CA Develops New Partner Focus, Initiatives As Cloud Computing Reshapes Its BusinessNovember 20, 2011
CA Technologies is overhauling its partner program as the company expands into cloud management software and targets prospective midmarket customers it has largely ignored until now.
Problem is, CA historically has had a less-than-stellar reputation as a channel-friendly company. But partners attending the CA World conference in Las Vegas this week seem impressed by what they have seen so far…
"We’re making a pretty big bet with CA right now on their strategy and their vision," said John Ross, CTO at GreenPages Technology Solutions, a Kittery, Maine-based solution provider that joined the vendor’s partner program in February.
Up to 85 percent of CA’s sales today are to Fortune 1000 companies. And of the company’s $4.4 billion sales in fiscal 2011, some $2.5 billion was mainframe management and related software.
But at CA World company executives made it clear that’s all going to change.
CA has spent some $2 billion in the last two years acquiring a number of cloud computing management software developers, including Nimsoft, Interactive TKO (ITKO), 3Tera, Arcot Systems, and Oblicore. And the company’s ability to offer an end-to-end cloud management system is an attractive proposition for solution providers
"As this IT, cloud service consumption model changes, our ability to consult with our clients and help them build a transformation model for delivering and consuming their own IT services is critical to the private cloud. And we have partnered with CA to really provide that cloud [management] stack for us," said Mike Martin, vice president of cloud solutions at Logicalis, which began working with CA a year ago. "It’s a really integrated platform."
Also fueling CA’s channel initiative is the changing demographics of its customer base. Adoption of cloud computing and Software-as-a-Service is catching on more quickly among mid-size companies — defined by CA as those with annual sales between $200 million and $2 billion — and that adds up to between 7,000 and 14,000 tech-savvy, midmarket companies with significant IT budgets the vendor is currently not reaching, said George Fischer, executive vice president and group executive, in comments during a channel partner session on Sunday at CA World.
And CA understands that it will need the channel to reach those customers.
"Going forward, the channel is a very important part of what we are doing," CEO Bill McCracken said in a press conference at the show Tuesday, echoing comments he made at the earlier partner session and in his keynote speech Sunday.
"We’re doing this because of the transition that’s happening in those midmarket accounts with respect to cloud and SaaS. It’s a big, open opportunity for us and there’s significant demand for our products there," he said. And because those mid-market customers are largely serviced by solution providers, systems integrators and — increasingly — managed service providers, the channel plays a major role in CA’s strategy, the CEO said.
Until recently CA did not have a unified channel program, instead organizing channel initiatives along product lines and business units. Partners focused on reselling the vendor’s commercial products, such as the ARCserve backup and recovery software and the ERwin data modeling line of tools, through a two-tier distribution process.
Still, CA’s worldwide channel sales have been in the range of $500 million, said David Bradley, senior vice president of global channel sales, in an interview. "It’s a reasonably well-kept secret how much business we do with partners today."
Solution providers are evolving, focusing less on implementing IT infrastructure and more on providing services, Bradley said. Throughout CA World company executives put a great deal of emphasis on managed services — either recruiting managed service providers to join CA’s partner ranks or helping current partners evolve to add more services to their offerings.
"As we talk about growing our market share in the midmarket, whether that’s through an on-premise model or through a managed service-provider model, our intent is to do that predominantly through partners," Bradley said.
McCracken, in his speech to partners, said channels sales could eventually account for 30 or 40 percent of CA’s revenue: Bradley said it could even exceed 50 percent within a few years.
Reflecting CA’s new go-to-market approach is a complete overhaul of the company’s channel partner program that’s slated to launch April 1, 2012, the start of the company’s fiscal year.
The program will eliminate the current Silver, Gold and Platinum tiers, replacing them with "Advanced" and "Premier" tiers for top partners. Tier placement, currently based almost solely on meeting sales goals, will also include partner certifications in product competencies and meeting goals laid out in business plans. One goal will be to reward partner investments in developing new business service capabilities, Bradley said.
The new program will have a simpler structure, letting partners combine revenue from one-time sales and recurring revenue from services to count toward program benefits. And Bradley promised "contract flexibility" for both "sell-to" and "sell-through" initiatives and "major overhauls" to pricing models and quoting systems.
The company is beta testing a new partner relationship management system based on Salesforce.com applications. The partner portal is being rebuilt – including adding a deal registration system and rules of engagement to avoid channel conflict. And some channel partners are already using the new Partner Opportunity Platform to retrieve demand-generation materials and other marketing content.
"I like what I’m hearing," said Mike Ragusa, director of enterprise sales at ePlus Technology, a Hauppauge, N.Y.-based solution provider. Speaking outside of the partner session, Ragusa said ePlus is doing more work with cloud computing systems from Cisco (NSDQ:CSCO), EMC (NYSE:EMC) and VMware, "and we could use CA management tools to add value there. They’re on the right track."
CA has a ways to go, however. In a session called the "Partner Deep Dive," BJ Schaknowski, vice president of global solution provider sales, acknowledged that development of the competency certification system is only in its early stages, for example.
"I didn’t think there was enough detail," said Ross at GreenPages. While the solution provider has sold ARCserve, Erwin and other products, GreenPages generally stayed away from partnering with CA’s enterprise operations (where the cloud computing products reside) because of past channel conflict problems.
"CA is trying to be a little more flexible right now because they are still trying to convince partners to come back," Ross said. "I can go outside of [CA World] and talk to 10 partners and nine of them will say they will never work with CA again because of past experiences. I was one of those people a year ago."
But GreenPages is buying into the new CA vision. The solution provider has already invested "six figures" in its CA-related business (which launches next month), including software purchases, marketing programs, and sales and technical training. GreenPages plans on working with a broad swath of CA products, including the CA Automation Suite for Clouds, CA APM, CA Spectrum, ITKO Lisa, and others.
Ross also has praise for Bradley, other CA channel managers, and the channel support organization. "These are channel pros. They get it, they understand it, and they know what’s going on," he said.
"Our partnership with CA has been very refreshing," said Martin at Logicalis, citing as an example a series of workshops CA offered the solution provider to help it go to market with CA products without channel conflict. CA’s embrace of the channel, he said, is not just lip service. "I have not gotten this level of support from any other vendor that we’ve worked with.
"Part of it, I think, is CA is really recognizing they are at an inflection point in their business [and] they basically need to grab some market share. And they are really putting their best foot forward," Martin said.
"CA has really turned the corner," Ross agreed. "It’s just blown our expectations away, going above and beyond, with what they’re willing to do and how far they’re willing to work with the channel."