Nortel upgrading channel program

Presti Channel Report
This month's edition of the Presti Channel Report provides insight into the upgrading of the Nortel channel program.

Ken Presti
"Most of the news around Nortel these days has been around bad financials, layoffs, and reports that neither of these unfortunate incidents interfered with the CEO's ability to pocket more money than he did before," said Ken Presti - President of Presti Research & Consulting, which specializes in go-to-market strategies for technology vendors and service providers. "Meanwhile, work continues on the company's plan of record to upgrade the Nortel channel program, which was the subject of the Nortel Enterprise Partner Forum last month." "Announcements at the partner meeting included enhancements to the deal registration program, originally launched in March of 2007." "In addition to rewarding partners for bringing new partners into the fold, the upgraded program now provides incentives for bringing customers into new product segments, such as moving customers from TDM to data." "Other motivators for bringing in larger deals were also added to the mix." "Nortel has rolled out specializations for unified communications, advanced services, the small-to-medium business market, and a new specialization focused on data infrastructure is imminent." "Each specialization has a sales/marketing component, a technical competency component, and usually requires a given number of customer installations." "For example, the SMB specialization requires 160 engagements as demonstrated through an SLA, maintenance agreement, or other contract that governs an ongoing relationship." "Though Nortel officials express satisfaction with the progress, channel uptake on the specializations has been variable." "Nortel also reports a doubling of SMB-focused channel partners, based on recruitment efforts, enhanced relationships with DMRs and increased efforts by distributors who are rewarded for swinging channel partners towards Nortel." "The company's alliance with Microsoft has also been helpful in this respect." View Channelguy's Blog - authored by Ken Presti and featured on Network World.

Furthermore, Ken provides five main talking points for just about any of the upcoming network vendor partner conferences you might be planning to attend this year: #1 Services: In a world of open standards and interconnectedness, it gets harder and harder to differentiate based on technology alone. So the push continues toward moving the channel toward making their money on a variety of professional services, managed services, or basically anything else that makes you the partner less reliant on pure product margins. As a basic pitch, this is not especially new. But many vendors are raising the stakes by offering incentives for a stronger services practice, and allowing those who don't to more-or-less languish in their own inertia. As an inherent part of the value-over-volume trend, this is more than an issue of profit margins, it's about Number Two in our list.

#2 Getting in Tune with Customer Business Problems: Sometimes channel partners feel a little bit dissed by this piece of advice, which is arguably the biggest no-brainer of the technology industry. "Do you really think we could have stayed in business if we were not in tune with the customer's business needs?," they ask. Well, sort of. But herein lies the difference. Back in the bubble days, technology uptake and the enabling budgets were so strong that the mere promise of good results would often lead to P.O.S. Sometimes those promises did lead to good results; other times, maybe not. But the strong economy and emerging connectedness of companies and business processes kept things humming right along. Salespeople could sell based on the latest and greatest, and on much more of a product-by-product basis than they can now. Today's IT purchaser is much more skeptical. They're more likely to dig more deeply into the economics behind the purchase and, whatever they buy, the certainly want it to integrate well with whatever's already on the network. So the channel partner is becoming far more consultative, and needs to understand more about the problems the customer's management is really focused on solving. This is another big emphasis in partner conferences nowadays, and it leads us to...

#3 Applications: Yes, you're used to hearing about applications from all the applications vendors out there. But more recently, the infrastructure players have jumped on this bandwagon, as well. Issues #1 and #2 basically boil down to solution-selling, and that makes the application the star of the show. So effective integration and network optimization emerge as popular themes.

#4 Ease of Doing Business: As vendors work to make their channel programs more comprehensive, the complexity of those programs tends to get jacked-up by several orders of magnitude. This has not been a popular outcome within the channel, and the vendors have clearly gotten the message. So streamlining and efficiency are now viewed as equal in importance to building comprehensive programs.

#5 Closing/Widening the Gap: This one depends on market space and exactly who the vendor is. But I can almost guarantee you'll hear about closing the gap on Brand X, who will probably be identified with some safely vague descriptor that can't be misidentified. Unless, of course, you're at the Brand X conference, at which you'll hear the promise to stay one to three years ahead of the rest of the market.

What has been your experience with the Nortel channel program?

Contact Brad Reese

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