Vendor Startups Tuning Into the Channel

New product vendors are making the channel their preferred go-to-market strategy as they seek to capitalize on VARs existing customer relationships, broaden the market reach of their products, and speed adoption of their technologies .

Bill Brown, director of channel sales at virtualization software developer VKernel said the channel gives startups crucial speed and agility in markets that can change in the blink of an eye. VARs and integrators develop and nurture relationships with customers that could take years for a vendor to cultivate directly, he says.

Brown added that for ISVs and software development firms, the channel functions as an independent sales force, and can more effectively communicate the market need and the value of a vendor's product to customers.

"We don't have a sales team, but we do need to quickly develop and relay the effectiveness of what we do, and that's what the channel excels at," Brown says.  The channel can also provide scale, as relatively few channel partners could have access to hundreds of potential customers.

For Phase2, a Hawaii-based solution provider, the channel was an obvious way to go to market when the company decided to package and resell its SaaS offerings. Kevin Doherty, CEO of Phase2, says that being based in Hawaii limits his copany's scope and scale. Repackaging and offering Phase2's services through channel partners in the mainland U.S. and internationally, however, lets him reach myriad new customers.

"Right now we have handfuls of partners who can go into their existing clients' base and give us reach into markets we otherwise wouldn't be able to touch," Doherty says.

Doherty adds that since VARs play a crucial "trusted adviser" role for their customers, the sales cycle is eased and accelerated.

"When a partner is presenting a local face on our company's products, it makes for a much smoother sale than if the customer was dealing with someone they didn't know or had never heard of," Doherty says.  Channel partners not only expand Phase2's customer base, but also increase the company's resource pool, since many regional and local VARs are skilled at certain niche applications or markets, he adds.

Those deep VAR relationships motivated Fortisphere, another virtualization software startup, to drive business through the channel, says Dan Harding, vice president of sales, Fortisphere.

"A good channel program leverages the relationships VARs have with the end-user, and enables the adoption of the technology much more quickly," Harding says, adding that VARs understand a customer's needs much more intimately and are able to recommend products and services that could best meet those needs.  

Jim Rodriguez, managing partner for Fortisphere partner MTO, said the relationship works both ways.  While MTO provides the customer relationship, vendors' products can offer VARs the ability to provide services and support around those products, making the partnership equally beneficial.