Ellison: Tell us about the new channel program.

Komet: We revamped our channel partner program completely. We realized that a tiered-model system—where there's a silver, gold, platinum model system—is outdated. We wanted to offer all components of our channel partner program to every one of our channel partners. We have more than 12,000 channel partners that we do business with in North America alone. We wanted to make sure that each one of them would be able to get every one of the benefits that we had so we introduced a program that really centered around four key areas.

Sales and technical training that would be absolutely free.p Free technical support over the telephone. We realized that a lot of resellers tend to be implementers, system integrators out on site somewhere. If they need assistance, we want them to be able to pick up the phone without any problems and without being charged for it. They should have access to our technical support and they do at absolutely no cost to them.

So those were the first two items that everyone was blown away with and the second two items were even better.

We announced a lead generation program. This year we will distribute over $750 million in leads to our channel partners. We have a call center down in the Tampa area with over 400 certified sales people that call on behalf of our channel partners, drumming up business for our them both with existing CA accounts and prospect accounts. It really expands the reach of our sales force in helping partners get to our customers.

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The fourth item is rebates. Every single one of our partners can qualify for a rebate which is very different that any other program that is out on the market today from a software vendor. If you look at Veritas or even Symantec, it's only their higher tier partners that are eligible to get rebates. Our rebate goals go up to 15 percent depending on how much and what products you sold. CA does three lines of business through the channel—storage, security and data modeling. And each one of those has different rebates associated with it.

Ellison: How do you distribute the leads?

Komet: An extranet was set up for partners to be able to go in and look at the leads that are associated with their accounts. So if you take an account like CDW, they have their own extranet access, they go in and they only have access to the accounts that are applicable to CDW.

Ellison: Are leads assigned to those accounts according to geography, partner specialty, or other criteria?

Komet: One of the first questions that we ask is who is your preferred reseller or your preferred provider of software? And usually the customer has somebody. If they do not, then we make the offer to introduce them to some of our partners. We don't ever want to fight with the customer. We want to do what is best for them and whatever their decision is.

Ellison:These changes are pretty dramatic. Could you give us an historical look at how they came about?

We based the program on a couple of items. One is, obviously, partner feedback. That's extremely important to us. We solicited that ourselves and we worked with our distribution partners, acting as a third party for CA, so we could get feedback that was more unbiased. We also wanted to be sure that we did not view our partner program specifically as a profit center for CA. We do not make money off of our partners.

We called the proposition that we made to our partners a "win-win-win" proposition. The customer wins by getting the leading edge technology. The partner wins by making the margin on the front end as well as getting the rebate on the backend. And CA wins by keeping a revenue stream associated with its product line and expanding market share--all of the things that any vendor would want to do.

Ellison:We often hear solutions providers complain about the high cost of training and the financial burden of ongoing certification requirements. What steps has CA taken to reduce the training burden for its partners?

Komet: It's pretty unique to find a software vendor that does both the sales certification training and technical hands-on certification at absolutely no cost. Usually sales training is at no cost because you can pretty much do that online today. Symantec has a system to do it online. Veritas has a cd-based system. CA has an online system but the technical training, where you need a qualified engineer and a qualified instructor to go out and train, involves a lot of cost. At CA, we're willing to do that at absolutely no cost. We worked with our education department to develop training specifically for partners at no cost. We do classroom-based training at central locations either at CA facilities—we have solutions centers and education centers around the country—or we partner with our distribution partners to open up their facilities. So, Ingram in Santa Ana, for instance, opened up their facility and allowed us to use it as a classroom to bring in partners and certify them.

Ellison: How have you dealt with channel conflict between your partners and direct sales force?

Komet: One of the things we've done very very well in the last three to four years has been to eliminate channel conflict between the direct sales force and the channel partners. There certainly is a trend of moving more and more products through the channel. There are some products at CA like our mainframe products that will always remain a direct product because there are very few partners that have expertise in that area. However, products like our anti-virus product or ArcServe, our storage product, really remain a channel-filled-only product.

Our direct sales guys can go into an account hand in hand with a partner, help them sell it and they get compensated for it but at the end of the day it's the partner who has the product flowing through them. So it's a very simple model: We pay everybody; everybody's happy.

Ellison: What percentage of your sales flow through the channel?

Komet: Again if you break the mainframe part out—mainframe is still about 50 percent of CA sales—close to 25 percent of overall business today is through the channel. And it's growing.

Ellison:What opportunities lie ahead for partners in 2004?

Komet: It happens to be our rebate program. Our highest rebates are focused on security and we see that as the hottest growth area right now.

That brings us to the eTrust Secure Content Manager which we announced at COMDEX. SCM focuses in on anti-virus and anti-spam which is obviously a huge issue for any company today, as well as URL filtering, web surfing—all within one integrated solution. This is a huge opportunity where we've heard great feedback from our partners, saying 'the market's ripe for something like this.' The pricing's right and obviously the rebates that we're putting in their pockets don't hurt either. The security market is growing very very fast but our storage market share is growing as well. We're really seeing a lot of growth in grouping our technologies together.