Software developer Baan Company has launched a reseller recruitment drive aimed at building a channel to sell its enterprise resource planning solution.
Though traditionally a direct sales organisation, business development director Peter Colquhoun says Baan's channels push is serious, as the company seeks to reach $2 billion in revenue by 2000. "We're in a channels program for the long term. In fact Baan sees that by 1998Ð99 50 per cent of its licensed revenue will be coming through the channels program."
The first step in getting there in the Australasian market involves the appointment of suitable resellers in areas not currently serviced by a Baan office, namely anywhere outside of Sydney, Melbourne and Auckland.
Colquhoun says Baan is well aware that many opportunities exist outside this market, and that local representation through resellers would be a comfort to users. Baan resellers will be responsible for expanding the total market penetration for Baan, while also providing first level customer support.
"Part of getting to $2 billion by 2000 is expanding our market reach through the channels program," said Colquhoun, "particularly to address the mid-tier and the lower end of the market.
"So what we are looking to do, particularly with Australia, is address the $20 million to $50 million turnover companies that can take advantage of a product like Baan, and we want to push that through a channel which can scale the product in terms of implementations."
Colquhoun stresses that the appointment of resellers in regional geographies is not a market development exercise paving the way for Baan to open direct sales offices that would compete in those same geographies. "If we did put an office into places where we don't have an office it would be as much to support the local partners as it would be to address upper level market segment that wasn't being addressed by them," he said.
Baan will operate a two-level reseller program in Australia, where it will most likely appoint two systems integrator level companies and eight value-added resellers. He explains the differences as this: "The major difference between a systems integrator and a value-added reseller is one of scale. We see systems integrators operating on a national basis, and typically they will be companies that might employ from 75 to 300 people. They would be across most aspects of the market in terms of hardware, networking capability, and delivery of other software.
The road ahead
"Then at the VAR level it really is those operating on a geographical basis. They may be privately owned companies of 20 to 30 people."
Colquhoun said Baan will be looking to push Windows NT as the strategic platform at the medium level business market, so it is likely that VARs will also be Microsoft solution providers. "We want our VARs to focus very much on Windows NT, whereas the systems integrators will be both Unix, Windows NT or a combination thereof," he said.
"Ideally they would already be selling or have sold a software package that may be financial, distribution or manufacturing oriented. They may well have been selling a system now considered a legacy system, which they can see that their customers are going to move off, and here's an opportunity to upgrade them to a modern package."
Baan resellers will be required to undergo training in the products, but Colquhoun says they will be well supported by Baan's channel infrastructure, currently under development. He said they will receive dedicated management and presales resources, along with education facilities and backup support.
To make the customer sales process easy, Colquhoun said Baan has also developed pre-defined business models that can be dropped into a business with minimal configuration. "I don't believe that smaller companies are actually any less complex in their business processes than larger ones; it's just a matter of volume," he said.
"What we intend doing is delivering pre-defined business models made to stock. The implementation can be seen from a graphical view of the business processes, forgetting about all the functionality. So we're trying to simplify the process of implementation."
Baan's move into indirect sales comes at a time when the applications marketplace is starting to look more closely at the reseller community as a viable path to sales. Oracle continues to strengthen its reseller channel, as does Systems Union, while even PeopleSoft is rumoured to be considering indirect sales.
While Colquhoun believes we are many years from seeing Baan sold off the shelf at Harvey Norman, the continual "commoditisation" of the application software market is leading to fundamental change. "I believe that channels will become more important to the major vendors," he said, "and there will be competition in the channels. Therefore we obviously want to make our channel program very competitive. We want our people to feel that they are going to have a lot more success with Baan than they would with one of the opposing packages."
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