Sophos fashions partner program to fight margin erosion 21 April, 2009 By Liam Lahey

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Sophos officials said the company has modeled its Global Partner Program on its successful North American channel initiative to further bolster sales and brand awareness worldwide. That initiative was implemented 10 years ago when U.K.-based Sophos set up shop in America and has become the benchmark/model after which the entire corporation will fashion its global channel plans.

The program offers a two-tier margin structure, enhanced vendor support, new deal registration, and margin protection initiatives. It was designed specifically to deliver business growth for dedicated partners, explained Chris Doggett, director of global channel programs for Sophos in Boston.

"The overarching theme here is the perennial favorite topic is channel conflict and margin erosion but in today's market it's really competitive out there. We're hearing from partners there are lots of lines of business that they have that are not expanding. Happily security is one of those areas where companies are still spending money and we're still seeing growth," he said. "We're in a strong market in a rough economy with a solution very few companies can offer.

"We're trying to differentiate ourselves in terms of predictable profitability for partners . . . We're hearing from them they feel like some of our principal competitors are turning their backs on the channel. Sophos is doing the opposite."

This means partners can expect higher growth rates and 'greater retained margins,' he said.

"We've put a lot of effort into building a margin protection program for our partners . . . we have a two-tier margin structure which essentially amounts to a simple concept: if you're one of our partners out there cultivating a new opportunity for a Sophos solution . . . we recognize that investment," he said. "We can say definitively with our margin structure that (being underbid) won't happen. The only way someone can outbid you is if they sell below their cost."

So whether the partner is at the Silver, Gold, or Platinum designation within the Sophos program, if a new deal has been registered with the security vendor and it is lost, Doggett said Sophos would still pay the partner for that deal if the customer chooses Sophos.

"We have a seven per cent guaranteed commission on any registered opportunity that closes even if it closes with another partner," he said. "That further bolsters that predictability of their profits."

Moreover, the co-selling program entails customized marketing campaigns, personalized online training and certification programs, streamlined sales processes via an automated online pricing, quoting, and ordering system from a revamped portal and more emphasis on education and technical support assistance.

"We completely redesigned our partner portal and the tools and resources available to partners including education and training," he continued. "They now also have an online system that delivers real-time data to them . . . all of this is visible to them in a dashboard and they're seeing everything out of our CRM system as it relates to them."

The company talked to its partners worldwide as well as conducting internal stakeholder interviews when developing the program to ensure it delivered the right incentives, protection, training and support.

"We went out to over 450 partners globally and surveyed them about our existing programs and some new aspects," he added. "We engaged with a leading third party firm specializing in channel programs, we interviewed about four dozen internal stakeholders in Sophos, and several dozens of partners as well."

Also noteworthy, in the past Sophos' partners had the ability to become certified but it wasn't a requirement. Now it is. As a result, Doggett said he expected of the 1,100 North American partners Sophos has currently, he figures about 650 of them are active and/or are closing deals on a regular basis. Thus, that number will likely shrink.

"When you introduce a new program like this -- and part of it is signing up to the new portal and confirming your partnership with us -- you will see some folks that don't renew their partnerships. I'd expect to see a reasonable number of that 1,100 would probably fall-off," he said. "As word gets out in the market though, there will be partners that approach Sophos with an interest in a partnership . . . we're getting a lot of organic growth in partnerships because customer hears about Sophos and they ask the partner about it."

Softchoice said it has experienced double-digit growth annually selling Sophos solutions and the Sophos channel continues to be extremely instrumental in helping its' sales team close business, said Luke Black, vendor marketing manager of security, Softchoice.

"Our team recognized Sophos for . . . outstanding growth and for supporting Softchoice's focus on improving efficiency and driving long-term cost savings on behalf of customers across North America," he stated. "The latest program enhancements will enable us to expedite processes, continue to drive sales and marketing initiatives and increase profitability."