Finding the Right Fit: Managing the Reseller RelationshipBy Leah Gabriel Nurik | Posted 2010-02-03 Email Print
The temptation for younger companies in creating a channel program is to recruit as many partners as you can handle. But cloud infrastructure provider Terian Solutions learned the hard way that it's important to vet partners to find the right fit and create lasting relationships.
Newly forged reseller partnerships generally are charged with excitement and
filled with the promise of new customers and increased revenue, but, in
reality, many partnerships fail to drive the anticipated business value. So,
what should VARs look for when inking a new reseller deal?
Terian Solutions President Mike Colesante provided Channel Insider with some insight into how to forge an effective and long-term reseller relationship. The managed services provider (MSP) of cloud storage and backup recovery relies on its 50-strong reseller community for close to 70 percent of its revenue.
The company learned some hard lessons since its inception over the past nine years. Colesante says, "[Terian] actually had to fire some of its VARs because they don’t share the same philosophy.
"In the beginning, we spent a lot of time signing up almost every VAR we could get, but our support costs went through the roof," he said.
Colesante realized the company needed to fully vet resellers and make sure that potential partners shared a similar commitment to customer support and would hold up their end of the deal when it came to managing the customer account.
Terian and its resellers are playing in an increasingly competitive and growing market. Software providers such ParaScale and Asigra are duking it out for customers and key MSP partners that can help them gain traction and share in a growth market driven by a data explosion. And, the market does not appear to be letting up. A recent study by the Berkley School of Management found that more data has been created in the last three years than in the last 40,000 years of human history combined, spawning more startup cloud storage hardware and software providers to fill the need.
Terian’s business model is both direct and indirect, with Master Lock and Cotton Companies as direct customers. For direct customers, Terian provides complete end-to-end managed services for backup and recovery, powered by a variety of technologies like Asigra Software. Colesante describes Terian’s direct model as "almost like outsourcing all your backup needs."
Terian’s indirect channel is made up of a network of resellers that rent backup space on Terian’s cloud architecture and provide an array of managed services directly to the customer.
Over the years, Terian encountered resellers that did not service customers or "dropped the ball" on identifying issues that would have resulted in lost data.
"We did not want our name associated with that," said Colesante.
In an effort to revamp its channel approach, the company began to look for existing and new reseller partners that shared the same objectives, approach and philosophy to approaching the managed services market and how to best service customers.
"When we qualify our resellers, we make sure they have the same philosophy," said Colesante. "We are very careful to talk to our resellers and that they are going to be proactive with their services."
In an effort to build trusting and successful relationships, Terian tries to return the favor with competitive pricing and respecting its existing customer relationships.
"We tell the reseller, 'That is your customer and we are not going to go direct,'" said Colesante. "We really do keep the relationship sacred—they own the customer."
Tel Serv Communications, one of Terian’s VAR partners and a full-service managed services provider, confirms Terian’s approach, and says that Tel Serv’s commitment to its customers made the partnership with Terian a good fit.
"We’re not a sell it and run company," says Eric Hanson, one of Tel Serv’s co-owners.
Hanson says that during the partnering process, Terian was upfront about expectations and asked it directly how it serviced its customers. Terian also stated it was only looking for resellers that would resolve issues quickly, whether alone or with the help of Terian support engineers.
"They told us that 'if you are going to front this program, we need you to work with us to do that,’ and that was a key part of the screening process," says Hanson. "They have held true on that."
When asked about what makes a successful partnership, Hanson offers his experience and some of the questions he asks himself and potential technology partners.
"First, does the tool work or not, does it cater to an MSP, and is pricing set up to be flexible based on the ebb and flow of seats?" says Hanson. "And, last, what is the support infrastructure like?"