A vendor partner program is only as strong as the benefits it delivers, if delivered at all.
The promise of attractive margins, marketing development funds, deal registration and customers leads are the foundational base of many programs, which sound encouraging on paper, but an entirely different proposition in reality.
It’s no surprise that in a majority of major customer wins or government contracts, that vendors handle deals directly, hence why there’s a deal registration process, which is there to help minimise any real channel conflict and ‘protect’ customer deals.
But this becomes tricky when a vendor stakes a claim that it is their customer first and the partner was “invited” to the table only after the fact.
This detail can become a grey area if it’s not properly outlined from the outset, specifically who gets the best out of the deal in terms of financial incentives.
While not insinuating that all vendor programs are misleading or deceptive, plenty of cases exist in which partners register “deals” without ever closing any proper business.
On the other hand, there are vendors that bask in all the glory of a successful customer win, which wouldn’t get off the ground if it wasn’t driven through the partner and customer in hand.
Locally speaking, a public example of an obvious mismatch in this ideal of who claims what, and where the incentives are supposedly up for grabs, is Kalibrate Asset Management Solutions’ Victorian court case against IBM.
Kalibrate specialises in IBM’s asset management system, Maximo, and following its court claim (which was initially filed in October 2016), the company says that a month after landing a software deal with TasWater in September 2015, it registered the customer deal through the IBM global partner portal.
Sounds simple enough, right? Well, it didn’t quite pan out that way.
The company argued that the contract was valid under IBM’s Value Advantage Plus for Government (VAP-G) sales initiative.
Kalibrate believes that it is owed more than $500,000 in incentive payments in relation to the $2.57 million software deal, which was struck after an initial trial period of the Maximo software product.
On top of this, TasWater accepted an invoice from Kalibrate’s distribution partner, Meier Business Systems.
In addition to its $514,000 payment, the company is also asking for $20,000 from IBM to cover its legal fees.
Since the whole saga has unfolded, IBM terminated relations with Kalibrate in December and in its court documents, says it may have registered the sales opportunity itself and that it wasn’t convinced that Kalibrate played an “instrumental role in the deal.”
Following on from this, Kalibrate now feels that the VAP-G sales incentive was “misleading” and “deceptive”.
In further support of its claim, Kalibrate said it was the one that initially introduced Maximo software to Onstream and Ben Lomond Water - prior to the two companies merging into TasWater, way back in 2013.
And when the two companies were merged, Kalibrate was invited to demonstrate the asset management software.
However “instrumental” Kalibrate was in aiding to close the deal, the case underscores the tender issues and discrepancies that can arise between a vendor and channel partner.
It also places a strong emphasis on the deal registration process in all its potential pitfalls or glory as lawyers on both sides of the fence comb through all the customer contracts and very fine print.
And as the saying goes, the devil is in the detail, which no doubt becomes more obvious as this case proceeds.