BT chops down Open Orchard

BT-backed reseller Open Orchard has been folded back into its parent division, BT Retail, after it failed to serve the hosted application market any better than its existing mainstream channels.

When Open Orchard was launched last November it was backed by an initial £6m marketing budget. Aimed at small and medium-sized business (SMB), the decision was unpopular among resellers, as it meant BT was competing with its own channel.

The news leaves partner SMB application provider NetSuite needing to recruit a new country manager and direct sales staff just weeks before launching in the UK.

Formerly known as NetLedger, NetSuite had planned to launch with Open Orchard last week.

"We began to get inklings that things were not okay around the last week in August," said Zach Nelson, chief executive of NetSuite. "We were due to launch our offerings through them last week, but we are now doing that independently."

Open Orchard's contract with NetSuite provided prospect identification and product localisation skills prior to the product launch.

As a result, Nelson sees the demise of the BT-backed reseller as a "net positive" for his company, providing it with knowledge and leads that it has successfully converted into sales.

Active policy management solution provider Orchestria, another Open Orchard partner, confirmed that it had found out "in the last seven working days" that the reseller was "defunct".

"We are working with BT to find the best way to support existing customers," added Paul Johns, Orchestria's global marketing vice president.

BT has refused to say how many accounts have been affected or how much money it has lost by folding Open Orchard.

But the news of Open Orchard's demise has been met with some satisfaction by resellers.

Gordon Davies, commercial director of BT reseller Compusys, said: "[Open Orchard] never won the channel's confidence and was poorly conceived, initiated and executed.

"I always thought it was doomed to failure and just hope BT learns lessons from this, instead of pretending it never happened."