Michael Garland hopes to change that by winning
The company will have to work hard to overcome Siemens' traditional direct sales focus, but Garland has said all the right things. For example, he wants a limited number of good UC VARs to move its Linux-based OpenScape Unified Communications Server product and is willing to pay fatter margins to attract them -- perhaps away from Microsoft, Cisco, Nortel, Avaya and other UC competitors.
"You can't make money with Cisco," Garland said. "There is a lot of concern about over-distribution." Many VARs would concur and add Microsoft to the list of thin-margin providers.
Siemens signed Synnex Corp. as its distributor of choice and hopes to leverage VARs in Synnex's Integrated Communications Group for the OpenScape push. Siemens now fields about 35 UCS Corp. partners in North America, and Garland said he would like to see that number grow to maybe 100 in the next year or so. But he said he is serious on the over-distribution thing. The goal is not to recruit a VAR on every corner. "I don't want them competing with each other on price," he said.
While Siemens may not be top of mind in UCS, especially after Microsoft and Cisco's hype fest in the last few years, it's always offered strong technology, said Donna Warner, regional vice president, central region, for Black Box Corp., a technical services company specializing in data and voice infrastructure systems.
"Technology-wise, OpenScape has always been outstanding. I think [Siemens] has an edge on that, but they were initially in a situation where when they put it together it was so complex, and with their margins it was hard to make money so no one touched it," Warner said.
Warner also said Siemens has addressed those issues since the joint venture formed last fall. "This is an entirely different organization and strategy now that Gore's group has come in. Even within the last 30 to 45 days they've restructured the organization so they have more people facing the partners, [they] hired new people with a channel background and most importantly they changed the compensation plans for their people."
That means Siemens has a compensation-neutral model that doesn't rob direct sales people of their margin should a sale go through partners. "What happens now is their direct sales folks get paid on anything that goes through partners and, in fact, get an uplift so our discount doesn't hurt them," she said.
Black Box sells and implements UC technology from Nortel, Cisco, Microsoft and Avaya, in addition to its Siemens business.
As any VAR knows, that compensation-neutral model is key in combating channel conflict. If a salesperson will make $800 instead of $1,000 by a product going through indirect channels, he or she will most certainly push to take the sale direct.