March 31, 2004 -- (WEB HOST INDUSTRY REVIEW) -- A recent flurry of announcements from Verio (verio.com), the Web-hosting giant and subsidiary of NTT Communications, will be welcome news to resellers looking for a new host. The company is set to funnel a load of perks to its channel partners through several new incentive programs, all of which will provide a nice bonus for resellers.
Verio announced at the beginning of this month that it is offering two new cash incentive programs through its ViaVerio brand name, a name well known in the industry among those who make use of enterprise hosting and network services for small and medium sized businesses.
One cash incentive program will see bonus payments up to $1,000 per customer ($10,000 total) to new and existing business partners who migrate enterprise-hosting accounts to Verio through June 30, 2004. The other program is targeted at former Cable & Wireless customers left high and dry by that company's exit from the US market, and offers partners bonus payments for each C&W customer they refer to the viaVerio partner program through May 31, 2004.
But the offers are much more than a good deal, representing as they do a new focus on the reseller market by one of the largest hosts in the small and medium-sized business market.
According to John Bell, vice president of sales and marketing for the ViaVerio shared hosting partner program, the move is a conscious shift by the company to better target the reseller or indirect market. "We're investing in the indirect channels far more than we are in our retail and direct side," says Bell. "The reseller business has grown significantly on a year-to-year basis. So we're definitely investing in this side of our business big time in 2004. Right now we're at 40/60 indirect to direct and my goal this year is to make it a fifty/fifty split."
The new focus will also see the company reestablish its reseller advisory board, which was disbanded some time ago. According to Bell the company will categorize its reseller base into three groups—top performers, mid-level clients and the rest—and will select members for the reseller advisory board from each class so that the board has a good, representative cross section of clients.
The company will also be redoing the content and organization of the reseller resources section of its ViaVerio website to make it easier and intuitively obvious for users. "Frankly, that's a suggestion that comes anecdotally everyday from the resellers," says Bell. "We want to make the website easy to use and intuitively obvious so that if you have a problem you can get on the site, get what you need, or contact someone and get going."
The company will also refresh some of the forums in the solution guide found on the site and add new tools such as the "marketplace," a forum for resellers to post products or scripts they've written so they can share them with the rest of the reseller community and in some cases for profit from them. There will also be extra money for the marketing budget so that the message—resellers welcome here—gets out.
The renewed focus on the indirect channel has been pushed internally by Bell, who is relatively new at Verio having landed at the company just fourteen months ago. "I'm new to Verio but I'm not new to distribution. I put a lot of emphasis on reseller," he says. But so too have several other hosts, as industry participants have watched the reseller market post healthy gains. As a result, some companies that had previously abandoned the reseller channel have recently returned to the industry looking to pick up business where they left off.
That's a trend that Bell has watched first hand but one that he thinks hands Verio an advantage in reclaiming lost ground. "We're seeing some competitors come back to the indirect model but, frankly, how successful they're going to be is questionable. Their credibility is in question after having jumped around."
That's not been the case at Verio insists Bell, who claims the company has faithfully serviced the reseller sector through the years. "We've made investments and over the long-term I think our partners recognize that," he says. "Even through some of the turmoil that we've all seen in this industry we continued to put money into product development. We never quit developing new products and enhancing the existing ones."
The reseller business is obviously important to Verio, which boasts some 5,500 partners worldwide (spread across some 126 countries). There are far more reseller clients at the company than traditional agency-type clients, with the ratio standing at about five to one reseller to agency model.
That demonstrates that resellers and OEM programs are the backbone of the business claims Mona Peloquin, a senior communications executive with Verio, "You can see that when we say our channel strategy is part and parcel to our business strategy it's backed up in the numbers."
If the new focus—initiated at the beginning of the year—can bump up Verio's market share it would add to a string of recent successes for the company. Last year Verio managed to sign up 200 enterprise network and hosting partners including big application developers and Web integrators such as Internet Solutions, Avrion, and Aspen Grove. The company has also been busy in the federal space, adding Washington-based Advanced Technology Systems (ATS) to its roster.
"There's a tremendous initiative in the federal sector to refresh technologies. Some of the capital appropriations that came out through Homeland Security are trickling down into these agencies causing a significant push for outsourcing," says Cody Calhoun, channel program manager for the ViaVerio program.
The string of good news situates Verio well for the future according to Bell, who is already speculating about the next generation of services for resellers. "We're certainly seeing a shift from shared hosting to more application based hosting. I'm not saying we're doing this tomorrow but we can see the business getting more complex in an application-hosting model." says Bell. "To do that we're going to have to create different types of training, different types of support and therefore different types of marketing materials, but it's an evolution and that's a path that I think our resellers would like to see us go down."
Until then, Bell expects the new incentive programs should continue to build out the bottom line over the near term. "Growth is the key for 2004," says Bell. "Last year was good for us and I think we can do half as good again in 2004. In the first two months we're already ahead of the pace."
