In today's competitive distribution landscape, it is all too easy to fall prey to simplistic business practices - that of simply lowering prices to attract customers.

However, for a distributor or reseller to survive in the long haul as a respected member of the IT industry, the channel has to develop key business and technical strategies to leverage its range of products and solutions. For example, simply competing against other channels by lowering prices to end-user customers or downstream resellers may attract business initially, but will inevitably and eventually hurt the overall business landscape, forcing every channel partner to either stay away from distributing the same products and solutions, or collapse altogether.

The Internet's influence on distribution

With Internet becoming the ubiquitous communications model across the globe, many corporations large and small are adopting the Internet exponentially. With the rapid adoption of the Internet communications model, many corporate adopters are also recognizing the need for a sound security policy and system.

That is why companies such as Check Point Software Technologies, the award-winning maker of FireWall-1 and VPN-1 (amongst other complementary products they have), has become the leading Virtual Private Network (VPN) and firewall vendor in the world, with over 70% marketshare in the firewall market around Asia Pacific, according to an IDC report. Check Point Software has also implemented over 20,000 VPN installations, with over 80,000 customer installations.

And because of the rapid recognition of the importance of Internet security, complementary vendors have also become successful, including Check Point OPSEC (Open Platform for Secure Enterprise Connectivity) partners such as Stonesoft Corporation. Stonesoft recently went public in Finland, and offers high-availability, redundancy and load-sharing capability to Check Point FireWall-1 through its unique Stonebeat product.

In Asia Pacific, Check Point Software work exclusively with distribution channels to sell to end-user customers, as with many large IT vendors in areas such as Internet software and internetworking hardware. This may be attributed to the fact that Asia Pacific is a diverse market with geographical zones that operate under varied cultures, languages and business preferences. Therefore, it is often commercially more viable for IT vendors to appoint reputable

distribution channels to push products and solutions into Asia Pacific countries, then to go it alone.

With this distribution strategy, however, IT vendors have to contend with managing channel partners, who all have their own business practices and preferences, besides operating under different regulatory and business climates. For example, a channel partner in Singapore operates quite differently from one in China, or in Japan. Beyond that, IT vendors have to ensure that their marketing and publicity campaigns are universally and homogeneously delivered across different countries. And the only way is to work synergistically with their channel partners to ensure that happens to a T.

How then, can channel partners and IT vendors work more closely to deliver world-class enterprise and Internet security solutions to end-user customers?

Strategic marketing for "mindshare"

In this fast-paced world today, where disposables rule, customers tend to forget quickly about their suppliers. Therefore, it is important that customers retain "mindshare" about their suppliers, and stay that way.

Marketing is the key method to create and enforce mindshare in customers. A good strategic marketing program is not just about advertising and public relations, but also include evangelism, direct mail, sponsorships, partnerships, and crisis management.

Channel partners can work closely with principals to erect print and broadcast advertising platforms in their respective countries, with selective customization to suit the palates of the readers and viewers of these countries.

At the same time, channel partners can work with principals to develop co-operative marketing funds, which are tagged to sales performance of the channels. These funds are normally dispersed quarterly, with endorsements by principals to ensure consistency and conformance with the principals' corporate communications standards.

Beyond that, channel partners must be pro-active in offering media publicity opportunities to their principals, by becoming the critical bridge between the local media and the principals. It is common that the media is more interested

in finding out about foreign visitors with a unique story, and the channel partners can be instrumental in creating these bridging opportunities. At the same time, channel partners can help to collect media clippings and submit to the principals to create a consolidated media clips file, which can then be re-distributed to channels of other Asia Pacific countries as information aids in promoting the security solutions. For example, a channel in Malaysia will then have access to media clips from other Asia Pacific countries such as Korea, China, Indonesia and others. These clips can help build a more complete story when the channel can demonstrate to potential customers past successes that are replicated in many countries in the region.

Evangelism, a concept started by Guy Kawasaki formerly of Apple Computer, is the direct dissemination of information through a passionate delivery before an audience or media platform. It is a powerful tool to energize not only channel partners, but to end-user customers as well. However, channel partners must elect charismatic speakers on their staff roll to be trained as product evangelists. These evangelists will have a roving duty at public seminars, paid conferences, educational lectures, and even trade shows.

Channel partners are the best people to implement direct mail, since they are in touch with their local prospects and existing customers. Principals can work closely with channels to develop either localized direct mail collateral, or use the co-operative marketing fund to finance the channels' own direct mail efforts. Direct mail can be effected through postal delivery, fax or e-mail. However, it is important to note that direct mail campaigns usually have a low return (or response) rate, between 2 to 5%. Therefore, it is important that channel partners develop a strong user and prospect database, or opt to rent one from a reputable mailing database supplier.

Sponsorship opportunities are unique because they inspire some degree of community spirit or charitable effort. For example, channel partners can work with charitable organizations to sponsor directly with funds, or offer labor or other forms of efforts to help these organizations. There is no direct correlation between these sponsorships and sales, but channel partners should be aware that charitable efforts are often recognized by the community at large (including customers and the media) and serves a long-term impression.

Partnerships arise for channel partners when complementary products come along. For example, a channel partner may opt to sell a firewall software, and approach a local hardware vendor to bundle the hardware with the firewall software.

Through these loose or contractual partnerships, channels can cross-sell together with these partners, and open up new sales opportunities. At the same time, it is important to cross-train employees from both companies to familiarize with both offerings.

Marketing is a pro-active effort, and crisis management cannot be seen as a reactive one. Therefore, as with any prepared organization, channel partners should have a sound crisis management program that can handle a current crisis (if and when it happens), as well as a system for exercising "fire drills" to mobilize everyone on board for total preparedness in mock crises.

Developing people through training

It is recognized around Asia Pacific that the key to the new world is by knowledge. That is why the Singapore Government initiated the idea of the "knowledge-based economy" for the millennium.

With that note, IT vendors have to develop good-quality training systems that not only allow channel partners and customers to participate, but allow future customers to participate as well.

For example, Check Point Software has the Certified Check Point Security Administrator (CCSA) and Certified Check Point Security Engineer (CCSE) programs, parallel to programs offered by vendors such as Microsoft with its MCSE programs. These certification programs can be used to offset credit requirements in certain universities and colleges, and are therefore valuable in developing channel partners, employees and even students. Stonesoft also has Authorized Training Sites (ATS) that offers Administrator, Engineer, Master and Trainer certifiable training programs.

With the expansion of training and delivery techniques from instructor-led (classroom) programs to that of Web-based Training (WBT), there are also many IT vendors that are now migrating some portion of their training and testing to an online scenario. Check Point Software, besides operating Authorized Training Centers (ATCs) through its channel partners, also has some channel partners participating as Check Point Testing Centers (CTCs). Students can now take theexaminations of the CCSA programs online.

So, what can channel partners do to enhance their competitiveness through training and development?

First, it is imperative that channel partners attend all relevant industry-standard training programs (non vendor specific), including academic degree programs, for their chief engineers and consultants. In Asia Pacific regions, it is not uncommon to find that people do attach a value to academic attainments, and equate that to some degree of credibility. Therefore, channel partners can develop and reward some of their key employees with external academic programs that are relevant to their areas of work.

Second, it is equally important that channel partners educate themselves with all of their principals' training programs, and to work closely with engineers and support personnel of principals to get to the heart of the security solutions they are distributing. This is because Internet and enterprise security solutions are not simple office productivity suites such as Microsoft Office, which does not require high levels of technical competency to move out of the warehouse. Internet and enterprise security solutions such as firewalls require technical competency, often fringing on connected areas such as routing, IP address management, filtering, and even virus protection. Therefore, beyond studying at length on the principals' offerings, channel partners should also study adjacent and complementary areas to provide an enterprise-level, strategic profile that can be easily presented to end-user customers or downstream resellers, so that the buyers are more comfortable and therefore more likely to purchase these high-level solutions.

One of the key concerns in Asia Pacific is that human resources are scarce, and mobility is high as well. People join and quit quite readily. Therefore, channel partners may feel that investing in educating its people may be an expensive and sometimes futile exercise.

However, that may not need to be the case. For upstream channel partners that have adequate inhouse expertise and size, they can develop an inhouse intranet knowledge base that gets updated with each new customer case, technical support filing, or even principal's information. Through this collaborative intranet scenario, all relevant employees within this channel partner can contribute to the knowledge base, and new employees (and old ones) can learn from the knowledge intranet easily, at his or her own pace. When people move, the knowledge base remains within the domain of the channel partner. The channel partner can even use this knowledge intranet as a business and competitive tool, by offering privileged access to its downstream resellers and end-user customers through secured access.

Moving from salespeople to consultants

In the knowledge-based economy, it is no longer enough to just sell. Customers today are discerning, and demanding.

For channels to be successful in the long run, they have to be pro-active in marketing themselves and the security solutions through a strategic marketing campaign that links tightly with their principals' own marketing efforts. At the same time, channels have to develop and nurture their own people through a comprehensive industry and academic training system, and move their people forward to become consultants to downstream resellers and end-user customers - simply because that is what customers demand progressively.

With the Internet, selling Internet security solutions is an obvious path a channel has to take, albeit with a compressed time frame where nothing stands still. Every product a channel sells today is superceded by a greater version or a new product altogether. In closing, the road to any successful business is never a straight and easy one. It requires not just tenacity and luck, but a knack for understanding customers and an unsatiable desire to learn.