Progress apologises for neglecting the channel

Business application platform vendor looks to rebuild ties with the ISV community after admitting to taking eye off the ball

Business application platform vendor Progress Software has apologised for "neglecting and alienating" its channel during a period of integration overseen by its previous chief executive.

Richard Reidy took the helm of Progress in 2009 to unify the disparate portfolio of products it had built up through a series of acquisitions including Savvion, Apama, Corticon and Iona. He was replaced by Jay Bhatt in December.

Progress has a channel of 2,000 ISVs which embed its technology into their business applications. At one stage, they generated 90 per cent of the firm's turnover, but this dropped to 40 per cent as the vendor "took its eye off the ball" during the integration process, said Dan Veitkus, general manager of EMEA.

Former Novell EMEA channel boss Veitkus (pictured) said this figure had already clambered back up to 55 per cent since he joined the firm last July.

"When I started, a complete rebuild was required," he said.

"[The integration process] was painful but necessary. If we were to scale and compete against IBM, Software AG and Tibco, we needed to be punching as an organisation with 2,000 employees. But when tough decisions were required to shift the investment into the enterprise sales team or integrated solution selling, it was done at the expense of the partner base."

Veitkus immediately hired country managers to run the UK (where it has 126 ISVs), France, and Germany to help co-ordinate partner activities. He said the firm is also beginning to reinvest in training and enablement, as well as deal registration and market development funds.

"We are also designing a model by which our partners can consume all our technology on a royalty basis," he said. "This mitigates the upfront costs to acquire the technology."

Progress has also enabled partners to "infuse" the functionality of the BPM technology it inherited through its Savvion acquisition into their business applications.

"We have done the same thing with Apama," said Veitkus.

"So they can now offer two or three bolt-ons. Their annual maintenance contract with a customer may have been $50,000 (£31,700) – now they can go back and give them more value and charge $70,000."

The only reason more ISVs did not leave is that – unlike resellers – they will have built their business on the Progress platform, said Veitkus.

"ISVs are extremely loyal so mea culpa to Progress for alienating and neglecting them."

In the long term, ISVs should be generating 75 per cent of Progress's sales, Veitkus added.

"We are re-engaged," he said.