Update: Novell's European Channel Strategy

Novell is shaking up its channel strategy in Europe. The VAR Guy reached out to Novell Chief Marketing Officer (and Channel Chief) John Dragoon for his thoughts. Here’s what Dragoon had to say.

First, a little background. Recent reports suggest that Novell has cut some of its European distributors even as it seeks additional channel partners. The news surfaced after Novell announced mixed financial results in August 2009.

Channel Chatter

Now, The VAR Guy’s Q&A with Dragoon…

The VAR Guy: Has NOVL cut the number of channel partners it has in Europe? If so, why and by how much?

Dragoon: We distinguish between “channel partners” and pure distributors. Novell has in fact rationalized distribution in several key markets – roughly 15-25%. This is a result of the fact that:

a) We were over distributed in many markets due to a series of acquisitions that Novell has made over the past few years, each of which has added more distributors to our fold;
b) we are focused on quality vs. quantity. We are working with true value added distributors who are willing to invest in developing a competency and practice to support Novell’s solutions; and
c) the retained value added distributors have made a commitment to help Novell recruit and enable new resellers who can best support our Datacenter, Identity & Security and End User Computing solutions.

The VAR Guy: Has NOVL made any channel partner cuts in North America, elsewhere? If so, why and by how much?

Dragoon: Distribution in the Americas has been consistent year over year with the exception of adding Avnet as a Value Added Distributor.  We have 5 relationships with Major Distributors in the Americas.  (ATG/Arrow, Avnet, Tech Data, Synnex and Ingram).

In the Americas, our number of Solution Provider / VAR relationships has remained constant although the mix has changed to reflect our new specializations and emphasis on quality vs quantity. We have successfully recruited a large number of new partners whose core competencies are more aligned with our strategy and solutions offerings while some partners who are no longer aligned to our business model are no longer with us.  Our new partners are more capable of selling and providing services around solutions and are aggressively participating in our new profitability programs like Deal Registration.

The VAR Guy: What types of NOVL partners are doing best right now? In other words, what lessons can average or under-performing partners learn from your best partners right now?

Dragoon: Partners that are recognizing growth and increased profitability with Novell are those that have committed to jointly develop and execute on a business plan with Novell. We use a business planning process and cadence to drive clarity and focus around our objectives and market opportunities and to ensure consistent execution in the marketplace. We also assign discrete coverage for our top partners and ask those partners to reciprocate with a dedicated vendor manager to support Novell’s business.  Novell is investing heavily in our channel through partner programs, incentives and enablement.

Most notably, partners who invest in and have taken 3 consecutive quarters of education and training dramatically (more than 3 to one in revenue) outperform those partners who have only trained 1 quarter or less with us this year.  The lesson: a commitment in skills and training pays off.

Parting Thoughts: BrainShare and Competitors

Although The VAR Guy didn’t bring it up, Novell plans to relaunch BrainShare conferences in 2010. The events, to be held in North America and EMEA, will seek to further educate thousands of Novell customers and partners.

In the meantime, Novell continues to face intense competition. Red Hat last week (Sept. 23, 2009) released strong quarterly financial results. And Canonical, an upstart of sorts, will seek to gain server and cloud momentum with Ubuntu Server Edition 9.10’s launch in late October 2009.

Follow The VAR Guy via RSS; Facebook; Identi.ca; Twitter; and via his Newsletter; Webcasts and Resource Center.