Novell enhances channel program to boost partner profitability 12 February, 2009 By Vanessa Ho

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"For the last several years we've been pretty clear that we are a software company and for the kinds of software that we sell, partners are very important to our business," said Scott Lewis, vice-president of global partner marketing and enablement with Novell. "What you have seen in recent years is a reduction in total capacity of us doing consulting services around our products and exit all together from consulting businesses that were not directly related to our products in the market."

The company also increased investments in sales, marketing and enablement support for partners. The new channel leadership roles and partner program improvements align with Novell's growth objectives in data center, end-user computing and identity and security solutions.

"We have shifted our company strategy to a partner-centric model to meet our aggressive growth targets," stated Javier Colado, Novell's vice-president and general manager of Partners. "This can only be achieved through a strong, well-supported partner ecosystem. Our focus is to drive an industry-leading profitability program - while decreasing our partners' investment requirements - and improve sales and marketing support. Our goal is to encourage new and existing partners to use Novell solutions to help customers reduce cost, manage complexity and mitigate risk in these tough economic times."

Elements of the enhanced global channel program include increase partner profitability where Novell has adjusted the program's margin structure to improve partner profitability and business by restructuring discounts and volume incentive rebates where if a partner exceeds a certain threshold of business with Novell in a year, they get an additional rebate (as much as three per cent) based on hitting that threshold, said Lewis.

"It helps a customer who is trying to decide amongst many vendors in their portfolio which one to focus on and that Novell is a partner worth focusing on because Novell has an additional profit associated with it," he added. "It also creates a better business relationship and reason for our channel managers to better help the partner with their business."

In parallel with that, Novell has introduced some improvements to the way the company handles marketing development funds (MDF) that is now more structured to provide some guidelines in how to submit a proposal to get MDFs in order to do marketing activities.

Novell also introduced a deal registration program to provide margin protection.

In addition, the company has expanded training offerings to include on-demand sales and technical training to make it more convenient and cost effective to acquire Novell solution knowledge. Novell also implemented a quick-start program to accelerate time-to-revenue for newly recruited, high-volume partners. To help build partners' services-based business, Novell will offer access to deployment training, best practices and methodologies and Novell professional services experts to mentor and ensure customer success.

As well, Novell has reduced administrative costs and simplified the ordering process by consolidating product SKUs and introducing a single price list. The company also introduced standardized volume discounts which will streamline a partner's ability to negotiate large customer opportunities.

Novell has also shifted the program from a site or branch-oriented program to a company-level program. Lewis explained that if a partner has offices in six cities, they no longer have to pay the program fee six times if they wanted to be a partner in those six cities. Potential partners only have to join the program as a company then provide Novell with the contact information, of that branch office in another city.

It costs partners $1500 a year to be a Platinum and Gold partner. Silver partners pay $500 a year.

Also through 2008, Novell significantly realigned resources to further strengthen the channel organization and accelerate the internal transformation to a more partner-centric company. The company increased five-fold its level of investment in channel-based sales and marketing programs and increased the number of dedicated channel sales professionals four-fold.

There are currently 3200 solution providers and integrators that are Silver, Gold and Platinum partners in Novell's program.

Lewis said it is all about quality and not quantity of partners but does expect some growth especially in the number of Gold and Platinum partners because enhancements made to the program are attractive to partners in those tiers.