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CA storage software face hard uphill battle

CA encourages VARs to sell storage software to Midsize customers, but VARs see challenges ahead

At last week's CA World conference in Las Vegas, the company announced changes to its partner program, which included beefed up online training courses for partners and a new marketing portal designed to help channel partners better manage their demand-generation campaigns.

CA has also introduced an element to its internal compensation plan to try to reduce direct sales and channel conflicts, according to Bill Lipsin, CA's senior vice president of worldwide channels.

"Most of the customers we talk to within the medium-sized market already have some form of backup software."
Greg Knierieman
Vice PresidentCHI Corporation

Called a "channel neutral multiplier," the addition gives direct-sales representatives the right to be paid the same commission for a deal they've helped develop, even if the customer chooses a partner rather than CA to manage the deal and deploy the software.

For CA's storage resellers assistance came by way of establishing a business unit to help them sell a suite of CA storage software to midsized customers.

Some CA storage resellers said they welcome the change, others wish more could be done to support value-added resellers in the field.

For example, Greg Knierieman, vice president at Cleveland, Ohio-based CHI Corp.
has noticed that CA's software can be a hard sell among the very customers CA wants to capture.

Knierieman, whose company has been a CA reseller for more than a decade, said one of CA's biggest challenges in the midmarket is that customers are resistant to changing their backup software.

"The backup software market is very tight. Most of the customers we talk to within the medium-sized market already have some form of backup software, and the challenge is replacing storage software that folks have become accustomed to," Knierieman said.

To help resellers like CHI Corp., CA opened a midmarket business unit last month that will assist storage resellers with added technical and marketing assistance it hopes will drive storage software sales.

Through the business unit, partners will sell CA Recovery Management, a suite of storage applications that includes ARCserve, CA's backup and recovery software and XOsoft WANsyncHA, which provide business continuity, high availability, continuous data protection, failover and disaster recovery testing.

Storage revenue improvement, but still trailing the pack

But CA has a very long way to go to displace the competition. IDC's storage software service reports that CA improved its storage software revenues from $461 million in 2005 to $529 in 2006 -- a 14.9% increase.

Yet the vendor, which is in fifth position in market share, is far behind the rest of the field -- No. 4 is Network Appliance with $879 million; No. 3 is IBM at $1.2 billion; No. 2 is Symantec at $1.8 billion; and leading the pack is EMC at $2.7 billion.

Lipsin admitted that the storage software products have some challenges in the marketplace, but said the tools can also provide CA partners with great opportunities.

"One of the challenges is just name recognition in terms of storage management. When you think of storage you usually think of hardware vendors like EMC. What we've tried to do is not to go head to head with them to say that we've got better technology, but rather to find where our strengths are," Lipsin said.

Francis Poeta, president of Cliffside Park, N.J.-based P&M Computers Inc. sells CA security software, but has refrained from selling the company's storage software. Why?

"I think IBM's Tivoli storage management software is a more robust storage software tool than CA's offering," Poeta said.

Difficulties aside, Lipsin said CA will continue to focus on recovery management, which is a combination of backup and business continuity. He also said that by bundling CA's storage software the company has developed a tool that allows for managing the entire heterogeneous data center environment.

Fixing direct-sales and channel-sales conflict

CA's storage partners said they hope the company will execute on its plans to encourage its direct sales team to generate leads for partners -- a procedure that has been lacking in recent years, according to Knierieman.

"I don't know if CA really believes that the best way to grow its business is to have its direct people work with and complement the channel," Knierieman said. "On the other hand the channel people are calling us saying 'where's the order' but they are really not doing much to help us generate new business," Knierieman added.

Nevertheless, some recent changes have made a noticeable difference to channel partners like Todd O'Bert, president of Minneapolis, Minn.-based Productive Corp.

O'Bert likes the way CA has structured its sales teams, at least how they interact with Productive, which sells CA's storage and security software to the midmarket. CA's definition of a midmarket company is one that has 500 to 5,000 employees and revenues of between $100 million and $1 billion.

"CA has said they will take the 4,000 accounts of large customers and keep those direct while everything else is channel business," O'Bert said.

O'Bert also said CA is better aligning its business with resellers. One example is the quarterly rebate program in which partners are given sales targets to meet in order to get rebates.

"In past years for each quarter we would get our rebate goal at the end of the quarter, which didn't help us align our targets with our sales force. In this quarter, which began in April, we received our goal in mid April and that helps us to better plan and meet our targets," O'Bert said.

In the meantime Lipsin said CA's goal is to continue to build the channel and to drive revenue numbers up from channel business. Total revenue from the channel is less than 30% of the company's total, Lipsin said.

"It's not as good as it should be. We are striving for a third of our new business to come through the channel by the end of its current fiscal year, which ends March 31, 2008," Lipsin said. To get there, CA is charging ahead to make its midmarket push worthwhile for channel partners.

"We recognize that the channels are critical to make sure we can cover the midmarket properly and so this is a huge opportunity," Lipsin said. "We're putting marketing, training and other programs behind this to try and help partners effectively address it with us."

Let us know what you think about this story; email: Nicole Lewis, Senior News Writer.

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