Vendors Aim to Play Well With Channel Partners

As they aggressively go after SMB market, many offer VAR partners more flexibility.

Theres nothing like the comfort of a steady, one-on-one relationship between a company and its VAR. But given the diversity of problems in the small- and midsize-business space, many companies are quickly learning that it sometimes takes multiple partners to get the job done.

"A lot of big vendors have cracked the code on how to put together a strong partner program that takes them to SMBs, but what none have done in any significant way is find a way to partner the partners," said Laurie McCabe, vice president for SMB solutions at AMI-Partners Inc., a market research company in New York. "Thats really the holy grail because, even for a medium business, it may take two or three different entities to pull a solution together."

Many vendors are apparently beginning to recognize that need. As part of their SMB channel overhauls, companies such as SAP AG and IBM are instituting new partner-to-partner referral programs and community-building resources. Both efforts are designed to foster a collaborative ecosystem of business partners serving smaller customers.

IBM, for example, has a teaming program as part of its SMB partner initiative that will pair VARs with complementary skill sets.

As part of its program, SAP offers the PartnerEdge Channel Partner Solution Network, an online collaboration tool that catalogs industry-specific solutions and add-ons from SAPs partner network, making them available to interested partners on a global basis.

/zimages/4/28571.gifClick here to read more about SAPs PartnerEdge Reward Program.

"There are partner-to-partner relationships today, but its pretty unstructured," said Michael Sotnik, SAPs senior vice president of channel, SMB, in North America. "This investment puts structure to it and provides a scalable way for everyone to interact."

Et Alia LLC, an SAP partner marketing a micro-vertical solution for the construction and project-based assembly and fabrication industries, has already benefited from the PartnerEdge Channel network, gaining introductions to partners in Australia and Canada that are now reselling its Crew application in those regions. To foster that kind of global reach and distribution on its own would have been tough, if not impossible, according to Brad Nicolaisen, president of the Milwaukee-based company.

"This is great for us—it took years to develop our Crew solution, and my objective as a business owner is to increase revenue," said Nicolaisen. "This gives me the ability to scale worldwide using existing SAP partners instead of having to create my own global network."

SAP, of Newtown Square, Pa., has also instituted an intrachannel referral model to provide lead sharing between its All-in-One partners (its solution aimed at the higher end of the SMB space) and its Business One team (a lower-end package aimed at businesses with 10 to 100 employees).

If the leads turn into a win, the referring partner gets paid a fee based on the net proceeds of that win. The amount is funded in part by SAP and the receiving partner. Since the program launched in July, 40 percent of SAPs partners have reportedly signed up to participate.

The changes in these channel relationships are a direct reflection of the needs of the SMB customer base. Said SAPs Sotnik, "The collaboration-versus-competition shift taking place is a result of the higher level of sophistication the SMB customer has and their more complex requirements for specialization."

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