One year into a two-year plan to revamp its partner program from a volume-based model to one stressing value, Nortel Networks promises it will continue to deliver on its outlined plan of record over the next year.
When the Toronto-based networking vendor launched the revamp of its partner program back in 2005, a key consideration was laying-out a two-year plan of record to give partners visibility into the coming changes, and the opportunity to plan their investment with Nortel. Continuing to deliver on that plan is key says David Wilkinson, vice-president, North American channel strategy for Nortel.
“One of the things we heard loud and clear from partners when we began to undertake this change was Nortel had traditionally done a poor job of having a predictable roadmap for the partner program,” said Wilkinson.
A key thrust behind the revamp has been to move to a value-based program, and that’s reflected in the way Nortel is handling its new specializations. To qualify, partners will need to demonstrate a mix of technical and practical competencies says John Stasick, director of channel management and development for Nortel Networks.
In its plan of record, Nortel committed to launching six to 10 specializations by mid-2008. Specializations in advanced services, unified communications and SMB have already been launched, and Stasick says an advanced data specialization will be launched in 30 to 60 days.
Focusing on products like Nortel’s Passport WAN line of products and its secure routers, as well as applying that data infrastructure to support applications such as VoIP, Stasick says competency requirements for the specialization will include things like certifications, labs and technical gear on the technical side, as well as a certain customer base with certain solutions and customer satisfaction ratings on the practical side.
“We want to make sure a partner that goes after the data networking specialization truly has data as a core piece of their business model,” he said.
Stasick sees this specialization being compelling in Canada, as many of Nortel’s larger partners playing in the advanced data space reside here.
The hope is the specializations will give Nortel partners the opportunity to differentiate themselves in the partner community and to customers, says Wilkinson, adding with the move to a value-model Nortel also recognized it needed to change how it works with its distribution partners. In Canada, that’s Ingram Micro, Tech Data and Westcon.
Each distributor has a different business model, he notes. Some are value-add distributors, others are really broad line differentiating on cost and logistics. Some wanted the ability to target specific sets of resellers with value offerings that would generate payback on investment, and Wilkinson says trying to align that with Nortel’s opportunity and the level of support Nortel wanted to provide itself versus through the distributors was a challenge.
“It’s been a very interesting road trying to balance all that, but the feedback we’re getting from our distribution partners is that its seen as a positive program that allows them to choose where they want to invest,” said Wilkinson.
Launching in March, Wilkinson says Nortel’s new stocking distributor program will provide the distributors more opportunity for differentiation. Partner satisfaction will also become a part of distributor compensation, and distributors will be asked to carry similar competencies to those carried by the partners they’re supporting.
Another key addition is inventory financing. Wilkinson says it’s the first time Nortel has had an inventory financing program. The 60-day interest-free financing will be available to partners when they purchase through a distributor and will be provided by one of two third-parties, IBM and DLL. “We know they’ve got cash-flow as a big variable in their business and they’re looking for creative (solutions).”
The vendor will also be offering purchase-order financing that lets resellers leverage the purchase order and the customer’s credit to obtain third-party financing, so a smaller partner doesn’t need to walk away from a major deal because of financial considerations.
Changes are also coming to deal registration. Net new customers and net new business with existing customers will be a focus, Wilkinson said.