Some Symantec Partners At Risk of Losing Gold Status
By Kevin McLaughlin, CRN
2:07 PM EDT Thu. Mar. 15, 2007
April has traditionally been the month when Symantec and Veritas have evaluated contributions from channel partners and either raised or dropped them to new levels based on performance. This time around, under a unified channel program that is approaching its one-year anniversary, Symantec is offering partners new contracts, showing them where they stand against their commitments, and informing them of any changes to their status.
This year, the stakes are higher than ever, according to solution providers. Partners that don’t meet their numbers are getting bumped down a level, which affects their margins on registered deals. But some partners claim that Symantec hasn’t been clear enough about when it would begin enforcing the terms and how it recognizes partners’ contributions.
With the launch of a new channel program last April that unified 20 different Symantec and Veritas programs, the Cupertino, Calif.-based vendor grandfathered in partners at equal or better levels, and told them they needed to drive sales volume, invest in training, and drive market demand, said Julie Parrish, vice president of global channel sales and strategy at Symantec.
At the same time, Symantec introduced a three-tier partner ranking system in which Platinum partners receive a 12 percent rebate and 8 percent upfront discount; Gold partners get a 10 rebate and 8 percent upfront discount; and Silver partners get a 5 percent rebate with no upfront discount.
This year’s releveling is causing many Gold partners to scramble to maintain their status or face the consequences of being dropped to Silver, which includes a 15 percentage point margin loss on registered deals.
One solution provider, whose channel account manager has told him he’s going to be dropped from Gold to Silver level on April 1, said he’ll suffer an immeasurable impact from the move. “Partner level gets worked into how competitive you can be and makes a huge difference in margin structure,” said the source, who asked not to be named.
One Platinum channel partner said that when Symantec launched the program, his understanding was the first year would be a trial period to see what would happen with the new channel program benchmarks.
“The problem is, they started enforcing the terms early, so people who are more connected to Symantec in terms of leads are fighting and kicking to maintain their level, while those who are less connected are getting kicked down a level,” said the source, who requested anonymity.
Parrish acknowledged that there’s a “big drop” in margins on registered deals between the Gold and Silver levels. However, she noted that most of Symantec’s competitors don’t offer deal registration to their lower program tiers, and last year Symantec lowered the deal threshold to $5,000 for Backup Exec and antivirus software to allow more Silver partners to participate.
The annual sales volume requirement is $2 million for Platinum level, $250,000 for Gold level, and $150,000 for Silver, according to Parrish. “We want a significant difference to offset the investment required to be Gold or Platinum,” she said.
Parrish says Symantec last April informed partners of the terms of the new program and said they’d have a year to meet them. “I believe we were very clear in letting them know about the terms and our intent to enforce them,” she said. Symantec in general tends to raise partners’ level throughout the year if they meet their requirements, she added.
Several Symantec partners told CRN they welcome the program releveling because it recognizes their investment in time and training and normalizes the competitive landscape.
“It’s always good when a vendor can drive distinction and keep the bar high for the guys who are investing in their products,” said Nick Cellentani, vice president of storage consulting at Adexis, a solution provider and Platinum partner in Columbus, Ohio.
Carl Mazzanti, CEO of eMazzanti Technologies, a Gold partnerr in Hoboken, N.J., says Symantec added the new requirements with partners’ best interests in mind. “Volume commitments and investments in vendor certifications are just ways to ensure that competing partners have worked as hard as we have to get a return on the investment,” he said.
Although Symantec has different requirements across its global regions, in general the volume metric is less than half of the total weighting of what it takes to move up in the program, said Parrish. Additional requirements include training — not just in the form of certifications — and driving market demand, which measures deal-registration numbers and participation in marketing programs, she said.
Pat Edwards, vice president of sales at Alliance Technology Group, a Gold partner in Hanover, Md., is looking to move up a level in the program if he can close enough deals in the next month.
“It’s a hard situation for both partners and the vendor, but investment in each other is the name of the game,” he said. “Partners are trying to make money on product, and the vendor trying to convince partners to do more with their product line.”
“It’s unfortunate that sometimes partners are in a sticky situation where they have to focus on more than one product line to get mindshare [with the vendor],” added Edwards.
Another Gold partner who’s facing the prospect of getting bumped down to Silver level believes Symantec is moving to thin the ranks of a channel he says has grown “somewhat crowded” since the Veritas merger.
He’s not giving up, though. “We’ll have to take some deals and crank down margins. If I can hit some big sales, then maybe I’ll be able to hit my revenue requirements and get back to Gold,” said the source, speaking on condition of anonymity.
Confusion over partner releveling isn’t going to be an issue in the future because the current contracts Symantec is bringing to partners are designed to be evergreen, and the vendor will no longer be presenting new paperwork to partners every April, Parrish said.
Symantec had intended to launch a points system in January to allow partners to track their status, but that has been pushed to the second half of this year, in part due to the ongoing IT issues stemming from its ERP upgrade last November, Parrish said.
Carl Mazzanti is Co-Founder and President of eMazzanti Technologies, Microsoft’s four time Partner of the Year and one of the premier IT consulting services for businesses throughout the New York metropolitan area and internationally. Carl and his company manage over 400 active accounts ranging from professional services firms to high-end global retailers.
eMazzanti is all about delivering powerful, efficient outsourced IT services, such as computer network management and troubleshooting, managed print, PCI DSS compliance, green computing, mobile workforce technology, information security, cloud computing, and business continuity and disaster recovery.
Carl Mazzanti is also a frequent business conference speaker and technology talk show guest and contributor at Microsoft-focused events, including frequent prominent roles at the Microsoft Inspire (Worldwide Partner Conference / WPC).
Carl, a serial Entrepreneur, gives back to the community through Entrepreneur teaching engagements at Georgetown University, the company’s ocean wildlife conservation effort, the Blue Project, and Tree Mazzanti.
