Some resellers have always treated Computer Associates (CA) with a degree of caution. Since the network management software vendor first opened its range of box products to the channel two years ago, some dealers have complained bitterly at their treatment at the hands of CA's direct sales force.
The fact that CA is pushing its flagship Unicenter TNG product through the channel raises some timely issues about the vendor's commitment to it.
For any vendor hoping to run a smooth and clean channel in tandem with a direct sales operation, channel conflict is the one issue it has to get right. On the face of it, CA's figures seem encouraging.
Growth in CA's channel business is outstripping direct sales. Worldwide, 33 per cent of its licence revenue comes through the channel, and the company has a firm commitment to increase this to 50 per cent by the end of next year. In the UK, between 25 and 28 per cent of licence revenue is generated through the channel.
CA sees the error of its ways
Perhaps the greatest indication that CA is facing up to the reality of running a clean channel is its admission of its past mistakes. At a recent seminar held at F1 racetrack Silverstone, Soren Ravn, regional vice president of CA's European channel partner group, told delegates CA has had to rid itself of its image as a tough firm to deal with.
"In some ways we were scary. Three years ago the way we were treating clients wasn't good - we weren't offering value and we had a bad reputation," he said.
Ravn added that CA's aggressive acquisition strategy had enhanced its reputation as a ruthless organisation.
"People think we've been buying these companies and laying off products, but we've actually been developing and integrating them into CA's product set," he said.
Tales from sales
CA has also had some internal issues to face up to. Instructing a direct sales force that some potentially lucrative leads must be passed over to a partner, and then having a mechanism to incentivise them to do this, is not something that can be done overnight, Ravn said.
Tales abound of resellers that have worked hard to secure a lead, only to have it snatched away at the last minute by a direct salesperson offering a substantial discount to the customer. CA claims it has been working to resolve this issue, and said it has transferred a number of direct sales staff into a separate group dedicated to channel sales.
Finally, and perhaps most importantly, CA has re-engineered its channel accreditation programme. The three-tier VIP programme introduced at this year's CA World [PC Dealer, 28 July] and a copy of Cisco's successful Var programme, replaced Varsity, which by Ravn's own admission was a mess.
Emphasis on enterprise
According to Ravn, an important part of the VIP programme is to place a greater emphasis on growing margins for resellers across all sectors of CA's business, but particularly at the enterprise level, where a Unicenter TNG implementation offers some significant scope for value-added services for resellers.
To address this, Sphinx CST was appointed as CA's only UK distributor for TNG last March, focusing on enterprise-level strategic sales.
This is starting to bear fruit, as top-tier Enterprise Solution Providers (ESPs) from the VIP programme begin looking for clients. "It's a tough market and a very difficult sell, but if you can do it, the margins are very high," Ravn said.
This point is being emphasised by the fact that any reseller selling Unicenter has to have a dedicated CA salesperson.
The finer details of the VIP programme have yet to be resolved in the UK, but Ravn claimed CA has put every Varsity partner into one of VIP's three levels. CA is now discussing terms and conditions with each reseller.
"We don't want all our partners selling TNG, but it's important that we find the right level for each one. In revenue terms, business partners selling Advanced Edition and Workgroup Edition boxed products are as important to us as enterprise partners," Ravn added.
For its part, Sphinx has recruited five sales staff to work exclusively on CA accounts, which will be increased to 10 by the end of the year, according to Lee Clarke, CA business unit manager at Sphinx.
"CA has a huge product set, so we'll be concentrating on complementing what the partner is doing already. A big part of our demand drive will be raising software compliance issues with directors, as they can be personally liable for illegal software," said Clarke.
In a further scheme, CA will send its consultants to a potential customer and prepare a proposal, which will then be passed to a partner if the lead comes to fruition. This channel-only service will be available free of charge to ESPs.
Other goodies include a 'seminar in a box' from Sphinx, a provisional commitment from CA that it will help resellers run weekly seminars throughout 2000, and the offer of other marketing and PR materials.
But for resellers, the ultimate goal remains the achievement of ESP status. Dave Anderson, sales director at Croft Computers, the first Var in the UK to sell Unicenter, said: "You have to expect a long road, and it has to be in partnership with CA or it won't work. In addition, you need to know that CA has its good bits and its bad bits."
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