Avaya Rolls Out New Channel Program
Shifts focus from hardware to software and services to better align with changing market dynamics.
The UC industry is experiencing tremendous change as software-driven, cloud-based technologies and new business models take root. OEMs and their sales partners must adapt to these market-shifting forces or risk becoming also-rans, which is why changes to channel programs are practically an annual ritual.
Sometimes the changes are so great that a vendor finds it more appropriate to rename and relaunch a channel program then to revise it. Such is the case with Avaya, which today announced Avaya Edge, its newest global channel program. Avaya Edge replaces Avaya Connect, which launched nine years ago.
In a briefing, Avaya explained that it felt the need for an entirely new program due to industry shifts and portfolio evolution. Avaya Connect was very hardware-focused, appropriate at the time of the program's launch. Today, however, software and services have increased to about 51% of total revenue at Avaya, and that hardware focus is no longer the best approach.
The biggest change from Avaya Connect is that Avaya Edge recognizes and rewards partners for total annualized revenue, including services and subscriptions. To date, Avaya has been using promotions and incentives as part of Avaya Connect to accommodate the gradual revenue shift from hardware to software and services. With Avaya Edge, it provides a programmatic change.
Key elements of Avaya Edge include:
- Simplified Structure - Streamlined requirements reduce complexity and the resources partners need to manage the program. For example, Avaya Edge can potentially halve the amount of time partners previously required to complete credentials.
- Greater Benefits - Partners receive compensation for a broader scope of revenue, including not only hardware/product sales but also recurring services and software. In addition, new incentives will reward partners for strategic areas of achievement, such as customer value, growth, and new product adoption.
- Flexibility -The new program is better structured to accommodate and adapt to ever-changing industry, customer, and partner dynamics.
Avaya reports that its successful partners are far more diverse today in terms of size and business focus. To better accommodate emerging business models and specialized resellers, Avaya Edge introduces different tracks.
Initially, it offers six tracks: Cloud, SMB, Enterprise, Systems Integrator/Service Provider, Distributor, and Direct Market Reseller. . The tracks are designed to accommodate partner go-to-market models, revenue targets, and geographic regions. Each track has a different set of requirements, including revenue, credentials, and customer satisfaction. Avaya Edge is a global program, so regional differences are also part of the mix.
Whereas Avaya Connect recognized partners by metal (Platinum, Gold, and Silver), Avaya Edge uses minerals (Diamond, Sapphire, and Emerald) as a clear signal of a new program. Each level has variations on the different benefits such as market development funds, lead generation, demo solutions, and rebates.
Seventy-five percent of revenue flows through Avaya's channels, so changes like these must be implemented carefully. Avaya worked with internal and partner stakeholders, including individual partners and its Partner Community Council, to make sure it addressed all interests properly. Avaya has also built in feedback loops for ongoing adjustments as necessary.
Although just announced today, the program officially launched on Oct. 1, to align with the start of the company's fiscal year. Avaya will evaluate partners under both the Connect and Edge programs for the first six months, recognizing them at the higher level to give them time to align with the changes.
"Like many organizations today operating in a rapidly evolving environment, Avaya is updating its channel partner program to one that is more in line with the world of software and services," said Dan Silverman, president, Telanet Canada. "The company has worked diligently with key partners ... [to keep them] abreast of the plan as it develops and has the opportunity for feedback. This open communication has been important to ensuring the new Edge program is a change for the better," he added.
Avaya believes that Edge will give partners higher overall rebates and improve alignment with its global network of partners. Avaya is confident that Edge will be simpler and provide increased flexibility, and that its continued focus on customer experience will facilitate a smooth transition.
Dave Michels is a contributing editor and analyst at TalkingPointz.