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Zyxel’s David Soares: VARs Need More Help to Compete with e-Commerce

Q&A

…so e-commerce and VARs. The whole IT business was founded on the VAR channel originally, long before e-commerce or even retail existed. And then along came retail and for the VAR, it wasn’t just about selling the product and helping the customer choose the product. VARs have to do more than that to be successful and to help their customers. And I felt there was a lot more that Zyxel could do. The channel partner program that we have and are about to change does reward the VARs for the additional value that they bring to their customers, in helping to choose the products and in helping to install, run and maintain the products. But I felt that there was more that could be done. I believe VARs need to offer more services to their customers, and Zyxel can help them do that. So for example, in our field, which is networking, there is a place in the market for VARs now to offer network managed services to their customers. And through our new Nebula cloud management networking system, we’re giving those VARs a platform to provide that to their customers. So that’s an additional service VARs can offer their customers. Typically there’s a monthly fee for managing the network, so there’s a recurring revenue stream for the VAR … using our cloud management software.

CP: What are some of the major changes you’re implementing in Zyxel’s partner program?

DS: Previously, we had two tiers; one tier basically got a 10 percent discount and the other tier got a 20 percent discount on most of the products, so there’s a big gap there between the two. I think it was more difficult for the smaller VARs, perhaps, to compete given that the larger ones had a much larger discount in relation to them. And also the 10 percent discount probably wasn’t enough to reward them for the value add that they’re offering over e-commerce, for example. So with the new partner program, we’re offering what amounts to an 18 percent or a 22 percent discount program for the VARs who are registered in our program. That’s the Silver and Gold tiering that we’ll have. There’s a requirement for those VARs to get those discounts. One of those for the Silver is they have to sell $6,000 over a six-month period so it averages out to $1,000 of product a month. And for Gold it’s double that.

The other aspects of the program include things like deal registration, online training for our partners, tech support for the partners and also a lease-financing program as well. For those partners that want to get into…

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