Who’d be a vendor’s channel chief? Wedged between external partners and the internal sales team, and tasked with building long-term relationships while satisfying quarterly sales targets, the channel manager is often one of the more thankless roles within the vendor space.
The channel is rife with stories of channel chiefs getting into shouting matches with sales managers, but then undermining channel partners to appease them. And of course, every partner wants favourable treatment, too. With such a potentially conflicted agenda, what does it take to be an exceptional channel chief?
John Donovan was, until recently, one the Australian channel’s most high-profile channel managers. He spent much of his career managing channel programs at vendors including Symantec, Novell and VMware, before recently departing the virtualisation vendor to step back into general management by bringing digital identity specialist ForgeRock to Australia. Donovan says the first challenge for a channel manager is to find the appropriate balance between the needs of the partner community and the vision of the vendor.
“Sometimes, they are really nicely aligned,” Donovan says. “But often, there are bits on the edge that aren’t quite aligned, and cause a bit of friction or angst. It’s the smaller stuff that sometimes blows out of proportion.”
What might seem a minor issue for the vendor – such as a single deal that helps a salesperson reach their target – can become a very big deal when it sees a partner undercut or pushed out. Donovan says it is almost always the partner that suffers. “I’m yet to see an organisation where the lead of the partner segment has the ability to override someone who leads the enterprise sales division. They are always going to defer on the side of getting the deal and making it up to the partner somehow afterwards.”
Inevitably, that role of peacemaker falls to the channel chief.
Channel entrepreneur Scott Frew’s track record includes building up two major distributors, including LAN Systems, which was sold to Westcon, and Distribution Central, which he co-founded. His successes have been closely intertwined with the channel strategies of many major vendors. He agrees the channel chief is often too far down the corporate pecking order to be influential – but not always.
“Some outstanding channel chiefs will stand up and fight the battle,” Frew says. “If they have a reasonably experienced chief executive and a board that understands channels, the fight is not so hard. Some people walk away from deals because they were not going to break the ethical chain.”
Phil Cameron spent more than 20 years in channel and sales roles at Toshiba, CA and most recently IBM, before jumping to the channel side as Westcon’s director of vendor alliances. Cameron says the fundamental starting point is knowing when an organisation goes direct, and when it uses a channel partner – and making sure everyone else knows it, too. “It all starts with the rules of engagement, otherwise you’ll continue to kick each other in the shins. You’ve then got to articulate and communicate that strategy to the sales force. If you’ve got good rules and compliance and controls around it, then you are going to significantly reduce conflict.”
Hard slog
But even when the rules of engagement are set, some vendors just can’t help themselves from muscling in on a partner’s territory. Many have entered Australia through a distribution partner and resellers and then grown large enough to build an enterprise sales team or create a professional services team. Both can prove poisonous to channel relationships.
It is a situation that Phil Cameron’s old IBM channel colleague, Leo Lynch, is keen to avoid in his role as director of channel sales at Huawei Enterprise. From his 26 years in the channel, Lynch says the critical factor is understanding that channel selling represents long-term strategic selling, rather than a tactical opportunity.
“A good channel manager is someone who realises it is a strategic sale, and that you are not going to get all 100 percent of the business. It is not about winning or losing. It is about that share of wallet, and it’s gradual. And you’ve got to make yourself strategic.”
The hardest slog is often faced by channel chiefs working inside vendors with a strong direct heritage. Resellers are once bitten, twice shy. It takes a lot of work to build up the trust that a newfound love for the channel is not just lip service. Dell, for instance, is working hard to convince resellers it really is a channel-friendly vendor now, including appointing Ingram Micro Australia as its first-ever enterprise distie, and hiring channel strategy expert Geoff Wright as its channel chief.
Patricia Nance says that when she took a role managing alliances and channels at Oracle in 2010, the vendor was definitely not ‘channel-friendly’. Resellers were “extremely sceptical”, Nance says. “They’d been burned a lot. They were used to seeing deals being ripped out from under them, and they were undermined all the time.”
When Nance joined Oracle, its channel contributed around 18 percent of revenue in ANZ. By the time she parted ways with the vendor in August this year, it had grown to approximately 37 percent. She says her approach was to establish the right relationships at the right levels inside Oracle. “You’ve really got to have all the relationships happening at senior executive level on both sides of the fence, so people can pick up the phone and talk about what might not be going so well and get it resolved quickly.”
That often meant pulling sales reps aside for a good talking to, and occasionally led to the stripping of commissions. “You have to be pretty strong and gutsy to deal in that space and stand up for your partners, for yourself, and for your team, and do that in front of everybody,” Nance says. “And to do that you have to have the knowledge to back it up.” That knowledge was the research that Nance undertook to confirm whether salespeople were better off working with the channel. “People found they had more opportunities by working with the channel, because there were relationships they could or did not have, and knowledge about accounts they did not have, that they could then take advantage of,” Nance says.
Channel Dynamics’ co-founder Moheb Moses, says seniority and experience are essential qualities. “A channel chief is the person setting the strategy. They need to report to the managing director. Channel is a go-to-market strategy. It affects not just the direct sales organisation, it also affects marketing, operations, finance, and all those things. It is an internal educational role as well.”
That’s a lot to take on, which is why one of Moses’ key recommendations is that channel chiefs should have bona fide channel experience on their CV. “There are a number of vendors in recent times who have appointed channel chiefs who don’t have a channel background – it doesn’t work.”
A channel chief’s KPIs should be much broader than just a sales target. These might include the recruitment of new partners or enablement of existing ones, partner satisfaction levels, and attainment of technical skills and certifications, Moses says.
Next: Brennan boss talks best practice
Brennan IT founder Dave Stevens says channel chiefs need empathy for the reseller. “The best channel chiefs tend to have an approach where they say, ‘If your client experiences these sorts of problems, then we have this solution here to fix it’. Whereas the majority of them say, ‘We want you to sell 400 units of this, and we don’t really give a damn whether the client needs it or not’, because they are the sales and marketing branch office of a US company, generally.”
One of Stevens’ bugbears is channel programs that incentivise individuals within reseller organisations with prizes for sales volume. “That’s just hijacking our sales teams. The channel chiefs who support that kind of behaviour are really the least likely that we want to engage with.”
A good channel chief must be able to communicate changes in strategy quickly and effectively. Few have had as many opportunities to hone their diplomacy skills as Phil Goldie, Microsoft’s director of partner business and development. We have seen Microsoft enter the tablet and notebook market, develop a cloud strategy that has ripped significant revenue away from traditional reseller business models, abolish a significant revenue bump by giving away Windows 10 free of charge, and most recently open a direct flagship store in Sydney.
“A lot of the traditional business models that our partner ecosystem has participated in for decades are changing quite fast,” Goldie says.
“The thing that we’ve learned is number one, try and be consistent and simple in what we talk about. What doesn’t work well is when the message is overly complex. Not to say we’ve [always] got that right by any means, but we are learning.”
For Goldie, that has meant going beyond the traditional roles of the channel chief to look at ways of retooling partners to adjust to annuity revenue and look at building services on top of Office 365. “If you look at a lot of the training that we now do, it is actually very heavily anchored in business rather than the technology. We still have to do both, but it is the business thing that we invest probably more money in than we have ever done before.”
BREAKOUT: REVOLVING DOORS
Consistency is important to partner principals, usually business owners who are in it for the long haul. It is a challenge when the channel chief, a reseller’s main conduit into the vendor, moves on, but move on they often do. The channel chief role is one that sees regular changing of the guard. We round up some of the most significant movements over the past 18 months.
Apr 2014: Chris Spence, HP
Chris Spence ended a seven-year tenure with HP when he exited in 2014. He had worked in reseller land before HP, where he moved his way up to general manager of channel, South Pacific. He then moved back into the channel with a role at major HP distributor, Dicker Data, and was replaced at HP by Kaaren Lewis. Spence has since joined Adobe as senior executive, strategic accounts.
Dec 2014: Phil Cameron, IBM
Phil Cameron was the first of IBM’s two senior channel personnel to depart Big Blue in quick succession. He left IBM after four years and joined Westcon as director of vendor alliances ANZ in January 2015. Cameron, like another senior channel figure, John Donovan, had mixed channel chief roles with C-level management, having spent almost five years as ANZ managing director for Lenovo.
Jan 2015: Leo Lynch, IBM
IBM’s distribution boss, Leo Lynch, followed Phil Cameron out the door to be director of channel sales for Huawei, a vendor on a rapid growth trajectory in enterprise reseller sales. Lynch’s track record included channel roles at EMC, as well as almost a decade at HP.
Jun 2015: Patricia Nance, Oracle
Oracle alliances and channels vice president Patricia Nance parted way with the vendor after more than five years with the vendor, most of them in channel roles. During her tenure, Oracle ramped up its messaging around the channel, including an announcement that it would shift “thousands” of direct accounts to its partners.
Jul 2015: Klasie Holtzhausen, Symantec/Veritas
Klasie Holtzhausen had been with the security and information management vendor for two years before his departure in July 2015. In his time at Symantec, the company made a series of channel policy shifts, including announcing a new competency model that was swiftly scotched by the decision to split in two. Holtzhausen is now managing director of Dell Software ANZ.
Oct 2015: John Donovan, VMware
One of the longest-reigning channel chiefs of a tier-one vendor, John Donovan resigned from VMware after five years as director of channel sales. He has since moved on to identity management software vendor ForgeRock as its regional vice president, moving back into C-level management; he had previously spent six years as managing director of Symantec Australia and New Zealand.
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