Smooth Sailing

Launching a channel partner programme is the easy part. Making it a success requires commitment, dedication and a fair amount of managment skill and vision as well.

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By  Stuart Wilson Published  April 2, 2006

Driving behaviour|~|pphaz200.jpg|~|Hazem Bazan, SPO manager at HP Middle East|~|The introduction of structured second tier partner programmes in the Middle East has accelerated rapidly during the last year. More and more vendors are realising that the regional channel has now reached a level of maturity where resellers are more than capable of participating in sophisticated partner programmes. For the vendors themselves, rolling out an international programme is the easy part. Making sure it fits the needs of Middle East resellers and drives partner development in the right direction are the real ongoing challenges. The purpose of second tier partner programmes boils down to a few simple goals that all vendors have in common. Top of the list has to be sales growth. It is not something that vendors will necessarily emphasise, but partner programmes maintain a critical role in driving the development of channel partners in a way that allows the acceleration of revenues. The programme is a tool that vendors use to influence the behaviour of partners. Strong programmes can open up new business areas, reinforce partner profitability, ensure customer satisfaction and encourage channel breadth. Hazem Bazan, SPO manager at HP Middle East, explained: “Any programme that you operate is supposed to drive behaviour of partners and focus them on specific areas of opportunity. For HP it is all about encouraging partners to specialise and excel in their chosen area. Simultaneously, building revenue growth is also an important factor that must be taken into consideration when designing and implementing a partner programme.” For vendors in the Middle East that have not yet taken the plunge and rolled out a fully functioning partner programme across the region, valuable lessons can be learnt from the experience of others. Since joining networking vendor US Robotics as regional manager from his position at distributor Aptec, Sumit Kumar has put channel development at the top of his to do list since and the results achieved so far speak for themselves. ||**||Channel mapping|~|ppskumar200.jpg|~|Sumit Kumar, regional manager at US Robotics|~|“When I joined there were issues in terms of sales volumes, channel reach and brand awareness,” explained Kumar. “The resellers did not have fantastic confidence in terms of where US Robotics was heading in the region and they also had questions regarding their potential profitability. They were not making strategic sales and that is what I really wanted.” “We introduced a partner programme that gave the resellers confidence about their profitability potential. This involved differentiating the partners, putting them into different categories and making it clear where they played in the market. Everybody was soon clear about how and where they could make margin and this created a positive channel environment for everyone to work in.” Partner mapping and specialisation have become watchwords for the channel managers plying their trade in the Middle East. The chaotic regional approaches of yesteryear have been consigned to history in the region and vendors have been applying much of the business logic they preach to resellers within their own channel business models. While driving partners to deliver value and not just volume, vendors have also made a move to focus on the quality partners within their programme and not become preoccupied with the quantity of partners that they have signed up. To some it is a leap of faith but there is a growing realisation that if partners deliver quality solutions and services to customers the quantity will follow. To ensure quality, many vendors, including networking vendor 3Com, have moved to programmes that reward partners for their commitment and expertise. Frequently referred to by channel executives as a ‘win-win’ situation by vendors, the premise is simple: the more you commit to us the more you will get back in return. 3Com’s recently enhanced Focus Partner Programme. “The key to successful channel sales is in building a programme that meets the needs of a wide variety of partner business models,” explained Ken Presti, research director of network channels at IDC. “These new enhancements to 3Com’s Focus Partner Programme help partners to align with 3Com based on expertise and commitment, which can help to identify the appropriate partner to meet the customer’s business needs.” As vendors make the move towards models where rewards, rebates and incentives are intrinsically linked to partner skills, certifications and the quality of solutions delivered, the requirement for sophisticated channel mapping and monitoring grows. This is particularly true for a tiered channel partner where assessing the status that each partner should receive can be a complex affair. “Before US Robotics introduced its tiered partner programme, I met with the partners in all categories to get their views on what they needed from us,” added Kumar. “We have platinum, gold and silver partner categories and the resellers understand exactly how this works.” ||**||Programme pipeline|~|pp3Com200.jpg|~|3Com's channel team have introduced an improved partner programme in the region|~|As always, it is the quality of partners that takes priority over the sheer quantity for US Robotics. “We have around 50 consistent partners in the region,” continued Kumar. “We are not aiming to get as many as possible. What we want are partners that are committed and consistent so that we can ensure profitability. There is no point having 500 partners that are selling the same products and simply killing each other’s margins. It is the wrong path to take.” With more and more structured partner programmes scheduled for introduction in the Middle East, resellers face a bewildering choice. Working out the scheme that fits best with their business model and target customer base has already become a valuable skill in the Middle East market. Pick the right programme and a partner can snare valuable assistance from the vendor in areas such as lead generation and training while also seeing long-term benefits to the bottom line. Pick the wrong programme and a partner can end up fighting tooth and nail with hundreds of competitors to shift some kit even though the terms of the deal realise zero margin. “A vendor’s partner programme has become one of the key measures of success in the channel,” said Alastair Edwards, senior analyst at research house Canalys. “Partner programmes have evolved from being a badge above the reseller’s door to determining the profitability of partners, their ability to skill up in new technologies, to generate pipeline and to grow with the vendor. Increasingly, partner programmes are becoming a form of differentiation between vendors who are competing for the time and resource of the partner base. Vendors are continuing to throw more money and investment into their partner programmes to attract the right calibre of partners, and to help resellers improve their ability to deliver complex solutions.” Nowhere is this truer than in the Middle East region. Given the high annual growth rates and the lack of channel landscape visibility in many of the individual national markets, partner programmes offer vendors with a method of building channel breadth and commitment at an early stage, thus raising the barriers of entry to potential rivals. “Emerging high growth markets like MEA will also see proportionally more money spent on them as vendors seek to recruit and retain new partners in these regions,” added Edwards. “At the same time, as vendors demand more investment and ‘loyalty’ from partners, resellers will be forced to focus their time and resources on a smaller group of suppliers. The challenge for resellers is to make sure they are choosing the right vendors to specialise with — are they offering profitable returns in terms of compensation, is partner loyalty really being rewarded, will they survive further vendor consolidation?” More vendors are looking to introduce partner programmes in the coming months. Lenovo, which inherited a solid channel after its acquisition of IBM’s PC division, is now gearing up to launch its own dedicated programme that will take its partner engagement to the next level. “We have been using the PartnerWorld programme since the acquisition, but now we will look to introduce a programme under the Lenovo brand in the next month or two,” said Mohamed Sharaf, marketing manager Middle East, Egypt and Pakistan at Lenovo. “It has taken some time to fully take off the IBM shoes but now we are ready to introduce a programme that will reflect the increased breadth of Lenovo’s product range and our ability to tap into new market sectors.” ||**||Choosing wisely|~|pplenovo200.jpg|~|Mohamed Sharaf, marketing manager Middle East, Egypt and Pakistan at Lenovo|~|For vendors such as HP, which boasts a massive product portfolio, straddling the IT world, developing a programme that meets the needs of all its resellers is a challenge. The preferred partner programme, which HP has now rolled out in the region, has addressed this issue and its rollout has been a huge success in the Middle East channel according to Bazan. “The preferred partner programme has now launched and the channel has been very enthusiastic about it,” he said. “There has been a great deal of work involved from our side and the partner side. We are now at the highest channel certification level we have been at for three years. This shows the partner commitment is there because they have had to invest to reach these standards. The SPO team is now working much more closely with the final tier as consultants and we are also actively working with them to encourage specialisations.” HP’s ‘T-shaped’ reseller concept has now become a common term within the regional channel. Put simply, the ‘T-shaped’ reseller is one with the capability of selling across the broad portfolio but also possessing deep expertise in one particular area of specialisation. It is a concept that many other vendors are trying to emulate as they look to strike the perfect balance between maximising sales out, ensuring that the customer experience is exemplary and that partners make a reasonable margin. While there is a great deal of theory behind partner programmes, it is vital that vendors and resellers never lose sight of the fundamentals underpinning their business model. Resellers need to make a margin: without it, they will not participate in a vendor programme, regardless of the training and leads on offer. For vendors that lose sight of this universal truth, there is no channel buy-in. Vendors would also be well advised to ensure that their channel teams have a degree of channel experience under their belt. Kumar believes that his seven years in regional distribution have given him a solid understanding of the needs of the channel. Partner programmes are here to stay and resellers need to pick their vendors wisely.||**||

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