Designing a Successful Channel Strategy for Enterprise Software SIIA Webinar Series July 20, 2006

Paul Rickett – VARKETING! [email_address] Owned and operated a VAR Written and published software 7 years in national distribution 7 years consulting on channel strategy Including major US and Canadian companies in hardware and both packaged and enterprise software 7 years working with international and domestic value added partners Mission-critical enterprise business application © . VARKETING!, 2006

Owned and operated a VAR

Written and published software

7 years in national distribution

7 years consulting on channel strategy

Including major US and Canadian companies in hardware and both packaged and enterprise software

7 years working with international and domestic value added partners

Mission-critical enterprise business application

Value Added Channels Most adaptable species of the IT ecosphere They’ve thrived adapting to new technology and business models – they’ll adapt to the next wave too A huge proportion have been in business longer than 90% of vendors Incredibly loyal Its time we found some better generic labels

Most adaptable species of the IT ecosphere

They’ve thrived adapting to new technology and business models – they’ll adapt to the next wave too

A huge proportion have been in business longer than 90% of vendors

Incredibly loyal

Its time we found some better generic labels

21 st Century Partnering New technologies and new business models create partners and relationships New technologies bring evangelists New pricing/delivery models Open doors to partnering with companies that are not even considered VARs by classic definitions Force existing channel to adapt and absorb Internet continues to be the fundamental agent of change Shifts in roles and responsibilities Increases commoditization throughout the spectrum © . VARKETING!, 2006

New technologies and new business models create partners and relationships

New technologies bring evangelists

New pricing/delivery models

Open doors to partnering with companies that are not even considered VARs by classic definitions

Force existing channel to adapt and absorb

Internet continues to be the fundamental agent of change

Shifts in roles and responsibilities

Increases commoditization throughout the spectrum

The Success Troika Channel Success Understanding the VAR Perspective Vendor Commitment Vendor Execution Cross-enterprise engagement Great product and support Clear positioning and demonstrated market need Patience Listen, Adopt, Adapt Respect EODB Consistency Fit to Business Vendor Risk ROI

Cross-enterprise engagement

Great product and support

Clear positioning and demonstrated market need

Patience

Listen, Adopt, Adapt

Respect

EODB

Consistency

Fit to Business

Vendor Risk

ROI

Put Yourself in Their Shoes What’s the fit? What does this do for me and my market? Show me the money What’s the ROI on the investment you want me to make? How are you going to help me achieve this? How are you going to mitigate risk? If I commit to you – what commitments are you making to me – and do I think you’ll keep them? Is investing in this relationship an acceptable risk to my business and customers?

What’s the fit?

What does this do for me and my market?

Show me the money

What’s the ROI on the investment you want me to make?

How are you going to help me achieve this?

How are you going to mitigate risk?

If I commit to you – what commitments are you making to me – and do I think you’ll keep them?

Is investing in this relationship an acceptable risk to my business and customers?

Value Prop. Must Support Your Objectives Credibility New kid on the block syndrome – VARs are key influencers Broadening your current market accessibility More customers in same segment that you sell to now – putting more feet on the street Tackling new market segments Up/down market from your current positioning Reduction in your costs of doing business You may want to do it all, but each impacts what type of partner you need and the value proposition you need to create © . VARKETING!, 2006

Credibility

New kid on the block syndrome – VARs are key influencers

Broadening your current market accessibility

More customers in same segment that you sell to now – putting more feet on the street

Tackling new market segments

Up/down market from your current positioning

Reduction in your costs of doing business

A Few Simple Rules Match channel(s) to market strategy Partner segmentation, fit and corporate Keep programs simple and flexible Partner segments have different needs and demands Set and review key performance indicators Make the channel a corporate commitment It impacts every aspect of your business, not just sales and marketing Listen, adopt, adapt Channel is a continuum not an event Loyalty is earned over time – repeat business is how you make a profit © . VARKETING!, 2006

Match channel(s) to market strategy

Partner segmentation, fit and corporate

Keep programs simple and flexible

Partner segments have different needs and demands

Set and review key performance indicators

Make the channel a corporate commitment

It impacts every aspect of your business, not just sales and marketing

Listen, adopt, adapt

Channel is a continuum not an event

Loyalty is earned over time – repeat business is how you make a profit