SALT LAKE CITY —Novell promised some significant changes to its channel structure at its BrainShare conference this week, including a central organization to deal with all channel relationships and a focus on solution rather than point

product selling.

The news came from Novell’s second in command, vice-chairman Chris Stone, who has only been back at the company for a matter of weeks after a three-year absence. Stone was scant on details about revamped channel relationships — a formal change will be introduced in about two weeks — but he said that a switch to solutions selling will also change product pricing and licencing agreements. NetWare, for example, will be provided to resellers for free so they can sell products and services on top of the platform.

Microsoft has been giving away NT to push its leadership position over Novell’s NetWare, said Stone. “Well, damn it, we’re going to do the same thing.

“One on the interesting things we learned from Microsoft is their aggressive tactics. It’s time we took on the same tactics,” he said — a comment that drew cheers and applause from BrainShare attendees during his Monday morning keynote address. Stone subbed in for CEO Jack Messman, who was unable to attend BrainShare this year due to illness.

Novell set the wheels in motion for a change in channel structure last November with its Clear Channel program, then more recently with PartnerNet 2002, where it re-introduced certification requirements for partners and eliminated its minimum licence sales structure.

Upcoming changes won’t be radical, said worldwide director of channel marketing Ladd Timpson, but moving channel relationships under one roof will allow Novell to enjoy some economies of scale and extend some benefits to its entire partnership network. “We’re finalizing all the rules of engagement so that we treat our channel in a like manner across all sales districts,” he said.

Ladd wouldn’t specify how product licensing and pricing will be re-organized, but said, “I don’t think it’ll be very long before some initial things happen.”

Jennifer May, an enterprise services specialist with Toronto-based Tenet Computer Group, welcomes the evolution of Novell’s VAR relationships. Tenet is a member of Novell’s platinum partner council and helped to define PartnerNet 2002. The company also deployed Novell products to the City of Brampton last year.

May said she typically deals with one person at Novell already, but a more centralized reseller structure will be most beneficial to partners new to Novell.

“Right now there’s a lot of people within the company you have to deal with. Now they’re (Novell) really defining the relationship, which will help (resellers) that are starting out.”

The switch to a solutions focus may be beneficial to resellers since it allows them to get beyond selling IT solutions and into selling business solutions, she said. “Products will go beyond IT (and) span the line of business managers. . . . Once you sell to a line of managers, you’ve got it made.”

The central channel arrangement will also extend to system integrator partners, including Novell’s own consulting company Cambridge Technology Partners. But while Novell has introduced a number of programs for its reseller base, CTP has maintained status quo. The CTP acquisition was announced just weeks before

BrainShare 2001 kicked off, but wasn’t shareholder-approved until July. Integration of the two companies is still in mid-stream, according to Brendan McLaughlin, vice-president of supplier solutions, who moved from CTP to Novell after the buyout. Not to upset the apple cart, CTP has worked to maintain its prior customer relationships and bring verticals like financial services and manufacturing into Novell’s fold. The company has also brought with it a long-standing relationship with portal and application server company BEA: through an agreement the companies will jointly deliver secure portal solutions. Novell has been slowing training CTP’s sales force on its own key products like iChain and eDirectory, added McLauglin. “There’s still a long way to go, but we’re getting there.”

Bob Couture, vice-president of global consulting, joined Novell from IBM Global Services last December to help the integration process. Novell has signed a series of agreements with its integration partners like Cap Gemini Ernst & Young and Deloitte & Touche to clarify CTP’s role within Novell, he said.

“I expect there will continue to be a relationship (with integrators),” he said. “In some cases, we’ll lead and they’ll sub and in other cases they’ll lead and we’ll sub.” But customer engagements will be decided on a case by case basis and if Novell and its integration partners can’t reach an agreement they will compete for the contract. “I think that is perhaps something Novell is uncomfortable with,” said Couture. “CTP certainly isn’t.” Novell has been such a product-focused company, it’s hesitant to put its existing integrator relationships in jeopardy, he said. “But they’ll change. When you get into the system integrator game, these relationships always change.”

BrainShare 2002 continues until Friday.

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