NAI cleans up its channel strategy

NAI cleans up its channel strategy

Network Associates (NAI) is hoping the lure of healthy margins and a commitment to channel partnering will help it maintain its healthy revenue streams and acquisition plans.

The corporate security and antivirus specialist recently launched its Gold and Silver Partner programs in a bid to garner support from both large and small channel players.

"There are thousands of resellers out there and we want them all," Paul Muller, Network Associates' managing director, said.

Muller explained the two partner programs are designed to allow any reseller to decide what commitment it will make to the company.

For example, a small computer retailer can sell antivirus products under the Silver program with a single customer licence without committing to large quantities, while larger players such as Anite, NetStar, and Software Spectrum have committed to much larger amounts. "We have passed many millions of dollars through Anite," Muller said.

The program is part a strategy he claims competitors such as Symantec cannot match. "We are giving exceptional margins. We don't have to drop our pants on pricing," he said.

NAI achieved 442 per cent growth in the last six months alone, which was largely attributed to the channel, Muller said. In addition, the revenues are strengthened by a commitment to "never lose a deal. We could easily become a $100 million company within the next two years," he said.

NAI's growth comes after international reports suggested the company lost $US195.8 million, or $1.41 per share, and received revenues of just $25.2 million in its second quarter, ended June 30.

Muller said the reports were inaccurate because its channel realignment had not been considered. The company reduced its distributor's inventory down to 13 weeks worth of stock during the last quarter, at a cost of $200 million. Meanwhile, the company sold $300 million worth of stock during the same quarter, leaving it with around $25 million in net profit after expenses, Muller claimed.

The company has also had to cope with the costs of acquiring eight companies during the past year.

Since August last year, Muller has "realigned" the company to adopt a heavy channel model supported by 13 sales consultants.

In addition, NAI recently appointed Vicki Bain as its distribution sales manager and Charles Vallejo as its channel sales manager for Australia and New Zealand.

The company, which now has a total of 60 local employees, is close to releasing deals of a new services unit, Muller added.

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