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By | Timothy Prickett Morgan 9th February 2009 21:16

Tough times mean channel love for Novell

Investments and profits promised

A lot of IT vendors make their numbers or don't because of the efforts of their indirect sales channels. And when times are tough, the vendor has to take some of the economic heat off their channel partners so they don't lose the people who actually interface with customers.

To that end, Novell has announced that it is rejiggering its channel partner program. The changes Novell has made, which were only discussed vaguely, suggest that - maybe - Novell has taken its channel for granted of late.

Novell said it planned to boost its year-over-year investments in the channel by a factor of five, boosting the size of its channel organization that supports partners by a factor of four, and adding new executives to manage the whole shebang.

The channel investments include, among other things, giving partners more margins on Novell products. All the free training and goodies in the world a company like Novell can throw at the channel do not mean half as much as cashish does right now.

To that end, Novellhas restructured its discount and volume incentive rebates for partners and, perhaps more significantly in a harsh economic environment, has created a partner deal registration system that keeps partners from chasing the same accounts to win business - and to win business by sacrificing margins. The one thing Novell - and indeed any IT vendor - doesn't want is for its own partners to drive its top and bottom line down by competing too aggressively.

Several years ago, when the midrange server business was a little tight, IBM instituted a similar program for its Unix and proprietary machinery, which it called revenue qualification. This, as you might imagine, annoyed some channel partners quite a bit, because they were willing to try to make it up in volume by raiding other accounts.

Basically, with such programs, you get to call dibs and other partners have to back off. In exchange for orderly sales in the channel, vendors like Novell and IBM can afford to give partners some more margin, because if they don't, the revenues will go south based on competitive pressures anyway. It is somewhat dubious to call this increasing an investment in the channel, however. But this is what IT vendors do.

As part of the channel reorganization at Novell, the company is also providing more computerized sales and technical training to make it easier for partners to get certified to peddle more Novell products. The company is also giving partners access to deployment training, best practices and methodologies, and Novell's own services staff to help the partners train their own staff to chase services deals. To make it easier to sell Novell products, the company now has fewer product numbers, a single price list for channel partners, and standardized volume discounting schemes that partners are expected to hew to.

The channel changes follow the promotion of Javier Colado a month ago to the position of president of Novell's EMEA operation. Colado was in charge of Novell's European channel, and was working on the channel reorganization. Now that this is done, John Dragoon, Novell's chief marketing officer, is taking over the job of managing channel partner relationships.

"We have shifted our company strategy to a partner-centric model to meet our aggressive growth targets,” explained Colado in a statement. "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."

Novell also said it has appointed three new executives to its channel organization. Steve Hale, who worked in Microsoft's channel organization for 17 years, is now leading Novell's global data center channel program, which helps partners chase big accounts for broad adoption of Novell's products.

Mark Taylor, who comes to Novell after running channel sales at Macromedia and LANDesk (and who has 20 years of experience in the field), has been hired to take over Novell's global end user computing channel efforts, which is trying to peddle Linux on desktops and laptops and virtualized hosted PCs, among other things. Dan Veitkus, who was vice president of global field operations for Novell, has taken over Colado's prior role as vice president of partners for EMEA. ®

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