CA Sees Big Managed Service Opportunity for the Channel

By Michael Vizard  |  Posted 2013-04-25

Now that CA Technologies has settled on a new strategic direction that will rely a lot more on orchestrating the development, management and deployment of applications in the cloud, the company's channel partners are going to have to determine how far they want to go along for the ride.

While there is no shortage of companies looking to orchestrate cloud services, CA Technologies is making a unique commitment to filling out a CA Cloud Delivery Platform that will enable channel partners and their customers to not only deploy an application in the cloud or on premise, but just as importantly move that application either to the cloud or back on premise as the customer sees fit.

From a channel perspective, this approach will create a unique opportunity for channel partners to manage these applications via managed services that can be delivered either on site or via the cloud, said George Fischer, executive vice president for worldwide sales and services.

As part of that effort, CA Technologies is experimenting with a program under which managed service providers will be able to make use of a CA Technologies Enterprise Class Services brand.

While CA Technologies currently has thousands of channel partners, only about 200 of them are participating in the top tiers of the company's channel program. The company isn't looking to expand its base as partners as much as it is trying to be more effective in terms of working with the partners it has.

CA Technologies will continue to focus its primary sales efforts on named accounts, while working more collaboratively with partners to target customers that have roughly $2 billion in revenue. The rest of the market will be left strictly to the channel.

That commitment to the channel now reaches to the highest level of the company.

"We need to be careful about how the direct-sales model is applied and make sure the rule of engagement are crystal clear," says CA Technologies CEO Mike Gregiore. "The problem we had as a company is that we've applied the same sales process regardless of the size of the actual customer."

To back that up, David Bradley, senior vice president for global partners at CA Technologies, said the company is putting in place a process that requires multiple executives to sign off on taking a deal direct, while also making sure that compensation for internal salespeople is now channel-neutral.

"There will be a fair amount of inspection," said Bradley. "Creating any kind of exception will require multiple approvals."

According to Andy Banks, vice president of the data center practice for the global distributor Westcon Group, while channel conflict will never go away completely, it's important to have a framework for managing it.

"It really all boils down to deal registration," Banks said. "You have to make sure what deals are in or out of bounds."

CA Technologies said the primary focus of its immediate efforts is to get existing customers to upgrade products that in many cases have not been touched in years. To that end, CA Technologies is offering customers a free analysis of what CA Technologies products they are using versus those sitting on the proverbial shelf.

"A lot of our products are old-in-the-tooth," Gregiore said. "Getting customers off of old products is going to be a big job for us."

Part of the plan for accomplishing that goal, Gregiore said, is broadening the application portfolio to deliver software as a service (SaaS) applications that are specifically aimed at application development and management and mobile computing.

"If we don't do this now, then over the next several years our relevance is going to be muted," Gregiore said.

Other areas that Gregiore said need to be improved include marketing, better sharing of intellectual property with partners when it comes to delivering IT services, improved joint planning with partners and product management, which Gregiore pledged to improve by making additional investments and realigning personnel.

"We're going to elevate the position of the general manager to be really responsible for product management," Gregiore said.

Despite CA Technologies' latest announcement on the acquisitions of Nolio and Layer 7 Technologies and the striking of an alliance with SAP in mobile computing, from here on out, the company will focus a lot more on organic engineering, Gregiore said. The company will make better use of the talents of some 6,000 people engineering products that CA Technologies spends $600 million a year on developing.

Rather than working on theoretical science, Gregiore said those engineering teams will be embracing Agile development methodologies that will deliver on the promise of SaaS applications by delivering new updates every quarter.

And to sweeten the pot for partners participating in the company's channel program, CA Technologies is now offering an additional 5 percent rebate on all net new business.

"We don't want to compete with our channel partners," Gregiore said. "We want to grow profitably together in a balanced way."