Todays Partnerships Focus on Give, Not Take

As companies compete for the SMB market, keeping channel partners happy becomes a necessity.

With 20-plus years of reselling enterprise software under his belt, Allen Beck knows a thing or two about the ups and downs of channel relationships.

According to Beck, all too often vendor partners will lend some marketing muscle, pass on a few sales leads and maybe even sponsor training, but once the honeymoon ends, the relationship ends up being one-sided.

Beck, president of Beck Consulting Group Inc., a 10-person reseller of enterprise software in Alameda, Calif., has seen this scenario play out in several of his vendor relationships. Things really start to sour, he said, when vendors attempt to call the shots on how products should be marketed and deployed without regard to how the other half conducts business.

"It doesnt indicate any interest in how we do business or what we need from a partnership," Beck said. "When everything is told to you, thats not my definition of a partnership."

Fortunately for Beck and countless other VARs, the definition of channel partnerships is undergoing a dramatic change.

/zimages/3/28571.gifClick here to read about HPs new commitment to its channel.

Many hardware and software vendors are actively looking beyond the enterprise to carve out a presence in the SMB (small and midsize business) market. Many are revamping their channel programs, and they are keeping an eye toward providing partners with more of what the partner needs.

Instead of dictating how VARs should sell their products, for example, many vendors are now soliciting input from them on everything from sales methods to future product road maps. In place of poaching the biggest orders, the growing trend is to cultivate lead-generation systems to pass on prospects, or even go so far as to match up multiple partners to win business.

Rather than emphasizing the sales of the vendors packaged hardware or off-the-shelf applications, partners are now encouraged—even rewarded—to market their own value-added services and vertical solutions.

IBM, SAP AG, EMC Corp. and Computer Associates International Inc., among others, are some of the heavyweights getting serious about courting SMB channel partners. But these vendors are not re-evaluating their partner relationships and making changes out of the goodness of their hearts, analysts and channel watchers say.

Rather, they are doing so out of necessity, taking the approach that to best meet the needs of the highly diverse SMB space, its incumbent to have a regionalized and highly specialized channel partner, complete with micro-vertical expertise in dozens of niche areas.

"Were now seeing all kinds of programs come out in full force because [vendors] are getting serious about going after midmarket customers," said Laurie McCabe, vice president for SMB solutions for AMI-Partners Inc., a market research company in New York. "In the past, partnerships have been more one-sided—toward the vendor. Were now seeing a lot more skin in the game from the vendors because theyre more invested in getting at this market."

Next Page: EMC Dantz builds in SMB space.