Progress partnership model will extend ISV reach

Simon Quicke reports on the latest developments at the Progress Software Exchange 2002 conference in Chicago

Simon Quicke reports on the latest developments at the Progress Software Exchange 2002 conference in Chicago

The rules of a user conference seem simple - praise the vendor hosting the event, talk endlessly about its products, and at every opportunity attack the competition.

All of those requirements were on display at the Exchange 2002 conference for database specialist Progress Software, but there was also something different - an attempt to outline a partnership model that should offer independent software vendors (ISVs) the chance to pitch for business they would normally lose out on because of their size, location and balance sheet.

In a conference that was dominated by the words "collaboration and co-operation", the role of partnerships was presented as being crucial to the future of the company and held up as an example of how a successful software company should work.

"Our 2,000 partners are delivering 5,000 applications and there is a total of $5bn (£3.5bn) revenue in sales and services annually," said Joe Alsop, president of Progress Software. "We can accelerate growth ahead through closer co-operation and collaboration," he added.

A bigger proposition
Progress management chose the conference to reveal plans to extend a sector alliance programme, which involves teaming numerous ISVs together to target a large account in a specific vertical market, beyond just the UK and Belgium.

So far, the programme has produced two results in the utility market in the UK and in the transportation sector in Belgium. Mark Gilliland, UK channel sales manager at Progress, claimed the reason for the launch of the programme was as a response to ISV complaints that business was being lost because they could not compete against large multinational players.

"You might be an ISV selling a best of breed product, but because your turnover is only £5m and you have 100 staff, company size can be an issue. "A large multinational might get nervous about investing its business with a company that size," he suggested.

"We plan to put more effort into presenting a bigger proposition with Progress being in a position to be the prime contact," he added.

"People are happier dealing with us because we are big enough to sue." Vice president for Emea at Progress, Jaap Smit, added:

"We act as the safety net for the ISV and can offer worldwide support available 24/7. "The ISV, which could be locally based, might not be able to offer this." He said that with Progress backing a group of between three to 15 ISVs, this could present an offering pulling together numerous applications to create a complete database package.

Globalisation offer
Following the success in the utility market, the sector alliance programme in the UK is being targeted at the legal and manufacturing vertical markets next.

Gilliland added that as part of its push to improve ISV partnerships, Progress is aggressively targeting rival vendor partners to expand on its current number of 230 ISVs in the UK. "We took on 20 ISVs last year and now we are pro-actively looking for software houses with other technologies which are worried about their future," he said.

Despite Progress' focus on the SME sector, it is increasingly coming into contact with the database giants of SAP and Oracle as they move down from a saturated enterprise market. But Progress CEO Dave Ireland believed its rivals were failing to appreciate partners and the channel.

"We need a strong partner model and it requires a strong co-operative relationship," he said, pointing out the admission by an Oracle executive in November last year that the channel had been pitching its tent in the vendor's backyard for long enough, and to Microsoft's recent acquisition spree to buy partners, as an indication it would try to own, not share, the market.

"Microsoft wants to own [database business] applications like it owns the desktop," he warned. For users attending the conference, talk of extending training and consultancy to ISVs was greeted positively, as were plans to spread the sector alliance programme across from Europe to the US to encourage ISVs selling beyond the home market.

"We can offer globalisation. For ISVs looking to enter other markets, Progress can introduce them to other territories," Gilliland said.

How the Progress Software partnership model works
Over the last ten years, the software vendor has moved from a traditional model involving a selling chain from vendor to ISV to user, with 85 per cent of sales going indirect. More recently, it has offered more of a direct brokering approach giving users the choice to buy from Progress or an ISV. The latest approach is the sector alliance programme.

The sector alliance scheme works by pooling together the talents of a number of ISVs. For example, one might have an HR application, another financial accounting and a third might have fleet management.

With Progress pulling them together and offering the public face of the deal, they could well stand more chance of landing a contract to build a database system for a multinational.

Read more on IT for small and medium-sized enterprises (SME)

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