Stand By Me: The 2015 Partner Program Guide

Any solution provider will tell you that the IT industry isn't just in a state of transition today -- that's a given -- but in a state of accelerated transition. Cloud computing, mobility, big data, subscription-based pricing, the services-led channel model, and other technologies and trends are remaking the IT industry.

Talk to solution provider executives about IT vendors and their channel programs and a common theme develops: the need for IT companies to work with their channel partners to help them navigate these seismic changes.

"The landscape is changing faster than it ever has," said Mark Wyllie, CEO of Flagship Solutions Group, a Boca Raton, Fla.-based solution provider. Case in point: Flagship is a longtime IBM partner and was a reseller of that company's x86-based servers. But with the business sold to Lenovo last year, Wyllieis now awaiting upcoming meetings with Lenovo executives to hear about their channel plans.

[Related: 2015 Partner Programs Guide Database]

"Everybody is in transition," said Ric Opal, vice president with Peters & Associates, an Oakbrook Terrace, Ill.-based solution provider that partners with Microsoft, Cisco Systems, Hewlett-Packard and other companies. "I need to know where I stand as a partner with my vendors."

To borrow a concept from Facebook, what's the status of your relationship with your IT vendors? One way to check is to take a look at the CRN 2015 Partner Program Guide, a listing of IT manufacturers, software publishers and service companies. The Partner Program Guide offers solution providers the information they need to evaluate IT vendors they already work with or are considering partnering with. The guide is based on detailed applications vendors submitted outlining all aspects of their partner programs. All applicants are listed on the following pages, along with a sampling of the market segment specializations they selected on their applications.

The Channel Company's research team analyzed the numbers and designated some programs as 5-Star Partner Programs. That rating recognizes an elite subset of Partner Program Guide applicants that offer solution providers key partnering elements in their channel programs.

To determine the 5-Star recipients, the research team assessed each vendor's application based on investments in program offerings, partner profitability, partner training, education and support, marketing programs and resources, sales support and communication. The 5-Star rating is given to programs whose overall rating is exemplary, segmented by company size: large, midsize, small and emerging companies (founded in 2009 or later).

The Partner Program Guide also offers a wealth of data that provides a snapshot of the current state of the IT channel. For example, 20 percent of vendors rely on the channel for 50 percent or less of their total revenue, down slightly from 23 percent the past two years. The percentage of vendors that rely on the channel for 90 percent to 100 percent of their sales was 33 percent, down from 36 percent last year and 34 percent in 2013.

Nearly all vendors provide the channel program basics: 99 percent offer pre-sales support, 97 percent provide technical support and 96 percent furnish post-sales support.

Only 58 percent have partner programs that compensate partners for deals that are partner-registered, but closed by direct sales. (Eighteen percent don't have that policy and 24 percent say the question is not applicable.) Thirty-eight percent of vendors say they generate sales leads and share them with all partners, while 17 percent do so only with top-tier partners, and 25 percent do so with top- and second-tier partners.
These nuts-and-bolts program components are certainly important to channel partners. Take Sigmanet, an Ontario, Calif.-based solution provider that works with Cisco, EMC and Dell, among others. The company is expanding into new areas such as big data, collaboration and cloud computing and that requires investments in people and training.

Stephen Monteros, Sigmanet sales operations vice president, said channel program offerings such as rebates and market development funds are critical for helping the company expand into new areas. "If they don't have those rebates in place, we can't continue down that path," he said. "It underwrites the places where we want to be. These are the drivers that are going to help us evolve."

Opal, at Peters & Associates, puts a premium on how open his IT vendors are about things like product development road maps and channel program changes. "I need to know where I stand as a partner with my vendors," he said. "The relationship is key. It's not the transaction." That honesty is critical, Opal said, "because I need to be honest with my customers."

Opal gives Microsoft good grades in this area. Not surprising, perhaps, given that improving partner communications around product development plans was one of the areas Microsoft has concentrated on improving in the past year, according to Gavriella Schuster, general manager of Microsoft's worldwide partner group, in an interview.

Schuster acknowledged that starting a few years ago Microsoft "got tighter with our disclosure policies" and wasn't as forthcoming with partners about product road maps. That's been changing in the last 12 to 18 months, she said, with the company disclosing more about "what we are investing in from a technology perspective [and the company's] innovation road map."

The Partner Program Guide statistics also show how prevalent cloud computing has become. Asked to identify their market segment specializations, 55 percent of IT vendors said they sell cloud applications and software -- the single largest technology category. Thirty-nine percent cite cloud security, 38 percent cloud infrastructure, 36 percent cloud security and 36 percent cloud storage (multiple answers were allowed).
Seventy percent of IT vendors applying for the Partner Program Guide said their products are used to enable off-premise cloud systems. In a sign of how cloud computing is changing the channel, 59 percent said their products are sold as a cloud service where the vendor is the service provider.

"It's a given that cloud is the new reality," said Craig West, channel sales vice president at cloud application provider NetSuite.

In the earlier years of cloud computing, NetSuite focused on providing its channel partners with pre-sales technical capabilities as part of its effort to help solution providers counter the fear, uncertainty and doubt sown by competitors, West said in an interview. With cloud computing now much further along the adoption curve, NetSuite today is putting more emphasis on helping partners develop deeper professional services and solutions consulting skills -- critical for holding onto customers in a subscription/service world.

Meanwhile, last fall Microsoft introduced new Azure and Office 365 cloud competency certifications for partners and for its Dynamics CRM Online in February. The company is also piloting a new Cloud Solution Provider program through which ISV and MSP partners can add their own intellectual property to Microsoft cloud services, Schuster said.

Several solution provider executives noted the increasing need to add their own intellectual property to vendor-supplied technology to differentiate themselves in the marketplace. "That is something a vendor can help us do," Wyllie said. As an example, he pointed to Flagship Solution Group's "Smarter Stadium Solution" management system the company developed with IBM based on that vendor's Intelligent Operations Center.

Microsoft in the past year has also offered partners what Schuster called "guidance on how to rethink your organization" as solution providers transition to a services-based business. The company, for example, now offers "profitability workshops" for partners moving to a recurring revenue model.

While the nascent Internet of Things market is in its early stages, Cisco in the past year has launched IoT specializations for its channel partners, said Steve Benvenuto, senior director of business development in Cisco's worldwide partner programs. Those include specializations in IoT in manufacturing and in safety/security verticals. The company has even written an "IoT Playbook" that provides go-to-market advice for partners, Benvenuto said.

Opal also said he's increasingly looking to his vendor partners for guidance as buying authority within client businesses shifts from IT to other line-of-business executives such as finance and marketing executives. "The more I know," Opal said, "the faster I can change."

PUBLISHED APRIL 13, 2015