Partner investment is good, but too much change could backfire 6 May, 2007 By Patricia Pickett

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Mountain View, Calif.-based Amazon Consulting's first-annual State of Partner Programs survey targeted primarily U.S.-based vice-president and director-level executives responsible for channel and alliance management at 250 software and hardware vendors. Fifty-five (22 per cent) of those invited to participate in the survey responded. Participants have a global business focus and have built relationships with 500 or fewer partners in the U.S. and fewer than 5,000 worldwide. Fifty-eight per cent of respondents were from large companies with revenues of more than $500 million; 22 per cent were from mid-sized firms, with revenues between $200 million and $500 million; and 20 per cent were from small companies, with less than $200 million in revenues.

The survey questions focused on three key areas:

• Partner information, including category types and value to the company, services trends, loyalty and turnover, profitability and incentives;
• Partner program information, which dug into information on revenue and spending, resource investment and program structure; and
• 2007 program objectives, which covered overall objectives and key issues, priorities in spending, as well as challenges and opportunities for the coming year.

The role of partners in vendor growth is, in turn, leading to increased investment in partners. "Vendors are continuing to increase in people and processes to make these partnerships successful," said Krakora. Vendors are concentrating on increasing partner readiness and profitability, and simplifying the process of partner-vendor interaction. Specifically, 62 per cent of respondents said they are growing the number of people managing the programs, "rather than pushing (partners) through a PRM (partner relationship management) system," said Krakora. Of those respondents, 23 per cent plan to grow the people investment less than 20 per cent, while 39 per cent said they are increasing partner management staff more than 20 per cent. In addition, acquiring more partners came up as one of the top initiatives for 2007, with 85 per cent of respondents saying they plan to recruit new partners in 2007.

The focus on the partner's well-being contrasts sharply with what Amazon thought would be more important to vendors, such as partner loyalty, cross selling and "a general 'What's in it for me' attitude, which has been very prevalent among vendors in the past," Krakora said.

While vendors seem committed to invest in their partners, the associated changes could pose challenges for the channel. Some of the top initiatives vendors cited for 2007, including globalizing and overhauling partner programs, changing partner strategies and integrating acquired companies, all involve program changes that pose challenges from a partner perspective. A partner may have just figured out the details of a vendor program -- margins, order process, deal registration, available tools and support -- only to have the vendor change the program on them.

Case in point: Symantec Corp., which spent the last two years combining its own program with that of acquired firm Veritas. After the recent launch of Symantec's software as a service (SaaS) model, "the first call I got from a partner working with Symantec was about, 'I finally have my feet back on the ground -- how will (that new model) affect me now?'" said Krakora.

"Resellers and solution providers are organizations that have plotted out their future for next few years based on what they've known in the last 10 to 20 years. New markets bring opportunities, but too much change can be scary," she explained. The key for vendors will be to find a way to strike that fine balance between too much change and stagnancy.