Nortel Networks is looking to attracted a small group of highly skilled VARs with the launch of its Expert Advantage program.
The carrot, said Oliver Gnass, the director of go to market enterprise data network solutions for Nortel, will be compounded discounts, rebates and accrued marketing
Gnass, the former channel manager of Bay Networks, said if a business partner meets all of the Expert Advantage programs requirements they could net a total of 13.5 per cent extra margin on top of the margin they make selling the equipment.
“”We recognize that business partners today have started to develop specialized skills and are building best practices inside their companies,”” said Gnass, the architect of this new plan.
The Expert Advantage plan will be a part of Nortel’s overall Partner Advantage program and is aimed at resellers who specialize in security, wireless LANs and Ethernet switching for campuses. The company is only looking to recruit about 15 VARs for the entire country.
Gnass called this program “”bold”” because it moves the networking provider from a volume-based system to a value-based model.
Rob Finucan, president and CEO of Combat Networks Inc., an Ottawa-based network integrator, said the Expert Advantage program would be very important to his business. “”For us the recognition of value over volume will help smaller integrators. It will give us the ability to compete on value instead of how many truck loads of equipment with next to no margin we can move,”” Finucan said.
Albert Daoust, networking analyst for Evans Research Corp., said the program is well thought out.
“”It has nice discounts and lets hope they have some success with it. They understand they have to have a rich program because they have a tough slog ahead,”” Daoust said.
The Expert Advantage program will encompass Nortel products such as Contivity and Alteon switches, the Passport 8000 and 1000 and the BayStack line.
The discounts work this way:
- Expert discount includes two per cent discount in addition to Partner Advantage volume discount;
- Expert funds give partners another two per cent marketing fund accrued quarterly. This can be used for training, demo units, and lead and demand generation efforts.
- Expert performance rebate is the final piece and that rewards partners by up to 9.5 per cent on a quarterly, mid-year and annual basis.
Also part of the mix will be lab discounts.
For the future, Gnass is entertaining SIP related products and an SMB market component, but he adds those are in the early stages of discussion.
Finucan, who has been a Nortel partner for more than three-years, acknowledges Nortel has a huge challenge ahead of them battling Cisco in the market place. “”Nortel is the No. 2 player and everyone knows this. To peck away at Cisco’s position you need world class products and you need quality feet on the street and given Nortel’s situation with head count reduction this is an important time for Nortel’s channel to step up,”” he said.
Daoust agrees adding that Nortel’s VAR channel is very good, but they need people who understand the market. “”They have decided they are not a Compaq or an HP with 2,000 resellers and it is realistic,”” Daoust said.
In no way, Gnass said, was the Expert program a response to chief rival Cisco’s partner profitability program. “”We began this pilot before they revamped the Cisco plan. Expert takes the requirements with value and the financials together for a simpler framework. I like the KISS rule and it’ll be prevalent through this program,”” he said.
The program is non-exclusive. “”That is a hard goal in any business and certainly to lock down the very best will be hard to do. They have to run a balanced business. We’ll ask, but that is a tough goal,”” he said.