Gateway Makes Channel-Friendly Moves

It’s been more than a year since Gateway Inc. launched its ProNet reseller program to bring together VARs (value-added resellers) and pro-AV (professional audio-video) integrators to integrate Gateway’s growing front- and back-office business product lines for customers. The results have not been a resounding success.

But the major direct-order firm, according to Tiffani Bova, senior director for indirect sales/professional channel, is going to make a major push in 2005.

The hiring of Bova in June 2004 alone would seem to be a major step in that direction. She is recognized in the reseller business as being a top vendor channel leader.

Bova came to Gateway after two years at Web hosting power Interland, where she was vice president of channel marketing and sales. Before that, she was vice president of channel sales and programs for another Web hosting company, Affinity Internet Inc. This is her first venture into system reselling.

Bova described the existing ProNet channel as a “very introductory step into the indirect channel.”

Like many system reseller programs, it’s a three-tiered system based on volume with an associate level, member level and premier level. A partner rises up to those levels in return for bigger revenue commitments, and Gateway gives them more marketing funds along with better pre- and post-sales support.

Today, ProNet has about 350 partners, with 20 percent to 25 percent of the partner base delivering the majority of the business. Bova wants to deliver a better program to those resellers.

“I came on board in June,” Bova said, “with the goal of making Gateway number one in the channel. Traditionally, Gateway has underestimated how important the channel could be in our competitive marketplace.”

But not anymore. “Senior management is committed to doing better by executing with money, resources and time to deliver a better program,” Bova said.

In 2005, Gateway’s partners can expect to see “better programs, demo units, deal registration, MDF [market development funds] and co-op dollars.” The goal? To “make Gateway into a tier-one partner.”

Bova said she thinks Gateway’s recent acquisition of eMachines will help her in that effort. “With the eMachines acquisition behind us—eMachines was 100 percent retail channel—Gateway’s understanding of economy of scale now allows me to get sponsorship for channel activities.”

“We’re now setting our strategy in motion, with more to come in 2005, with incremental improvements on a regular basis,” Bova said.

Some of those changes are already in place, she said. “Today, we have neutral sales. If your customer has a direct representative, and we close the deal but the last step is to go through you, the reseller, the deal doesn’t have to be kept direct. The direct representative is paid regardless of whether it’s through the reseller or the representative.”

After all, Bova said, “Sales reps are creatures of their commission; it’s the only way we can get the behavior we’re looking for.”

Still, Bova said she knows moving Gateway from being a direct sales company to one with a mixed model won’t be easy. “We have a lot of work to do to re-establish ourselves in that space,” she said.

“But in 2005, with better margins out to the channel, long product life cycle and making it clear that we’re not interested in building out a large service organization—that work is for our partners—we will prove that Gateway is a channel-friendly company.”

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