar partner who drives the same value.”
  • The market values it because partners come in with a greater level of expertise.
  • Partners like it, as long as you’re consistent. “You have to give them faith and they’ll invest accordingly.”
  • The program is not just about paying on value-add, but on “paying on the behaviors you want.”
  • Creating that kind of focus has allowed Cisco to add new technologies to its lineup much more easily. Consider this: Peres said the company’s data centre specialization has been “the fastest growing specialization we’ve introduced over the last ten years” despite much of its scope falling outside of Cisco’s traditional network-centric view.