The VAR Guy

Magento (formerly known as Varien), the company behind an open source ecommerce platform aptly named Magento, relaunched their Solution Partner Program in April 2009. And in last year’s Open Source  50 report, Magento was listed in the “Best of the Rest” section based on limited information and feedback from solution partners about the partner program. Fast forward to the present, and the company is showing some partner momentum. Magento’s story offers some important lessons for other open source partner programs. Here’s why.

The predominant benefit in 2009 from cloud computing was access to less expensive computing power and availability of more SaaS based solutions. But how will solutions providers make money from cloud and SaaS offerings in 2010? Here are some clues.

As some open source vendors gain ground and continue to move upstream, a battle is intensifying. Some proprietary solutions are beginning to feel the pressure and responding, as you might expect, with FUD (fear, uncertainty, and doubt) tactics, much of which may have been applicable a year ago but today doesn’t accurately reflect how far open source has come.

Everyday there’s a new story about cloud computing and it is an increasing challenge to understand how all of the pieces fit together and how one actually leverages it in a practical and meaningful way. MSPmentor’s recent Cloud Computing Explained in Four Paragraphs did a great job simplifying and explaining cloud computing. But there are some deeper angles VARs need to explore. Here they are.

In January 2009 I wrote my first blog here: “Open Source Channels: Critical But Different.” My goal was to  explore, question, and understand how open source is changing the world of partner programs and channels as we know it today. I posed more questions than I had answers to so I thought it would be interesting to look back and see if the picture is any clearer.

In my previous blog entries (Part I and Part II),  I discussed our need at Magento (an open source ecommerce specialist) to create meaningful distinction between partner levels that would ultimately drive value for partners, customers and Magento. Now, let’s take a closer look at the effort.

In my previous post, I described Magento’s new partner program in an effort to provide a behind the scenes perspective into some of the challenges we faced and insight into what we were hoping to accomplish with the changes. I discussed the need to create meaningful distinction between the partner levels that ultimately drives value for partners, customers and Magento. But there were other needs that we needed to address.

Two weeks ago, Magento made some major announcements related to a new, enterprise-focused product and a new partner program. Full disclosure: I have been involved in the formation, and launch of Magento’s new partner program. Now that it is launched and we are transitioning existing partners and recruiting new ones, I thought it would be interesting and insightful to provide a behind-the-scenes view into the challenges we faced and why a new partner program was critical to our future success.

I’ve been reading recent announcements about the Open Source Channel Alliance and trying to figure out what it is really about. Sure it makes for good marketing but is there tangible value being delivered and is it a sustainable business model for open source today?

A friend recently predicted to me that the traditional outside field-based sales rep role would be dead in five years. That’s hard for me to grasp, especially since I have worked with so many talented sales reps over the years. They were the lifeblood of most every major software company. But will they be irrelevant sometime in the near future?

You know how little things happen all around you and you’re not really sure what it all means or how/if they are connected?  And then one day the pieces all fall together and you have that OMG moment? That happened to me when reading about the MIX09 conference. I suddenly realize that Microsoft is finding ways to make closed source and open source live in harmony. Here’s how.

In today’s economy companies often cutback and retrench in order to weather the storm. However this is actually a great time to make smart strategic investments that strengthen your current operations and propel you forward when the economy recovers. Investing in international partners is one smart way to expand outside your current base. Here’ how.

Last week we examined key qualities solution providers should consider when evaluating potential software partners. The source of this information came straight from three top system integrators who focus on developing and implementing open source solutions for their customers. Now, if you’re a software vendor that is going to market through partners but derives some revenue from services , make sure you…

I’ve seen my share of  ill conceived and  ineffective partner programs and I’ve often wondered why that is the case. As discussed a few weeks ago in “The Secret to A Successful Partner Program,” one of the basic elements of any successful partnership is creating a win-win relationship. But how do you know what is most important to a partner, how they decide who is strategic and who isn’t, and what they need from software vendors to be successful?

When I read The VAR Guy’s recent blog about Zoho’s growing SaaS partner program, it got me thinking: Do solutions providers whose livelihood is centered around developing and delivering business solutions to their customers, really believe that SaaS (software as a service) partner programs are good for their businesses?

You’ve signed some new partners. The ink hasn’t dried yet when management starts asking “where’s the revenue?” You try to set expectations, but everyone wants revenue sooner. In most cases it takes longer to get the revenue engine started with partners. What you really need is that first “win” to launch and legitimize the relationship for both companies. So what can you do to accelerate the process?

Let’s face it: The only real reason for having partners is to drive greater amounts of revenue less expensively that doing it yourself. So why are so many channel partner programs generating mediocre results? You can certainly blame your partners’ inability to execute. But here are the three key issues you really need to address.

Looking at most partner programs, you often see a matrix listing all of the “benefits” of partnering — neatly segmented into Gold, Silver & Bronze levels. While this looks nice on the website, the basic elements that ensure a valuable, productive, and mutually beneficial partnership are often overlooked. Here’s how channel chiefs and technology companies can correct that problem.

During the recession — as direct sales teams work overtime to close deals — I am sure many high-tech companies have asked themselves: “Why have channel partners?” While it is a valid question that elicits lots of healthy debate, there is really only one right answer – it’s the revenue. This may be obvious to some, but when you look closely at many partner programs — especially open source partner programs — it is sometimes difficult to determine how partner initiatives drive revenue for the company.

Now that we’ve launched The Open Source 50, I’ll help readers to explore, question, and understand how open source is changing the world of partner programs and channels as we know it today — and most importantly how we all adapt and continue to grow. What made a good partner program before may not make sense in the open source world and the drivers or reasons why companies partner may now be very different. Here’s why.