Channel Market Not Dead, Says CA

Computer Associates International Inc. (CA) continues to stand firmly behind its channel strategy amidst a growing arena of businesses that are starting to favor direct sales in a bid to acquire the success of Amazon.com and Dell Computer, which pioneered the practice.

"I don't think indirect sales is decreasing," said Alex Jiang, indirect sales vice president, CA Asia, who noted that the company's president and chief executive officer, Charles Wang, continues to be committed to CA's channel strategy.

The organization's target is to reach an equal ratio of indirect and direct sales, which in Asia, it is close to achieving, Jiang said. He noted that CA currently has "three to four" distributors and "at least 200 active resellers" in each country.

CA is looking to increase its number of distributors now that it has introduced new service areas to help organizations ride the e-business bandwagon effectively, focusing on key components such as bandwidth, application, service, and management, he added.

CA believes it is vital to empower its channel partners through professional services that will differentiate them from competition, and help them penetrate new markets, and churn additional profits, Jiang explained. He named IBM as an example of a company which may be losing revenue in PC and server sales but is raking in huge profits from providing professional services.

"Application service provider (ASP) is our new strategy in Asia," Jiang said, and highlighted five service areas that will be CA's key focus areas this year: desktop management, security, storage, network management, and helpdesk.

The firm is relying on its channel partners to deliver these services, encouraging them to build their strengths in offering one or two of these, and then work together in providing combined solutions according to their vertical market focus, he explained.

For example, partners specializing in the healthcare market could band to offer both desktop and server management.

CA's focus on mundane IT operations could strike a chord with organizations of all sizes, noted one analyst.

"Those are areas where large companies will say that this is basically an overhead IT function. They have to do it, but there isn't a big gain, or they're not involved in re-engineering like (they would be with) a CRM application," said Laurie McCabe, an analyst at Summit Strategies. "It's where they would want to offload the headache."

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