Partners in Success: A Profile of the Unisys Business Partner Organization

Both Unisys and its partners benefit from the Unisys Business Partners Sales Organization. But how does it impact today's users?

• 08/01/1999

Once viewed as pariahs, value-added resellers (VARs), independent software vendors (ISVs) and the distributors that comprise Unisys’ Business Partner Sales Organization now account for 39 percent of the company’s North American Computer Systems revenues and are expected to increase to 50 percent by 2002.

In keeping with Unisys’ recently enlightened view toward these third-party channel organizations, they are provided with one-on-one attention from partner sales executives, strategically slotted into market niches in order to avoid channel conflict, welcomed into Unisys sales courses and given their own location on the Unisys Web site.

In return for this corporate largesse, these business partners must first and foremost produce at least $1 million in Unisys revenues per annum. In addition, they must develop a joint yearly business plan, report their quarterly progress, make downpayments on the Unisys products they sell and become technically certified on those products as well. So far, the result of this program is a win-win situation for both Unisys and its partners.

Rick Carbone, Vice President of Business Partner Sales, has been a driving force behind the creation of this new sales organization. Since being given his mandate to revamp Unisys North American channel strategy in January 1998, he has dramatically scaled down a huge, inefficient organization of some 700 partners, turning it into a lean, aggressive cadre of strategically aligned business partners.

"When we went to the partners who fit into our strategic plan and told them we were going to significantly reduce our total number of partners and that their business should significantly increase as a result, they thought they’d died and gone to heaven," Carbone notes.

Carbone inherited a mosaic of disparate channel groups when he came on the job. With each of these different organizations representing the Unisys channel, the messages they projected were, at best, confusing. Under these circumstances, it was impossible to assemble a unified, clear-cut strategy that spoke for the company as a whole.

The first big step in resolving the situation was consolidating three organizations – the PC-oriented distributor organization, the field channel organization and the Blue Bell, Pennsylvania-based group responsible for systems integrators and ISVs – into one group.

Carbone calls this consolidation a "godsend," adding, "The good news was, we had three organizations under the direction of a group of individuals that was going to define the channel strategy for North America going forward."

The next step was deciding the future structure of the three groups, as there was a tremendous amount of duplication. It didn’t take long to realize that there were far too many partners. The challenge was to reduce their numbers and create the right mix. On one hand, that meant identifying partners with which Unisys could build a sustainable business. On the other, it called for weeding out the weaker prospects, which would either be "disengaged" or turned over to a telesales support group.

Many difficult decisions had to be made. There were goals to meet and work to complete, so during the first six months of 1998, Carbone and his associates, including John Grosser, Director of Sales Operations, reorganized. There was no time to recruit new partners or to build new business.

When all was said and done, the new Unisys Business Partner Sales organization ended up with 65 partners under direct management. Of these 65, three distributors, 21 VARs and 19 ISVs generate 92 percent of the revenues, although the other 22 also bring in at least $1 million in Unisys revenues yearly. There are 21 partner sales executives dedicated to those 65 partners to ensure that each partner will receive the individual attention needed to significantly grow Unisys core business within the channel.

The three distributors are Ameriquest, Savior and Bell Micro Products. Between them, they service 575 resellers.

The VARs typically add custom application software or otherwise wrap some kind of specialized service or systems integration around the Unisys products they resell. Although they have their own sales forces and support organizations, in certain instances they may call on the Unisys sales force when they require additional salespeople or a certain line-of-business expertise.

In Carbone’s words, "We treat our VARs as an extension of our direct sales force with one exception: They are not directly on the payroll."

ISVs fit especially well into the Business Partner Sales organization. Carbone calls them "the types of partners we are looking to recruit as we move forward." ISVs develop software solutions tailored to meet the needs of customers in particular vertical markets. Because they lack what Carbone refers to as "feet on the street," they largely rely on the Unisys sales force. Typically, the ISV, in conjunction with a Unisys salesperson, will make an initial sale based on a software solution, and then either Unisys or a Unisys VAR will follow up with the hardware sale. In cases where Unisys gets the hardware sale, it pays the ISV for leading the deal.

Even the most successful vendors’ VAR and ISV programs are notorious for their turnover, so why should the situation be any different at Unisys? Carbone warms to this topic, quickly describing how the "big fish in a small pond" philosophy pays real dividends. As he explains it, his key recruiting tools are the promise of maximum one-on-one support from partner sales and minimum channel conflict. He points out that this approach contrasts sharply with the strategies of competing companies such as IBM, Hewlett-Packard or Sun Microsystems. At those companies, 700 or more partners may be thrown together in a highly competitive, Darwinian environment without strong central vendor support.

Carbone also cites the quality of Unisys products – most notably the ClearPath processor line, the company’s payment systems product and NT servers – as compelling reasons for partners to join Unisys. Although partners are not allowed to sell high-end ClearPath configurations, there are no restrictions on NT Aquanta enterprise servers or the payment system products, which have a long-standing reputation.

The payment systems product is primarily used for two applications: check processing at banks and commercial remittance applications at credit card companies, utilities and other periodic billers. On the bank side, the Unisys partner sells the hardware and application software into image-enabled check processing operations. On the commercial remittance side, the Unisys system processes the checks and payment stubs.

"It’s a very profitable business for not only Unisys, but our partners," Carbone notes. "But if it wasn’t for our partners, and their solutions and expertise, this business would not be the success that it is today."

Channel conflict has long been the bane of reseller organizations, and Carbone acknowledges that it will always exist to some extent. However, he believes the Business Partner Sales organization is doing a good job of minimizing channel conflict by carefully selecting partner niches and working to reverse Unisys’ longtime antipathy toward third-party channel partners.

When it comes to picking partner niches, Unisys conservatively determines how many partners it wants to recruit for any given market. "There’s no way it makes sense for me to over- recruit because at the end of the day, nobody wins," Carbone observes. "Partners compete with one another, they start discounting products heavily, and before you know it, they’re coming and asking us for additional discounts and everybody loses."

"Our culture and heritage at Unisys was the mainframe environment, and you didn’t need partners to sell mainframes," Carbone comments. "We

didn’t know how to sell with partners; we viewed partners as competition; we viewed partners as evil; and that is because we never educated our people on how to sell with partners."

In the new world of the Business Partner Sales organization, the sales force is powerfully motivated to use partners rather than selling directly. How powerfully? If they work a sale through a partner, they make 40 percent more in commissions. That is called sending a message.

The company also sent a strong message when it started inviting business partners to sit side-by-side with each other and with its sales staff in corporate sales courses held at Unisys University. Prior to the establishment of the Business Partner Sales organization such an act would have been viewed as sacrilegious, unimaginable. As Carbone puts it, "There are people who would have said, ‘Are you crazy? We don’t want to let them in on our trade secrets.’"

Unisys is not a high-volume, commodity-based channel model. It is selective and focused, where in many circumstances less is more. The company is smart enough to understand that it benefits if its business partners benefit. Ergo, it creates a favorable partner business climate filled with appropriate incentives.

In return, Unisys demands performance and moves aggressively to make sure its demands are met. One way it does that is through the formation of a yearly partner business plan, known as the "Channel Account Management Plan" (CHAMP). The CHAMP carefully spells out the goals and responsibilities of the partner who, along with their Unisys partner sales executive, signs the document. Once each quarter, progress is checked against the CHAMP to ensure partners are on track. At the end of the year, if that partner doesn’t perform against the plan, their account status is subject to review. Unisys is not quick to drop that hammer, but it is also not overindulgent of failure.

In addition to using the CHAMP, the company also demands downpayment on products to be sold – a novel idea, and one that Carbone says makes a lot of sense to him, even if his partners originally bridled at the concept. "Our partners thought we were crazy," he says, adding they complained that HP, IBM and Compaq would not ask for money up front.

"We put a huge emphasis on collecting cash, and I told them that," he explains. "And since they are an extension of our sales force, I told them I was also going to put a huge emphasis on them to collect cash. They hemmed and hawed, but guess what? They collect cash. It’s amazing. It helps their own business because I may ask them for 10 percent, and they are going to turn around and ask their customer for 20 percent. In the end, they have come back and said, ‘You know what? This makes sense.’"

About the Author: Bruce Hoard is a freelance writer based in Salem, N.H. In addition to being the founding editor of Network World, he has written and edited stories for a wide variety of publications and media during his 22 years in the high-tech publishing industry. He can be reached at (603) 894-1326 or via e-mail at bhoard@mediaone.net.

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Adding value is a concept that Wausau Financial Systems well understands. During its 25-year history, this value-added reseller (VAR) has made a name for itself by adding value to transaction processing applications for the payment processing industry.

Mark Pitman, Senior Vice President of Sales, also understands the value Unisys brings to his company, which has been a Unisys business partner since acquiring SoftCheck Corp. in 1997. Wausau Financial Systems, which is based in Wausau, Wis., primarily buys and resells Unisys check transport devices for its payment processing solutions.

Asked why he believes Unisys is a good business partner, Pitman cites the "tremendous amount of brand recognition" the company has in the payment processing marketplace, saying, "They have provided quality hardware and support to the industry for a long, long time."

He goes on to say that the Unisys relationship opens doors that would otherwise be closed to his company because, in many cases, customers lose interest in payment processing solutions that do not involve Unisys hardware.

There is no doubt in Pitman’s mind that Unisys focuses alot of personal attention on its business partners. "Unisys paid us a tremendous amount of attention prior to signing our relationship agreement," he says. "But it didn’t end there. In fact, it was really just beginning. They then handed us off to the support side of the house. The number of Unisys associates that have worked hand-in-hand with Wausau Financial Systems has been tremendous, and the amount of attention they have paid us has been beyond our expectations."

That attention includes quickly providing products, helping to set up marketing programs and working closely with Pitman and his company on an ongoing basis to make sure their relationship stays on track.

As a member of the Unisys Partnership Council, Pitman has also been in a position to talk with other Unisys partners, and he has found that they, too, share his good feelings about the company. "Most of them say the same thing: Unisys has been paying them a great deal of attention and they are greatly appreciative of that attention," he says.

On the issue of channel conflict, Pitman says it has not been a problem because Unisys has done a good job of not only directing his company into the channels he has requested, but also in identifying other channels as well.

The bottom line: "Wausau Financial Systems had an incremental increase in sales during the last half of 1998 that I believe we wouldn’t have had without the Unisys relationship. We are budgeted for a significant increase in Unisys product sales during 1999 and we are on track for that. This is not taking away from dollars we have budgeted for other vendor channels, but it is certainly adding to our profitability because it is a channel and a product line we haven’t had previously. There is no doubt that we are more profitable as a result of our relationship with Unisys."