Adding a New Vendor to your Arsenal - A Partners Perspective

Last week I wrote a post on recruitment from a vendor's perspective, today I'll look at it from a Partner's perspective. While the vendors are looking to recruit new partners, the partners are analyzing the cost/benefit of taking on a new vendor's product. There are more considerations than one would think.

1. Is the vendor's product a good fit for your arsenal? If you focus on virtualization and cloud computing with products like Hyper-V, VMware, Salesforce.com, and StarWind then EMC approaches you about selling one of their Back-up and Recovery products you certainly aren't going to change your entire business model to add on additional product.
2. What is the ROI of introducing a new vendor? To sell a new technology and do it right there are costs incurred by you and your team. You must figure out the value this partnership could bring you (i.e. REVENUE) then subtract out the costs and decide if it is worthwhile. Costs include administrative, certification requirements (both time out of the field and the payment for training), changes to your website and other marketing materials, and marketing programs around the new products and services.
   
3. What are the benefits the vendor is offering? If the vendor product sells itself, great, but we know of few that do that (except for maybe Microsoft). Otherwise, you need to look closely at the level of MDF, technical support, training, incentives, and marketing programs this vendor is going to provide. Walking into a relationship saying "Where are my leads" isn't going to work; a) the vendor will see you as not valuable and b) what good are leads they give you if you haven't been trained to sell the product yet anyway?
4. Are you weakening any of the brands you already sell? I would never suggest that a partner should only have one vendor product per solution, however, you need to take into account that any claims may be weakened by bringing on a competing product. If you have based your company around selling NetApp because their iSCSI SAN technology is the best product for your trusting customers, you can't then take on Dell EqualLogic's iSCSI SAN touting the same thing. You would weaken your own brand as a trusted adviser. You could play on different uses for each (performance versus price), but you'd have to get pretty creative.
5. Does the vendor value you? This may be part of "the benefits they offer you" but I felt it was important enough to get it's own bullet. Does the vendor truly value you and their other partners? Do they have a reputation for dealing poorly with channel conflict between their direct reps and partners? Are their requirements in-line with the benefits they offer or are they asking too much? If you only do one transaction a quarter will they provide you with the support you need to improve that or treat you like a second class citizen?
   

Overall, taking on a new vendor is not a decision one should take lightly. It's like hiring a new executive or board member: are they going to add value, do they fit with the culture, and are they willing to learn from you as much as you are from them?

My opinion on channel relationships in general is that it must be one of reciprocation. I do not appreciate when channel partners expect to get leads or other benefits without putting any skin in the game and I do not feel vendors have the right to expect more out of their partners then they are willing to give. I think partners and vendors both have the right to decide if the other is a good addition to the team, and once they have, to treat each with the respect that the mutual relationship deserves. I'd love to hear others feedback, comments, or stories of a channel relationship gone bad!

What does Cloud Computing mean to the Channel?

I wrote a post 'Is Saas Channel an Oximoron' a couple of months ago but having just come from the Babson Alumni Technology Council's breakfast on cloud computing I wanted to revisit it from a different perspective.

There are huge opportunities in cloud computing, HUGE. Right now any developer with some business sense and a good idea could put together an application on force.com and let 'er rip! Salesforce's partnerships with Facebook and Google make that even easier.

What does this mean for the channel? Are solution providers going to become the new vendors? Is there going to be a flood of applications that crowd the space making prospects numb to their value propositions.

One thing I know for sure is that vendors and solution providers alike need to be more in tuned to the options out there and the way advances can and will effect their business.

Do you have experience building applications for the cloud? What are the pros and cons?

Is SaaS Channel an oxymoron?

In my last position I was working for a SaaS vendor that has a legacy premise based product being sold through the channel.  As our SaaS business picked up the channel was going to being selling that product as well.  Stepping away from this business I needed to take a look at how a SaaS based channel product differed from a premise based software or hardware for that matter.

Biggest difference?  MARGIN.  To sell something that has a one time cost of $1M is very different then selling something that has a lifetime cash value of $1M.  How do you incent your partners?  How are they compensated?  There's not much out there about this.  When searching on google the most recent document I found is from 2006.  

Anyone have more information or is doing this right now?

Are you a fair weather VAR/Solution Provider?

Do you belong to more partner programs then you have sales people?  Do you sign up to become a partner simply because your customer wants to buy that vendor's product?  Do you sign up for vendor programs then never complete the requirements?  With all of the vendors and products to choose from no one could really blame you, but is it truly benefiting your business?

The best way to get the most out of a channel program is to commit to the requirements and position yourself as the "authority" on that product or solution.  So why then do so many solution providers spread themselves too thin?  Should vendors have a referral program instead so the solution providers with customers ready to buy don't have to act like they are going to commit to the program?