Tell it like it is.

This Blog hits home. With the prevalence of email, getting noticed is a huge challenge. Offering value by providing great content is the way to get noticed and a winning headline is a must. Read her article, it is concise, informative and actionable. It will also help keep your emarketing from ending up in the spam filter.

http://achievement.im/8/how-to-write-headlines-7-tips-for-writing-effective-marketing-headlines/


- Posted using BlogPress from my iPhone

Got to see this Channel Guys

This is a wonderful video that insults and entertains everyone in the channel food chain.

Are VARs like Record Stores, Obsolete?

With all due respect to the great people at the 240,000 VARs in North America, what is the point of a VAR today?  Vendors are aggressively courting end users, i.e. Apple Stores, online stores.  Traditional direct marketing resellers (DMR) like CDW and Insight have always been "the boogie man" anyway to VARs and they are offering more value-add services while selling large volumes of goods at thin margins.

To quote my friends at VARBusiness:  a VAR or Solutions Provider is any third party company that deploys/integrates/resells and/or influences hardware/software/service to an end customer.  The most common value-add VARs traditionally provide is "Access and Advice".  When you think about it, the value proposition is pretty close to that of record stores, look what happened to them.  Do you even remember the name of a record store.  For the record I do....Tower Records.

10 years ago VARs kept inventory in order to be able to respond quickly to clients. It was a competitive advantage.   Presto! with the combination of FedEx, the internet and the huge economic buying power of the mega resellers it is no longer an advantage.  In fact tying up cash in inventory is a disadvantage.  And that was before SaaS eliminated inventory.  So access has gone by the wayside, what about advice?

Queue a discussion of social media....Much of the channel discussion that I have been involved in centers around communication between vendors and resellers.  It is about about becoming more interactive, relevant, and timely.  The goal being to better enable the channel to resell products and vendors to stay relevant to those resellers.  The same logic and technology can be used on end users with the same wondrous result.  However, another attribute of social media is a down side for VARs.

VARs filtered the "signal to noise" ratio for end customers by being knowledgeable about a set of products, i.e. reducing the noise.  These products are filtered, as they are preselected as a portfolio product by the VARs.  The good ones do it on the basis of product features, service, vendors stability, etc.  As VARs select the products before the end user uses the product, they are Pre-Filters.  The VAR can give advice about the 2 to 4 products that they carry in each product category.  The advice is valuable, in some cases invaluable.  But wait, there is a new source of information for buyers: fellow travelers. 

What is more compelling:  a power point from a sales person or a series of rhapsodic reviews from professionals in your position i.e. doctors, lawyers, coffee shop owners.  Unsure?  Well then try it for free for 30 days.  DIY (Do It Yourself)  in full bloom.  

There goes the "advice" portion of the VAR value proposition.  What happens when a company with a powerful market position, credibility, and aggressive prices like CDW or Insight offers user recommendations on their web site (which neither do today) or it is available on Amazon?  Is it game over for VARs?

The IT channel is at the cusp of a change.  My contention is that there is room for Value-Added Resellers but not for resellers masquerading as VARs.  In future posts I will develop the “whys and wherefores” a bit more.

Who Let the Dogs Out? Not Sure Anyone Did

On the train back from San Francisco and much of the week at the RSA Show (biggest IT security show). One of the topics that I investigated was the health of channel as measured by investment by suppliers. Well the answer is mixed, I sound like an economist in Time Magazine. For every company increasing their investment in the channel there was another taking the wait and see approach. uggh.

However on the positive side, there were a number of direct companies of the SMB variety who are starting to invest in the channel. This is reflected as upgrades at some, hiring at others. SMB's or start ups are typically the early part of trends, so may be also in this case.



The bad news from the show was the sparse attendance, no obvious signs of a recovery here. Thursday was nearly dead in much of the Expo hall. Back on the good side many of the vendors reported that the quality of attendees was high. Is that due to tight budgets and companies only attended if they are actively in the market for security?



The best booth entertainment was the fellow playing an instrument by disturbing a magnetic field, never touching anything. Not Bruce Springsteen but interesting. Worst entertainment, get your picture with a big guy in a diaper. Not sure the Sumo wrestler was the best idea.



- Posted from my iPhone

Channel and the Economy, Who is Winning?

As the great recession took hold, a number of firms reduced investment in the channel.  Many did not dump partners all together, rather they reduced budgets in channel "overhead".  Which translates to channel  focused employees and programs.  The prevalent notion was; "our relationship with the channel is fine, we don't need anything but direct quota types.  They can drive sales and in their spare time do channel stuff."

There was a resulting increase in complaints for resellers who could not get questions answered, quotes generated, MDF, or they never heard from vendors unless there was an active deal.  Pipelines suffered for many channel oriented firms, just the economy or did the reduced proactive effort by vendors contribute?

Major channel players followed this script, WebSense for one.  They keep giving the team a haircut until little was left to be proactive.  Recently WebSense has begun to hire a new team, is that a good sign in the economy?  WebSense is not the only company to go through this process, one company that shall remain nameless, decided to layoff their channel leader saying they hoped to share her expertise with other small companies within their investors portfolio.  The executive speaking to the press said they just did not need anyone full time.  Good Luck with that!

Has the approach changed?  Are there more channel employees at the vendors?  Are they more optimistic?  How does the spending level compare with 2 years ago?

I am headed to a major network security trade show this week, RSA, to get a sense of the mood toward the channel and the mood of the channel.  I will be blogging from the show as I learn anything interesting.

The Wavelength Analytics team is at it again with an updated look at the high tech job situation.  They have expanded their work to include Boston as well as the Bay Area.  Take a look at the latest blog.

The Channel, What Channel, Which Channel??????

At one of the Linkedin groups, there was an interesting discussion about SaaS in the channel.  As I read through the posts it hit me that "the channel" was being used as a catch all term.  The old days of VARs, dealers, systems integrators, OEMs and DMRs are long over.  Heck, It was dangerous to make global proclamations about "the Channel" in those days, now look out.  SaaS and cloud computing are the blame for some of this diversity.  Heck the iTunes App Store is extending the reach of the vendor and eliminating partners from the software sale.

If you're not confused, you're not paying attention.

                                                                                  .......  Tom Peters

Okay Tom we are paying attention, but what does it mean?  Partner selection is critical.  It always has been but now if you try to sell a SaaS product through a IT VAR channel, disaster is looming.  IT VARs typically sell to the tech side of the company where as the SaaS decision is driven by the business side and can be viewed a threat by the IT department.  I had this unfortunate experience during the early days of SaaS, we had a wonderful set of resellers to whom we proudly introduced our newly acquired SaaS service.  They were thrilled with the features of the service and how it fit our product family, etc.  However, the reward was sluggish sales and upon investigation we discovered that very discontinuity, ugh.  

Beyond the quintessential analysis of a partner's technical capabilities or vertical expertise or geographic coverage one is well served to understand where in the enduser organization the partners have relationships and is that a match for your product/service.  This is something that your team will have to dig deep for.  I suggest that the subject be addressed covertly, ask about how a typical sale is consummated by the VAR's sales people.  Who did they present to, who made the decision, etc. 

Okay, who do you sell your SaaS product to?  Managed service providers(MSP), VARs with an MSP department, hosting companies who are reaching toward the end user, even disti's with SaaS divisions.  Managed service providers come in many flavors and are typically a nice fit for SaaS partnerships.  However the challenge with MSP's is that they typically offer a limited number of services and few directly competitive products as it makes no sense for them to offer a wide choice. There is an integration challenge as many strong MSP's have a portal that they present to their customers with all of the service they offer.  Your product will need to be part of this portal.  As importantly, these MSP's have billings systems into which the service must fit.  It can be hard to get started with an MSP but unlike a VAR once your service is in, it stays in the offering without much competition.

VARs with an MSP division are quite seductive.  They can sell products and deliver managed services.  True in some cases, a pipe dream in others.  One ugly secret with a number of these VARs turned MSP's is that they have defined the old "break/fix" service as a "managed" service and that is not going to help them sell a SaaS service.  Look under the covers.

  

Some hosting companies have decided to provide services directly end users as well as to MSP's.  It is not clear yet as to whether that is a winning combination or not.  Engage these type of folks with your eyes open.  

Next up are the Disti's.  Most of these firms have designs on the SaaS revenue stream.  Ingram Micro seems to be in the lead with their Seismic division.  According to Ingram:

     Seismic is an exclusive Ingram Micro managed services portfolio that helps MSPs quickly and easily leverage and deploy a broad array of  managed services, enabling them to manage technical labor resources more efficiently, build and sustain recurring service revenue streams, improve service levels and customer satisfaction and increase profitability.

While I don't have experience with the division, it is at least well thought out and sounds good on the web site.

Lots of choices, certainly more to come as cloud computing takes hold.  It makes the job of channel development that much more challenging.

More Jobs?, iPad Debates and Google Answers the Call

Musings, musings.  Are there more jobs?  Is the economy up or down?  The second question no one knows but everyone has an opinion.  However on the first question there is an interesting new source of information.  Wavelength Market Analytics (http://www.wlanalytics.com/wordpress/) has produced The "Bay Area Tech Job Index".  I will save you from a rehash of their magic formula, the site explains it well.  However, they have cleverly analyzed the data to look for trends in the type of jobs one finds in high tech: product marketing, sales, etc.  They provide a more granular look at the High Tech job trends than one can find in your local newspaper, check it out.  The January index showed a glimmer of hope.

Google is such a wonderful success story that we all forget there are people behind the curtain and they make mistakes.  People who have questions about their phone might get a crazy idea that they could use such a device to get that question answered.  It is a wonder to think that they are surprised that consumer want to talk to humans rather than "googling" for answers.  Certainly they are not the only folks to be shy about providing effect customer support.  At least, Google is responding to the demands of the public.  Beyond Google there seems to be a niche of firms positioning themselves as the place where you can actually speak with humans. What a crazy idea.

Google (NSDQ:GOOG) has quietly added a support phone number for Nexus One, and although the search giant says the number is only for inquiries about phone shipments, it suggests Google is taking seriously the numerous customer support complaints that have dogged Nexus One since its early January debut.

Walt Mossberg, Charlie Rose, et all debate virtues of the iPad.  Interesting stuff, but enough already until there is a product to actually review.

SaaS Profits for the Channel, Why is it Always About Money?

Once again, Mike Allers joins the discussion.  He has been on the front lines in bringing SaaS to the channel both introducing SaaS to an established VAR channel as well as developing an existing SaaS channel.  

As many vendors struggle to work a SaaS offering into their portfolio, many are overlooking a key part to that strategy...how does the Channel Community stay profitable in that equation?

Honestly, there isn’t a silver-bullet, so get that out of your head right now. The first thing to understand is that BOTH vendor AND partner will have to adjust. 

Out of the gate, the responsibility will fall on the vendor to take initial steps to create a Channel-friendly offering. What does that mean? First and foremost, when developing the solution make certain to create multi-tiered management capabilities. This means that there needs to be the ability for the customer, partner and vendor to access and add, remove, and manage via a web-based portal.

Vendors will also have to set up a few SaaS go-to-market scenarios for the Channel Community. There should be options to allow the partner to resell the vendor solution as well as to private label the offering under their own or a generic name. Ultimately, this opens the door for the Channel Community to pool together several SaaS offerings from multiple vendors to create specific solutions tailored to each market segment or customer type and let’s them decide how to package it.

The Channel Community will have a few things to pick up as well. It means that the days of only reaching out to customers to every quarter just to see what you can sell them are over. Partners will have to remain in constant contact with customers, staying in tune with day to day activities of the customer. They will need to beef up technical staff to not only include engineers for design, implementation and troubleshooting, but will need administrative technical staff as well to manage the portals. As the Channel Community begins to add multiple SaaS offerings from multiple vendors, they will need to consider what options they need for a front-end portal to manage everything. 

Also, a very clear communication path will be absolutely necessary! Without it, you will be fighting over customers and not even know it. This means that things like deal registration and rules of engagement must be clearly defined and vehemently adhered to.

Rolling out a SaaS offering to the Channel won’t happen overnight and what works for one vendor won’t necessarily work for another. If you spend the time to understand your business and your partners, you can make a very successful SaaS Channel Program. This may be your chance to break away from the peloton and lead the pack...

You can follow Mike on twitter, at MikeAllers

I am a supporter or the iPad, but this video is pretty funny I must admit.

It's coming!! IPad

Just because....we need yet another iPad review.  Whether you like it or not Apple has created yet another device that doesn't easily fit established categories.  The historical IT approach is to ignore it until the users create a stink or simply start using the device in great numbers.  Remember the iPhone, lots of pundits said that it was not enterprise ready.  Well there are 2 million units purchased by enterprises and an additional 5 million that users have put in use in the enterprise.

It is not a PC (or Mac), true.  However, much of what we "knowledge" workers do is consume information and this is a great device for consuming while being mobile.  It is an enabler for mobile access to "your" cloud.  Think about doctors, during each visit they consume information about your heath history in far greater volume than they create about you.  

The iPad conceivably could be enticing to enterprise IT. This isn't a huge leap; the vast majority of personal computers are lap tops.  Heck there was much conversation about tablet PC's, many enterprise's were abuzz with the idea of a computer that could be used like a clipboard, more conveniently in the course of normal business. Alas, the tablet PC was still too clunky to fill the role envisioned everywhere from doctor's offices to factory floors, but the iPad, with it's speed, form factor, and intuitive interface might not be. Is it more suited to business than consumers?  

Well, there are rumors that the folks at Apple have a few business features that will emerge over the next few months.  But before that, think about the iWork application.  While they gave it a multitouch upgrade, it is still an Office-compatible productivity suite.  In the fine print, you can learn that it is a nice presentation tool, it supports VGA output for driving a projector, users can market up slides and point with a virtual laser pointer during the presentation.  The rumors say that there will be direct printing network printing iPad applications and support for dealing with a local file server

For the reseller or vendor, this signals a need to get ahead of the curve on iPads.  Get ready and become the expert for your customers.  Help them in assessing their business uses before users start bringing them in.  Whether you are a reseller, software developer or SaaS provider.  Enterprises will need to support them and as important secure them.  I can see the headlines now, as an iPad "walks away" with a million social security numbers on the disk.  Save your customer, help the CIO's drive their bus, they may get to keep some control if they get ahead of their users. Otherwise there may not be a seat. 

Time for my pet peeves:

     1) Why does my iPhone change "iPad" to "Olaf", did Microsoft slip code into the iPhone as a joke?

     2) Of the many iPad comments, the jokes have been pretty funny, but one pundit went all politically correct and argued that the name "iPad" showed that there weren't enough women in high tech.  I guess she never used a "pad" of paper.  I am waiting for someone to complain that it is code for corporal punishment for kids, iPad(dle) and file suit.

Money, Money, Money

With a view from the front lines, Mike Allers a channel veteran agreed to talk about compensation plans and the channel.  Mike has been a force in the channel at SurfControl, Websense, Nokia, he has seen the good, the bad and the ugly in this business, without further delay here is Mike:

One of the biggest issues I’ve seen in today’s Channel Organizations appears to be setting up a compensation plan that creates a win/win for both the organization and the Channel Team. Many executives tend to focus on the direct relationship between the cost of the sales personnel and the cost of the sale. While I agree that this remains to be one of the most effective methods, I don’t believe that most executives truly understand what the cost of the sale is for a Channel Team. Not only does the cost of the sale have different metrics, it has vastly different timeframes to contend with as well.  As an example, Channel Professionals spend their time developing business relationships and creating business plans then executing on those plans. These can take anywhere from 6 to 18 months to begin to produce. It’s not a matter of stepping into a partners office and demanding purchase orders. It’s about creating a positive business relationship, and those don’t happen overnight.

Depending on how your sales team is structured, in most Channel Sales models the reality is that the Channel Account Manager (CAM) doesn’t have the ability to directly affect their own income. They count on internal sales staff as well as Partner sales staff who are often compensated on their own set of goals.

The CAM will need a little more stability and less upside potential. As a general guideline, a CAM’s compensation should be about at a 60% base and 40% variable that includes revenue and Management by Objectives (MBO). It’s imperative that a good portion of the CAM’s variable pay is MBO’s that involve activities like marketing and lead development. MBO’s should include things like: number of marketing events/activities, number of leads, number of opportunities, weekly reports, regional team meetings, Partner business plans, number of Partner acquisitions, percentage of Partner growth, etc. All of these are ways to increase visibility, increase Partner awareness and indirectly increase revenue while allowing the CAM have a bit of control of their destiny. 

On the other end of this, is how do you create a compensation plan that is “Channel neutral” (assuming you have both direct and indirect sales staff)? This can be a long and drawn out debate, but some key factors to consider are: direct vs. indirect true cost of a sale, percentage of business that is direct vs. indirect and the potential conflict of a compensation plan weighted too heavily in either direction. If your direct staff is paid on the gross value of the sale (which they probably are), do a little research to compare how the deviation from list price fares against an indirect sale thru a Channel Partner...you may be surprised to see that you actually do better thru the Channel. 

And think about some of the other benefits of having a unified field-sales team. Channel Partners absolutely despise Channel conflict and just as you would want them, they would rather be working to find opportunities and closing them. Every time there is conflict, not only does your CAM have to manage it, but someone from the Channel Partner has to take time away from selling to manage that conflict as well.