Psst, Heres a Tip

By John Moore  |  Posted 2001-02-12 Print this article Print

Arrogance doesn't pay; lead referrals emerge as a new form of currency.

Its humble-pie time in the Web integrator market, and many players have a face full of it. Instead of other service providers banging on integrators doors and getting a cold shoulder, now the Web integrators are doing the knocking. And theyve come bearing gifts. A number of service providers interviewed say that in the past several months, the once-arrogant attitude of Web integrators has changed for the better.

Instead of reluctant partnerships, Web integrators are now offering and taking leads.

Qwest Communications, for example, is exchanging leads with MarchFirst, Scient and Viant. "They tell us about bandwidth opportunities, we let them know about services opportunities," says Craig Schlagbaum, director of partner programs at Qwest. He says lead referrals are becoming commonplace with a number of other integrators, as well.

While vendors long have provided leads to resellers and integrators, this is a radical shift in the relationships between service providers. Rather than try to grab any new market opportunity themselves, service providers are focusing on core competencies and using partners to provide complementary services.

Moreover, this development appears to be picking up steam.

Exodus Communications last year launched an extranet for channeling leads to and from the companys network of 1,700 partners. Last year, the company handled 10,000 leads through that extranet. Most were from Exodus to its partners, says Arif Razvi, director of worldwide alliance programs at Exodus.

The situation is much the same at Virtualis Systems, a hosting company purchased last year by Allegiance Telecom. Virtualis drives a big chunk of sales through partners, which the company refers to as affiliates. The company has about 50,000 affiliates, many of which are Web design shops that refer customers to Virtualis for hosting services. In return, Virtualis offers commissions as high as 30 percent.

Affiliates, says Virtualis COO James Segil, are "pulling in a significant amount of top-line revenue." Tucia Lyman, director of Virtualis affiliate program, notes that many affiliates are small businesses that develop Web sites for Main Street businesses. Those design shops may do 30 to 40 sites per year, but those numbers add up when dealing with an affiliate base in the thousands.

Web integrators are now finding that being good partners does pay off.

John writes the Contract Watch column and his own column for the Channel Insider.

John has covered the information-technology industry for 15 years, focusing on government issues, systems integrators, resellers and channel activities. Prior to working with Channel Insider, he was an editor at Smart Partner, and a department editor at Federal Computer Week, a newspaper covering federal information technology. At Federal Computer Week, John covered federal contractors and compiled the publication's annual ranking of the market's top 25 integrators. John also was a senior editor in the Washington, D.C., bureau of Computer Systems News.


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