Sometimes it's hard work to find the best of both worlds. Just two months into the launch of a new reseller program, Network Associates International (NAI) MD Paul Muller has responded to reseller concerns over direct business with the promise of fat margins and a "fair" approach to the channel.
Resellers in recent contact with ARN highlighted worries over NAI's penchant for contacting customers direct for antivirus software licensng and taking large deals direct to the customer.
The bottom line, Muller claims, is that users get the opportunity to choose to deal with an NAI partner or the vendor itself. "I want to make the program fair," he said. "The only time I will take business direct is if it's at a user's request." However, under the company's new channel model, the majority of business is pushed through the channel, Muller explained.
In fact, he said, around 80 per cent of revenues come from the company's VIP program, where NAI's 17 sales representatives find new or upgrade business and direct the sales through either Gold or Silver partners. In this case, he explained, resellers are handed "bluebird" deals. Although margins may sit at around 2 per cent, the only work involved is processing an invoice, Muller argued.
This side of the business has been more organised since February 1999, when NAI started tracking details of every sale and taking centralised control over licensing renewals from distributors, which were previously doing a bad job at keeping detailed sales records, he said.
However, under the Channel Account Managed (CAM) model introduced in January this year, if resellers bring new business to NAI off their own bat, the company promises margins of between 30 and 40 per cent. "The CAM model creates incentive for the channel to go out and find new business," he said.
NAI's other working model is the Total Solution Program (TSP), in which lower profile deals are closed using the combined efforts of a channel partner and NAI's sales team.
Around 15 per cent of revenues are sourced from the CAM model, with just 5 per cent from TSP, Muller said. The objective now is to shift revenues in the TSP model to 10 per cent, CAM to 40 per cent and VIP to 50 per cent. According to Muller this will create greater equity between the vendors and channel.
NAI's Gold Partners include Praxa, Com Tech, Alpha West, Scitec, Sunrise, Dunson, Leading Edge and more recently Powerlan.
Meanwhile, Muller said a focus for the company in the coming months will be to rebuild its brand image after dividing its business into four units: McAffee, PGP, Sniffer and Magic.
The trouble previously in promoting just NAI meant that the company lost the existing brand awareness of each business unit. "We lost some brand recognition on marketing," Muller conceded.