Sweet Jam Turns Sour

ASP kills its pioneer partner program.

Jamcracker, a two-year-old application service provider, is facing its own logjam in building its partner program.

Facing market pressures, the company, which offers hosted applications and business services, has laid off 18 employees and has dropped its Pioneer Program, one of the pillars of its move last July to use resellers to boost sales.

Meanwhile, Jamcracker is retaining its Explorer Program, in which solutions providers receive commissions for sales leads that eventually sign up for Jamcracker services.

The privately held company, which has raised more than $150 million in funding, was founded by Exodus Communications chairman K.B. Chandrasekhar.

Jamcracker recently signed 42 customers and has an additional 41 in various stages of deployment. The company also is continuing to look for large-scale OEM-type reselling partnerships. It has signed only one of those deals, which has yet to be publicly announced.

In retrospect, given the young firms place in a fledgling market, Jamcracker VP of worldwide marketing Todd Johnson says the Pioneer Program just "didnt make a lot of sense."

Under the program, resellers could be either Sales Certified Pioneers, which sold Jamcracker to their existing customers, or Premier Certified Pioneers, which handled not only sales, but also the implementations.

When the program was announced last year, Jamcracker hailed it as a way for e-business consultancies, systems and solutions integrators, and telecom companies to enter the ASP marketplace.

But the Pioneer Program got clogged along the way. Johnson notes the programs objective was for the partners to be pretty much independent when they resold Jamcrackers various services. However, training resellers was time-consuming and expensive. About 15 resellers took part in the Pioneer Program.

"Our product was still in the market creation mode, and it wasnt a great fit for the reseller model because there was so much education on the part of the customer required to get a deal done," Johnson says. "We found, in these resale deals, it took a significant amount of our direct sales forces energy."

And, he adds, "I think we underestimated in the beginning the amount of demand there would be for OEM-type implementations of Jamcracker."

Johnson acknowledges that ASPs increasingly are looking to solutions provider partners to augment their direct sales teams. Still, he says comparing ASPs to Jamcracker is an "apples and oranges" thing, because he contends Jamcracker is the channel for many ASPs.

"I think more and more of what ASPs are looking for are indirect channels that can add significant value around their point solution, and thats what we are for a bunch of ASPs."

The Pioneer Programs demise does not, however, mean Jamcracker will abandon its other partnering efforts.

Key allies include Accenture, AppShop, BEA Systems, Icarian, Loudcloud and Talisma, among others.