LAS VEGAS – The channel will finally get its chance to build solutions around Computer Associates International’s flagship Unicenter products.
The move, announced at its annual CAWorld user group meeting here this week, is a monumental shift in culture and attitude for the Islandia,
N.Y.-based software developer. For 27 years the company has grown predominately through direct sales. CA’s direct business still accounts for 83 per cent of its overall revenue.
Tarken Maner, VP of business development and strategic business alliances at CA, said the 83-17 direct and indirect imbalance will soon narrow. He believes that in three to four years CA software sales will be 60 per cent direct and 40 per cent indirect.
“”We are trying to put order to where there is chaos right now. We have been a very successful direct business, but as the complexity of the IT infrastructure increases the need to get better with partners will increase as well because the costs for us to sell direct will go higher,”” he said.
A recent report from IDC found that worldwide the ratio between direct and indirect software sales is 70-30 in favour of direct in the top three markets (applications, middleware, and infrastructure). In infrastructure, the IDC report said the indirect/direct sales split was even.
Chris Devlin, CA Canada’s channel manager, said about 10 VARs in Canada would be able to handle the entire line of Unicenter products. However, he sees many more resellers being able to delivery individual module solutions to the market.
For example, Unicenter Desktop DNA gives organizations the ability to transfer all the elements of a company’s IT environment to a new refreshed environment. Meanwhile, Unicenter for Web Services is a much more consultative sale for partners, Devlin said.
He added that it is realistic to see Unicenter partners in Canada experiencing about 30 per cent margin or higher with the product lines.
Mark Lorne, senior director of sales, business operations, for Ingram Micro Canada, believes Unicenter in the channel will mean more opportunities for solution providers to expand their offerings.
Ingram Micro Canada carried the Unicenter product briefly three years ago, Lorne said. CA is a member of the distributor’s SMB Alliance program.
Lorne added that his company’s role would be to help CA Canada recruit partners for Unicenter. “”We definitely have the reseller base and we can connect CA to them,”” Lorne said.
Access to the much sought-after enterprise management software solution, which encompasses hundreds of product suites, is something many channel partners have dreamed of. It was made possible, according to Maner, because customers forced CA’s hand to take Unicenter through the channel.
He added that CA is also working internally to re-align its direct sales force to work with channel partners, especially in the small-to-mid-size marketplace. With that, CA is looking to develop more vertical industry solutions, build up its consumer and SMB business with system integrators, OEM partners and resellers.
One thing CA will not do today, but might in the future, is bring out a shrink wrapped packaged solution for the mass market retail channel, Maner said.
CA would rather partner with companies such as Microsoft and Intel to attack that market. For example, it currently partners with Microsoft on a security PC online initiative. Since the start of this year more than 500,000 people have gone to Microsoft’s Protect Your PC Web site to download a personal anti-virus and firewall from CA’s Etrust security line, Maner said. The free 12-month license allows CA to build on its lead generation program. When these licenses expire, CA channel partners will get an opportunity to service them.
“”Even at a 20 per cent, which is below market standards, that is still 100,000 new users (from the start of 2004 through the Protect Your PC Web site), which the direct sales force simply cannot get to,”” Maner said.
Mark Parrinello, regional manager for CA’s direct business, said the imbalance with direct and indirect will change in favour of the indirect side.
“”My direct sales force simply cannot get to the SMB market, we just do not have the feet on the street the way the channel does,”” Parrinello said.
On the enterprise side, where Unicenter predominantly plays, CA wants to triple its run rate, but Parrinello said that with IT budgets not increasing significantly the only way to meet that goal is through business partners.
With that, Parrinello has instructed his direct sales team to work with the channel in developing more sales opportunities, especially in SMB. CA’s direct sales force will be paid a percentage of the net of every sale closed by the channel.
In Canada, Devlin said the subsidiary’s direct sales force would be getting the same rate – $1.15 for every dollar sold through the channel for deals $10,000 and above.
