The marketing of Novell products through VAR's is changing....What is the best model?
Roger - You raised some very good points. Let's look at a few of them and see if there is a consnsus on the board as to what Frankenburg's approach might be. From my perspective the APPLE turnaround is much more complicated and it will be hard to tie the two together other than the 'KEY' component to success is implementation of the 'new' management's turnaround plans.
It was not clear to me if your background was that on an engineer, MIS consultant, VAR, marketing Rep, etc. My analysis is from the perspective of an investor and what one needs to do to 'grow' a business, develop a corporate culture and service the customer.
First, I believe that the typical selling channel through VAR's (as in the past) is changing in the industry and more specifically at NOVELL. I read one analyst report that smaller VAR's are being terminated and only large VAR firms are being utilized. I do not know if in the current model if VAR's are really the most effective way to "service the channel". Perhaps for the VAR since their pay is based on commissioned sales from the products sold. Is this really the best sales model?? What we really want is something that solves the customer's problem, future problems and develops a long term relationship TO HELP THE CUSTOMER become more productive.
Why do we even use the term "servicing the channel". I believe Frankenburg is slowly implementing a change throughout the company and through their large VAR's to adopt a corporate culture where the customer and their problems/solutions comes first. No one company can provide all the solutions and in fact in the future it will require a VAR type consultant to develop and integrate many 3rd party solutions. You will no longer solve a customers MIS system and application with one company products as it was in the past especially with smaller size firms!
So what is the correct business/marketing/customer support model going forward? We can make a list of key critera which is required but the most important two items are (1) How do we fairly compensate the VAR consultant/customer service 'rep' and (2) is the customer getting the best solution and continued support.
Here is my guess for NOVELL and Frankenburg's direction. This will become more appearant as he makes future announcements and establishes other company alliances. NOVELL will adopt an HWP style of customer support utilizing a combination of selected VAR's (consultants), 3rd party company support 'teams', major partner hardware supplier vendors and other internal/contracted support staff to provide a vertically integrated 'team' of technical and problem solving experts to provide the customer the best business enterprise computing application. System integration is key and will include the BEST software and hardware platforms including Microsoft products, Novell products, RISC based, PC based and really what the budget and customer specifications require.
Perhaps a separate division will be established (similiar to what HWP announced several week ago) which provides services to customers for the Business Enterprise environment.
The VAR's and other 3rd party consultants will not be paid based on commissions of product sold but on fixed customer service contracts for services performed (ie. design, impementation, testing, upgrades etc). There will be renewable service agreement with all customers for continued support, upgrades and new product ad-ons. In fact, after studying the HWP way, NOVELL could generate up to 60% of their future revenues from "consulting services" separate from software sales.
The Business Enterprise division or company will be it's own profit center. Each large partner will subsidize the unit so bonuses or other compensation can be made to each 'consulting' service unit or team. The VAR as we know it, must change. The life cycle change for software and hardware products is much too short. By verticaly integrating the services, there will be a faster implementaion cycle for software changes/modifications and new versions from R&D to the customer. The company will utilize all 'open system' architecture, so their hardware partners can modify and change platform specifications as fast as the software side. This was demonstrated in yesterday's announcement with COMPAQ and Novell and their joint development of the new line of pentium servers (see my post on the Novell board).
So this is the road I believe Frankenburg is taking. It appears that he is betting that his concern for solving the customer's Business Enterprise computing problems AND the long term customer support through 'consulting' teams will win them new accounts and new business from their 50 million Netware 3.1 and 4.1 customers. Short term, the transition and selecting the teams and partners will be difficult. Several VAR's now seem rejected and outcasted and are in the dark.
If this in deed is Frankenburg's plan, he must communicate this to all the players, especially the VAR's which are a very important component for this to work and be profitable.
Rodger: As I get any hints from management as to which direction they decide to take, you will see them posted on the Novell board. It's speculation at this point and a sound customer service/marketing program must be implemented for the turnaround to be sucessful. You did notice in my posts, that the previous marketing VP left the company "to pursue other interests". The new management is pro-active so expect to see more changes.
EKS
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