IDC: Microsoft, IBM lead software channels

IDC: Microsoft, IBM lead software channels

Microsoft and IBM came out at the top of the pile in a new report assessing the global channel programs of major software vendors.

IDC's Worldwide Software Channel Program 2005 Vendor Profiles credited the two companies with having the most effective channel program structures.

"Microsoft leads the group based on its strong program structure, scope of partner relationships and its ability to support its mandate through a relatively strong infrastructure," the report stated.

"IBM is another leader because of its equally strong program structure and comprehensive capabilities around enablement." The report is based on an annual survey of channel programs offered by the top 25 software vendors. Other players that demonstrated stronger commitment to channels during the past year included CA, Oracle and Progress Software.

On the flip side, the report noted infrastructure and middleware providers including Sun, BEA, SAP and Novell were still lacking a cohesive approach towards partner management.

Commenting on the findings of the report, IDC software analyst, Chris Chong, said there had been a seismic shift in the attitude of vendors in terms of how they chose to interact with partners.

"Partners are becoming a bigger focus than before," he said. "In the past, most of the opportunities were in the enterprise space. Now vendors are moving into the SMB space. "

"This market, especially in the low to mid-end, needs a different approach. Indirect is a more practical way to sell to these customers, so vendors have shifted their focus onto partners."

Vendors were also looking holistically at their channel by trying to build partner skills rather than concentrating on sales activity alone.

"It is not just management but also the development of partners," he said.

"Instead of compensation and support of sales, vendors are now creating growth paths for partners."

"They are identifying future revenue opportunities, and growing in terms of the number of deals per partner and the size of deals those partners can do. This is enabling them to become industry solutions providers."

Chong said infrastructure players tended to have more comprehensive partner programs because they structured their business model around providing solutions to vertical markets. With the push into SMB, this was forcing them to recruit more resellers.

Chong said overall spending on partner programs continued to rise, with the top 25 software vendors spent $US3.8 billion on partners in 2004 from indirect revenue of $US49.4 billion. This was up from $US3.5 billion invested in partners during 2003.

However, the share of channel revenue invested back into partners had actually decreased from 10 per cent to 7.73 per cent over the same period.

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