It's been nine months since IBM spin-off Tivoli Systems decided to refocus its business around the channel and Mark Latchford, Tivoli's Asia-Pacific general manager, is pleased with how the company is growing its channel sales.
The network management software company has geared up its channel strategy in the Asia-Pacific region in an attempt to bolster the company's market share in the mid-sized business market.
Historically, over 80 per cent of its business was sold directly into large enterprises, but when enterprise growth slowed, Tivoli went looking for new ways to market.
"The figure people bandy around is that there are 2000 organisations in the world that have got over a billion dollars in revenue or more, and Tivoli is represented in 75 per cent of those," said Latchford. "But where we had a much lower penetration was in the faster growing, smaller enterprises. Clearly if we wanted to sustain the triple digit and double digit growth we're having then we had to improve our presence in the middle market. Part of that, and it's a no-brainer, was our need to increase our routes to market. So over the last nine months, Tivoli around the world has become very vocal in its commitment, and the work behind that commitment to become a channel-oriented organisation," he added.
In 1998, about 16 per cent of Tivoli's revenues went through channels. In 1999, just prior to its channel initiatives, the figure reached about 20 per cent. According to Latchford, the company hopes to post worldwide channel revenues of around 30-40 per cent this year.
"What we're saying to the channel is we're not just going to talk about it, you're actually going to see our channel participation rate," Latchford said.
From the Asia-Pacific region, Tivoli has exhibited a higher channel participation than other regions and Latchford puts this down to the culture and skill sets inherent in third-party companies in this region.
"In the Asia-Pacific we're probably leading the Tivoli world to execute our channel commitment," claims Latchford. "Why do we want to do that? Skills is one thing. The service envelope [provided by channels] that goes around our product is another, and thirdly it gives us access to markets we wouldn't normally have."
Tivoli goes to market through some of the country's larger outsourcers and system integrators such as IBM GSA and EDS, as well as establishing ties with many international consulting companies such as Anderson Consulting and Delloitte's.
Tivoli is backing a number of partner programs concentrating on technical and sale skills, as well as considerably bolstering its marketing budget.
"Because our culture historically had been direct, a lot of our marketing activity was focused on the end customer. Its a little bit of one begets the other. To seduce the channel you really have to have market presence, because no one is going to approach you or sign up if you're an unheard of," Latchford said. "But what we have done and a metric of that is we've increased our channel marketing by 70 per cent."