Why Some Partner Programs Don’t Cut It Anymore

It’s a fact that not all channel programs are created equal.  And, often, partners of all stripes find themselves pigeon-holed into program models that don’t reflect how they do business.

When developing partner programs, vendors often miss the basics of effective partner engagement because they are thinking about their own business model, processes and internal operations–what’s easiest for them. This can make for an uncomfortable fit, and certainly one that lacks mutual benefit.

If you’ve been in the channel as long as I have, you may remember that, back in the day, the classic “reseller” easily fit into a vendor’s “reseller program” because it was a simple model. You bought the box, probably from a broad-line distributor like Tech Data, Ingram Micro or Merisel, and you resold it. Easy.

But many partners soon evolved into “value-added resellers” or “solution providers”–terms still widely used to describe partners offering a deeper dimension of expertise and services. In response, vendor programs adapted, providing better-defined requirements and benefits for this new kind of partner.

Microsoft and Cisco are just two examples of companies that found success building great programs for VARs, largely because they considered their partners’ business models when creating program benefits and architecture.

Still, some IT vendors have struggled, and partners have paid the price. Even before cloud made its entrance, a lot of vendor programs ended up force-fitting partners into their program, with the partner often having to adjust its business practices to fit the vendor’s model.

Remember “channel assembly?” A short-lived and costly endeavor by corporate resellers to add value by literally building customized PC boxes right off the PC maker’s assembly line or by setting up a shop nearby the maker’s manufacturing center. Some resellers lost their shirts in that endeavor because it wasn’t in their business model’s DNA.

Although channel assembly is an extreme example, IT vendors–especially those that are new to the channel–need up-to-date, simple partner programs with easy engagement models. In other words, partners shouldn’t have to retrofit their 21^st century business models to work with outdated ’90s-style structures.

In fact, Robert Faletra, long-time channel advocate and CEO at The Channel Company, recently called for partners to move away from descriptors such as VAR and solution provider to what he calls a Strategic Service Provider model. Because today more and more partners are aligned strategically with customers to provide more than just hardware or software.

I don’t know if partners will follow that call, but I think that smart partners intuitively will seek out vendors that make it easy for them to do business.

Knowing full well that no two partners are the same–and that each company provides its customers with a blend of solutions, products and services–at SAP we’ve decided to go simple. With the recent release of our award-winning partner program, SAP PartnerEdge, we’ve retired long-held partner types such as Value-Added Reseller, Software & Solution Technology Partner and ISV (among others), and evolved our program based around four flexible, behavior-based engagement models: Build, Sell, Service and Run. These are all based on the variety of things partners do, the level of commitment they want to make, and how they want to define their business with SAP and our mutual customers. To see how simple it is to partner with SAP, check out sap.com.

Vendors need to remember that partnering is a delicate balance of openness, simplicity and a desire to succeed. The cookie-cutter approach simply does not work, and partners shouldn’t be bashful about making their needs known. Programs that make it easy for partners to do business the way they define it are winners. Complicated or outdated programs need to go.

What do you think?

Ira Simon (@IraASimon) is vice president, Partner Marketing & Communications, at SAP. Learn more about partnership opportunities at: http://go.sap.com/partner.html.