Novell is shaking up its channel strategy in Europe. The VAR Guy reached out to Novell Chief Marketing Officer (and Channel Chief) John Dragoon for his thoughts. Here’s what Dragoon had to say.
First, a little background. Recent reports suggest that Novell has cut some of its European distributors even as it seeks additional channel partners. The news surfaced after Novell announced mixed financial results in August 2009.
Channel Chatter
Now, The VAR Guy’s Q&A with Dragoon…
The VAR Guy: Has NOVL cut the number of channel partners it has in Europe? If so, why and by how much?
Dragoon: We distinguish between “channel partners” and pure distributors. Novell has in fact rationalized distribution in several key markets – roughly 15-25%. This is a result of the fact that:
a) We were over distributed in many markets due to a series of acquisitions that Novell has made over the past few years, each of which has added more distributors to our fold;
b) we are focused on quality vs. quantity. We are working with true value added distributors who are willing to invest in developing a competency and practice to support Novell’s solutions; and
c) the retained value added distributors have made a commitment to help Novell recruit and enable new resellers who can best support our Datacenter, Identity & Security and End User Computing solutions.
The VAR Guy: Has NOVL made any channel partner cuts in North America, elsewhere? If so, why and by how much?
Dragoon: Distribution in the Americas has been consistent year over year with the exception of adding Avnet as a Value Added Distributor. We have 5 relationships with Major Distributors in the Americas. (ATG/Arrow, Avnet, Tech Data, Synnex and Ingram).
In the Americas, our number of Solution Provider / VAR relationships has remained constant although the mix has changed to reflect our new specializations and emphasis on quality vs quantity. We have successfully recruited a large number of new partners whose core competencies are more aligned with our strategy and solutions offerings while some partners who are no longer aligned to our business model are no longer with us. Our new partners are more capable of selling and providing services around solutions and are aggressively participating in our new profitability programs like Deal Registration.
The VAR Guy: What types of NOVL partners are doing best right now? In other words, what lessons can average or under-performing partners learn from your best partners right now?
Dragoon: Partners that are recognizing growth and increased profitability with Novell are those that have committed to jointly develop and execute on a business plan with Novell. We use a business planning process and cadence to drive clarity and focus around our objectives and market opportunities and to ensure consistent execution in the marketplace. We also assign discrete coverage for our top partners and ask those partners to reciprocate with a dedicated vendor manager to support Novell’s business. Novell is investing heavily in our channel through partner programs, incentives and enablement.
Most notably, partners who invest in and have taken 3 consecutive quarters of education and training dramatically (more than 3 to one in revenue) outperform those partners who have only trained 1 quarter or less with us this year. The lesson: a commitment in skills and training pays off.
Parting Thoughts: BrainShare and Competitors
Although The VAR Guy didn’t bring it up, Novell plans to relaunch BrainShare conferences in 2010. The events, to be held in North America and EMEA, will seek to further educate thousands of Novell customers and partners.
In the meantime, Novell continues to face intense competition. Red Hat last week (Sept. 23, 2009) released strong quarterly financial results. And Canonical, an upstart of sorts, will seek to gain server and cloud momentum with Ubuntu Server Edition 9.10’s launch in late October 2009.
Follow The VAR Guy via RSS; Facebook; Identi.ca; Twitter; and via his Newsletter; Webcasts and Resource Center.
Read More About This Topic
Share This Post
Tags: Linux Channel | Novell Channel Chief | Novell Chief Marketing Officer John Dragoon | Novell Europe | Novell Partner Program
Interact: Add a Comment | Trackback Link | Permalink
Subscribe: RSS Feed
You might have asked Mr. Dragoon what he thought about the Microsoft – Novell “non-aggression and cooperation pact” they signed in November 2006. He was instrumental in crafting the agreement. This is the 3rd anniversary of the agreement with two more years to go.
I recently complained to Dr. Jaffee, Novell’s CIO, that Novell had not done enough to get Microsoft to cooperate on the Mono project, which is an open source platform for running .NET applications. Dr. Jaffee responded that he talks about it with Microsoft but progress has been less than he would have liked to see. Apparently, cooperation comes in degrees and sometimes only grudgingly. What happened to making it work for their mutual customers? Wasn’t that the point?
As for BrainShare 2010, I haven’t really heard anything about it yet, but I think the days of the big BrainShare conference in Salt Lake City are over. I think Novell should be pursuing virtual conferences and smaller regional customer and partner education events that capture some of the BrainShare flavor. I’ve been to 3 BrainShare conferences in Salt Lake City over the years and they are a lot of fun to attend, but with the lost billing revenue, travel, hotel and conference fee it can cost a VAR over $5K to attend. And in our depressed and deflationary economy, $5K may be pretty hard to come up with for a lot of VARs.
With regard to partner education, I think Novell is attacking it somewhat successfully with a number of free ATT Online training events (half day and full day) for reseller partners. More of these are needed. Again, who can afford to send someone to a Novell Authorized Education partner to attend a week-long training event? The costs are just as significant as attending BrainShare in terms of lost billing revenue, travel, hotel and course fees. Cheaper and just as effective methods are available. Novell knows how to use them and should expand on their delivery to reseller partners.
Tim: The VAR Guy is reading your comment closely, and promises to follow-up with John Dragoon on your inquiries/points. Thanks for the constructive criticism and feedback.
As a long time Novell Partner and also a Microsoft and VMware partner. I can say that the PArtner program from Novell is the best of all 3.
We have the highest level of investment in training our staff (according to Novell figures for how many staff we send on training) and this results in our staff being more expert in the relevant product and solution sets.
Novell provides both online live, online recorded/self paced and in person training, and thought the cost of the training in person means potential lost billing revenue and expenses, it is part of our investment into our staff.
You can’t always expect your staff to psend time in their own time learning – you need to provide both.
I am glad that BrainShare is returning, the technical training, networking with peers and meeting the vendors all in one place in a week is ideal. I will be attending BrainShare USA in Salt Lake City and some of my staff will be there as well. The others will attend the Europe Brainshare.
I think Novell is definately moving in the right direction and maybe sometimes we feel it could be quicker, but there are good reasons for the time it takes. The current Novell Management is the best in a long time.
The products are pretty much the best in the industry and there are a lot of people with the ‘Novell – I thought they weren’t around anymore’ attitude – they need to wake up and look at what Novell is doing, they will find it is a bit like Apple with the iPhone – a really cool solution that you would never have got if Microsoft was in total control.
I for one, believe the IT industry has got companies that really innovate nowadays, these have been missing for almost 15 years.
Nitesh, Thanks for such a complete comment. Novell’s business strategy certainly attracts some strong opinions on this site. Please keep The VAR Guy posted as you head out to BrainShare.
I still think they need a 1-800-I-am-going-to-switch-my-Novell-customer-to-Microsoft-unless-I-can-get-a-better-margin, especially for the SMB reseller who refuses to generate leads for Novell’s online retailers.
We were big into Novell back in the hot and heavy days when Microsoft didn’t have an Enterprise operating system and Novell Netware 3 and 4 and 5 had a decent margin. But then Microsoft came out with Windows 2000 Server, Novell started pushing their online retailers and SMB VAR/Resellers began migrating their customers to Microsoft for better software margins, and protection from annoying time-wasting calls from larger software retailers that their endusers started getting. We are not happy just to get the integration business, we want the software business too, but the online retailers could sell it to the customer at a lower price than I could get from Ingram, as a reseller.
If my Novell customer calls me and tells me that a large software retailer called wanting to find out how many nodes of Novell Netware/Groupwise they had so they could send a lowball price quote to my customer, I had no choice but to launch into my Microsoft spiel. I am going to get the software business, whether Novell wants their business to go through their online retailers or not. They needed a way to help their small VARs maintain their existing Novell business, and generate new business. They didn’t need their small VARs to spend the last decade migrating their customers off of Novell, due to lack of margin. As a result the landscape has changed dramatically in the SMB market and I rarely see Novell anymore in the SMB space.
HurdyGurdy: The VAR Guy spotted a report earlier this week confirming that Novell’s sales into SMB were shrinking. Very surprised the company hasn’t promoted some sort of SMB stack/LAMP stack on small business server appliances…
[...] channel is said to be broken, but the Var Guy listens to Novell’s chief marketing guy, who defends the channel nonetheless. The VAR Guy: Has NOVL made any channel partner cuts in North [...]
VAR Guy: Their strategy over the last decade has been to shed their smaller resellers, particularly Gold and Silver. They have a total lack of sympathy for the small VAR’s lack of margin, despite the outpouring of complaints. This may be due to a lack of bandwidth to deal with small VARs and their puny opportunities, combined with the misconception that their Novell business from these VARs are being sucked up by their preferred online retailer’s aggressive pricing, anyway. So what has happened, instead, is that these small VARs have moved on to something else, and focused on migrating their customers off of Novell as they have no desire to lose business to Novell’s online retailers. When you add up puny opportunities, they easily exceed a quarter of a million dollars in sales, as I have found. Small VARs are going to keep their business and not turn it over to the online boxpushers and their time-wasting strategy of bombarding the endusers with calls for the quick sale. Believe it or not, the majority of endusers are looking for value not cheap pricing.