Novell Moves to Improve Partner Profitability

Looking to become a more channel-friendly company, Novell is instituting a set of broad-based changes to its channel program designed to fix channel partners' primary complaints with—profitability and the complexity of working with Novell, among others.

To accomplish this, Novell is ripping out its entire pricing model, which used to include four different price lists, and replacing it with a single price list. Novell is also introducing standardized volume discounts to streamline a partner's ability to negotiate large customer opportunities.
 
"It was too complex," says Javier Colado, Novell's departing channel chief who is moving to take over operations of Novell's EMEA business.

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"What we did nine months ago is a survey with some existing channel partners and others who were not working with us," Colado says. "We asked them what areas we should be focusing on. We had a lot of partners that said they were not making enough profit with us."

That was especially true for partners in the United States that count direct market resellers such as CDW among their competition, putting a lot of pressure on pricing and, in turn, on margins, according to Colado.

In addition to the move to simplify pricing and improve the terms for partners, Novell has introduced deal registration that provides a 10 percent rebate for partners that register a deal that is a cross-sell or an up-sell. If the partner brings an entirely new account to Novell, it will receive a 20 percent rebate. The deal minimum to qualify for deal registration is $10,000.

Novell is also introducing volume rebates based on the amount of new business a partner does with Novell. For example, if the partner reaches a target of $1 million, the partner would get a 3 percent rebate on the entire amount.

In addition to the profitability issue, partners also told Novell that doing business with Novell was too complicated. Simplifying the price list is designed to address that issue. And Colado says Novell has improved its PartnerNet portal to make it easier for partners to navigate. For example, the company has created a new track for systems integrators and influencing partners that includes information on best practices for consulting.

Those who responded to the survey identified the need for "more flexible ways to consume training" and greater investment by Novell in channel partner success as two additional issues.

"The cost of participating in physical training was a factor, even when the survey was conducted nine months ago," says Colado. So Novell is offering its Gold and Platinum partners free access to all online training programs. Silver partners will also get some access. Plus, Novell is introducing a "quick start" week-long training program to get partners up to speed in a hurry.

As for investment, Novell is adding more structure to its MDF program, including helping partners that are looking for marketing campaign guidance and assistance with the execution of such campaigns.

Novell also announced some new leadership in its channel organization. Novell reorganized its channel leadership in January when it announced the promotion of Colado, its channel chief, to serve as president of the company's EMEA operations. Novell says Colado will assume this new role after his assignment to launch Novell's next-generation global channel program.

With that switch, the company moved leadership of the channel program to Novell's marketing organization, having it report to John Dragoon, Novell's chief marketing officer. It's the most recent in a set of revolving-door moves for the role of channel chief at Novell. Pat Bernard took the job little over a year ago. Colado replaced her in September 2008.

Novell made a handful of other changes as well, according to Colado. Steve Hale will lead the Global Data Center Channel. Hale has 20 years of experience in enterprise sales and channel services including 17 years of executive leadership with Microsoft. Mark Taylor will lead Novell's Global End User Computing Channel, Novell said in a statement. Taylor has more than 20 years of experience as a channel sales and management executive with Macromedia and LANDesk. Dan Veitkus, formerly vice president of global field operations for Novell, has taken over the role of vice president of partners for EMEA.