CA treats resellers to VIP programme
Analysis - Vendor goes back to basics with channel after past errors.
What a difference a year makes. Computer Associates (CA) wowed its channel partners at the 1998 CA World event by making an unprecedented commitment to push sales through third parties.
The Varsity scheme, a hybrid of CA's and Cheyenne's respective partner programmes - was formed to drive 50 per cent of the vendor's sales through the channel by 2002. Resellers were promised support and training by CA and were treated to a Workgroup Edition product line for SMEs that would be sold exclusively through the channel.
At this year's event in New Orleans, the industry would have been forgiven if it experienced a touch of deja vu when CA unveiled the VIP Channel Programme - dubbed as a partner initiative for the next millennium. VIP will replace the Varsity Club with immediate effect. It's a back-to-basics approach to the channel that, according to CA, will simplify and serve the needs of CA resellers more effectively.
So why the change? Aside from the superficial problems (the term varsity did not mean much to anyone outside the US - it actually means someone who has graduated from university), the channel found the old programme too broad and inaccessible. CA is a big company with a massive product range and resellers were unsure of their place within the company's strategy.
A source told PC Dealer: "CA has done well to engage the channel but it needs to engage better the reseller. There aren't CA resellers like there are Microsoft or Compaq resellers.
"CA is perceived as a technical company rather than a channel company. It gives out a product message, rather than a channel message. The company does have the right people and the network management space has huge potential, but CA also needs to improve the message," added the source.
Gayle Kemper, vice president and general manager for worldwide channel sales at CA, admitted that VIP was a result of extensive research. "We've spent a lot of time thinking about what makes a good programme, and we've looked at what competitors are doing with their channel and how we can take advantage of that. We need a solid training mechanism for partners because the pace of technology development is so rapid," she said.
Mark Stabler, senior vice president of channel marketing at CA, added: "Communication with our partners is absolutely essential. We need to link our product strategy to our partners' target market."
There were also significant issues surrounding CA's rules of engagement between its direct sales force and its channel. The software vendor has already moved to address this by naming the 30,000 or so accounts with which it deals direct (PC Dealer, 28 April).
CA's direct sales force has incentives to refer leads through the channel, and if a sales lead is not on the list of named accounts, then it has to go through a third party.
Liam Carabini, senior vice president and managing director, UK and Ireland, at CA, told PC Dealer that the company had effectively tried to run before it could walk.
"Our channel is very young and we're still learning. In the past, we did not get channel programmes exactly right because our technology is ahead of the normal reseller. We did not teach them properly and some had a problem with our long sales cycle," he said.
"Now it's very structured and sensible. We have the pipeline in place and we are at the bottom of a good curve,' Carabini added.
The VIP programme splits CA resellers' core markets into two tiers: an enterprise solution provider (ESP) level for partners whose main business is built on selling CA's Enterprise Edition and Unicenter TNG products; and a business solution provider level for resellers specialising in CA's Workgroup Edition and Advanced Edition products.
This tiered approach, together with greater emphasis on partner training - in both sales and product technology - is designed to give CA resellers the information and clarity that they have been crying out for, especially at the lower end, where the vendor is looking to establish a considerable presence.
According to Carabini, VIP will also help the channel to generate more of its own leads. "At present, we are having to develop the channel for them. Eighty per cent of leads are generated by us and we need to bring this figure down," he said.
Looking at the incentives that CA is offering the low-end resellers as part of VIP, the company's desire to succeed in the SME market becomes apparent. For the first time, partners will receive not-for-resale software across CA's entire product - regardless of the volume of business they do. Other key introductions include demonstration software, resource kits, and the promise of comprehensive training. All of these bear testament to CA's determination to keep in check moves into the SME space by rival companies such as Tivoli.
Mark Marron, EMEA vice president for channel sales at CA, said: "SME is an ever-expanding area for us and this is where the channel is crucial.
Securing a small sale can cost as much as going for a large sale, but resellers already have the relationship with SME clients.
"This is why we have been making more products available at the SME level," he added.
As corporates pull the reins on IT budgets in preparation for the year 2000, now is the time for CA to establish a sizeable presence among the medium-sized organisations. The VIP programme is making all the right noises, but it remains to be seen whether the company can avoid the mistakes of the past and, long term, communicate its message to the channel with clarity.