Pushing boxes, or: How many letters do you really get from your VAR?
Category SNAPPS LicensesOver the years, SNAPPS has been primarily a high-end services organization. We started in 1997 as a one-man show, writing commercial and corporate Notes applications. In 1999, we added a bit of hosting (back then it wasn't referred to as cloud computing, not even hosting, one was an ASP - application service provider - a term that fell out of favor a few years later). That has had its ups and downs. But essentially, it's the same idea, plus eleven years. There have been technological innovations and bandwidth improvements year over year that make this model more attractive - for some.
In 2002, before it was cool, we started Giving away Code in Great ways. The idea was to feed into our consulting business. That worked OK, we brought on many enterprise clients based on word of mouth, buzz, and even the occasional movie.
In 2006, we started Collaboration University, which to this day (our 11th and 12th iterations coming in September!) I still believe is a great concept - partners and experts organizing and delivering a focused, small conference on their own. No sponsors, and no intermediaries. And it's a blast.
Two years ago, we got pretty heavily into government business - as subject matter experts, not engineers. While I'm unable to disclose the exact nature of the work, many of you have taken some clues from what I have been able to say here on my blog and at Lotusphere. That has been more fun than I thought it would be, despite the paperwork. And believe me, you think you have paperwork...? I laugh at your paperwork...
Seriously, more than 3,000 US Government solicitations are posted
every WEEK. Check it out. fbo.gov.
But the one thing we at SNAPPS have never done, however, is sell licenses for IBM. Or anyone else, for that matter (except ourselves, with the occasional ISV-esque tools we build). Why, as it seems we quite obviously have all the skills to do so? We understand how it works. A deeply embedded and personal disdain for commoditization is the likely culprit. We know the products, and heck, I've taught (preached, evangelized) a sales session to other partners and IBMers at Lotusphere for six years, poking fun at commoditization every chance I get. But at the same time, we've helped IBM reps directly close hundreds of thousands of dollars in sales over the years - likely millions indirectly (by using our code to demo -- exactly 1,187 IBMers have downloaded our Quickr Templates for instance).
There's also the issue of the aforementioned paperwork. Selling licenses isn't difficult from the value proposition, meeting business objectives, or creating innovative solutions to business process issues (that's the benefit of having provided consulting for so long). But actually being part of the "channel," as reported by many a friend in the industry, involves a lot of paper. NDAs, tests, SVI, SVP, GPP, Industry networks, sales "plays," incentives, mastery exams, Partnerworld levels, points, worldwide enterprises, country enterprises, Prometric testing IDs...I could go on - and that's just the IBM side of the equation. To sell software, you also have to have a relationship with a distributor. They're called VADs. To get one of those, you have to pass a credit check, fill out tons of forms, have them hook up numbers that relate back to your Partnerworld IDs, and ultimately, when a customer wants a quote (or they have one prepared by IBM), you ask the distributor for their quote to you. If you're lucky, there will be some margin in there - and of course there is, a little, sometimes a little more depending on things like special bids, special deals, and how much you actually sell. Then you have the client procurement issues to deal with, and the VAD rules and regs, and "registering" the sale so it counts for you in the IBM supercomputers. Say the client pays in 60 days and you get 30 to pay the VAD - that just won't do, so you have to build the same trust relationships (albeit at a different level than senior management) that you do as a high-end services organization.
Sounds like kind of a pain, huh?
Well, I went ahead and did all that last month. So today I'm announcing that to round out the value-laden consulting engagements on which we've always been focused, SNAPPS is officially open for business and can sell licenses, in the US, across the Lotus brand. The number of companies that can say that is about to get much smaller, since IBM is in the process of implementing new rules this year whereby a company needs to be "authorized" to sell a brand - a process of (you guessed it) lots of paperwork, multiple sales and technical certifications, and enrollment in programs designed to track whether you're, well, in the program. Portal's already gone over, Quickr, Sametime and Connections go next month on July 19th, and Domino goes in January 2011. We'll be authorized in all three, ready to help.
Do I have a lot to learn? Sure. But as I find out, I will share our stories (what I can share, anything public) here on LotusRockStar. And, as we get into the world of license sales for our clients, we're planning to really add the "value" bit at the beginning of that acronym.
Now I am going to share a secret. It's not a secret among partners, but is pretty hush-hush in the channel (until the tempest kicks in which is infrequent and shuts down quickly). You know that software maintenance "Quote" you get from IBM every year that looks suspiciously like an invoice? You don't really have to buy directly from IBM. At the bottom right corner in 0.2-point type is the proviso that you can indeed buy from your Business Partner, just reference the quote number. Partners have been dealing with this for years by tracking their clients on calendars and checking in with them to try to keep the business when IBM sends out those quotes. Don't get me wrong, IBM has a good reason for sending them out automated like that. They have no idea if the partner is still in a good client relationship, or for that matter even exists. So they get a pass on that. Sort of. My point is, you can buy from an IBM Lotus Business Partner and realize a lot of benefits that don't come with the dry transactional aspect of the direct renewal.
Guess what happens when you do that? The Business Partner (VAR, SVI, SVP, many other TLAs) can likely (but not always) give you a small discount, because they have a bit of a margin to work with. From our friend and future sage Wikipedia: "Resellers may have pre-negotiated pricing that enables them to discount more than a customer would receive by purchasing directly. This is because a reseller has already qualified for higher-tiered discounting due to previous engagements with other clients, and the strategic partnership between the vendor and VAR inherently brings the vendor more business." They likely (here's where the V and A kick into VAR) can also provide additional advice, services, and support in addition to the support you receive from IBM. Some partners even act as a proxy for their clients, opening support tickets and escalating them faster than possible if the client calls direct, because they add a ton of experience and pre-support diagnostics to the experience. They do more than just computing your PVUs and CALs. Maybe, if they happen to have a mature, value-driven and integrity bound consulting practice, they have the ability to advise you on a strategy level, if that's part of their bag of tricks (hint...it's part of my bag of tricks).
All you have to do, good customer, is be a good customer and pay your reseller on time, preferably a few days early to account for mail, so they can maintain good credit with the distributor.
What could be easier?
Next time you get a quote from IBM, or it's time to renew and your old partner isn't around, you need advice on licensing, computations, or want a software quote, you just like me, or heck if you're one of those 1,200 IBMers who'd like to say thanks for the assist, you may now contact us at licensing@snapps.com. Bring on the paperwork.
Thanks for reading. Back to your work.
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