Partners don’t like to see vendors sweep up services income and leave them to fight over dwindling hardware margins.
Which is why EMC Corp. has overhauled its Velocity partner program to give the channel a greater opportunity to take an increasing share of services revenue.
The storage manufacturer says it has listened to partner complains and is allowing its Authorized Services Network (ASN) members the ability to sell services that would normally have been delivered by EMC’s consultants.
“As they propose and find business they will have first right of refusal to take all services necessary to deliver that solution,” said Pete Koliopoulos, the company’s global vice-president of channel marketing.
“They can go in and assess, design, and implement all services necessary.”
In addition, EMC is changing the training and lowering costs to make it easier for partners to become authorized ASN members.
For example, the sales engineering accreditation course needed for ASN status is now free.
The changes are enough to make EMC partner Commerx Computer Systems of Mississauga, Ont., seriously considering becoming an ASN member, said Tim Langevin, the company‘s vice-president of sales and marketing.
”The real barrier was the cost,” he said. “It was price-prohibitive for a lot of partners to get into that realm. That said, we still had to carry a lot of the same certifications to sell the product as we would with ASN. With them reducing some of the cost structure, I think that’s going to bode well for channel partners who want to get into it.”
”Originally we looked at it and I think there was going to be a $50,000 investment, not only monetary, but time as well. Now for a sub-section I think you can probably do it for around $10,000-$15,000, which is more paletable.”
Also being changed is the heart of Velocity’s program structure, which determines which level partners fit it. Instead of being points-based, it is now revenue-based, largely as a reaction to partners who said it was too hard to track points.
As an extra lure, ASN partners get bigger co-op marketing and rebate benefits than before.
To enhance software sales – which sell for much less than most EMC hardware and therefore could be a drag on partners who specialize in it – each dollar of software revenue will be multiplied by five times.
Koliopoulos estimates that as much as 30 per cent of a storage solution could be services.
EMC says more than 50 per cent of its revenue is touched by the channel – in fact channel revenue is growing faster than its own revenue. However, Koliopoulos said the company isn’t worried that this change will affect its bottom line.
“We believe increasing partner profitability will more than make up our share of that (lost revenue),” he said. “By enabling the partner ecosystem to work more cleanly we end up getting some more share of their business, we hope, and mind share so they can deliver profitably our solutions.”
In an attempt to help partners in another way, EMC has also consolidated the number of channel reps partners have to deal with, a legacy of the company’s recent acquisitions. Most partners will have only one manager to deal with on the Velocity program, except for those who were part of the VMWare and RSA programs.
Looking ahead, EMC will be deploying local marketing and technical consults to advise partners on marketing upgrading their technical skills. Koliopoulos had no information on how many people this will involve and when it will start in Canada.