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.

"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.