VB: How do you change the sales team's mindset?
Chuang: You start with compensation. If our compensation is channel-friendly, you can get there.
VB: How much are you investing in the channel?
Chuang: It is big money. We have 300 to 400 people in the company involved in channels now, compared to 500 in our direct sales force. And I have an expectation that [the channel team] will exceed the number of direct sales guys before the year is even over.
VB: Provide some insight into the Agilysys alliance, your first distribution partner.
Chuang: I think they and many others do several things for us. There's a new generation of [VARs/VADs] out there that are creating business and adding value. For the longest time, we talked about the no-value-added resellers, people moving boxes, which is the world I came from during 10 years working for Sun. I want a different level of partners that add really significant value, whether it's custom integration work or them having their own value-added product to sell along with ours. Agilysys adds unique value to customers. They don't just say, "We are a BEA reseller." They give you solutions at the end of the day. And that's what we need. How many verticals can I cover? I'm going to need a lot of these distributors and resellers that specialize in verticals.
VB: What kind of partner ecosystem are you going after? Is it quantity or quality?
Chuang: Year 1, it has to be quality. The quality of the sale itself from resellers is extraordinarily important. So they will need support from us. If we don't give them proper support along the way, we won't succeed. I can get guys to go sign up 300 VARs across North America today, but they won't do jack. The way to do this right is to sign up the quality you want and let them proliferate, let others sign on around them to sell products, and I think the ecosystem then grows in a very high quality fashion.
VB: Will your model remain primarily co-selling and heavy touch?
Chuang: The initial round will be a lot of co-selling, especially with ISVs who embed our product. In the long run with VARs, however, that won't be the model because it won't scale. You can't expect to pair enough people to help them on every deal. That means with some products we will be super hands-off, like the application server. But some products need a lot of hand-holding, like integration, and you have to be very selective about who you work with. [Integration] will be much lower volume, much higher margin. The ultimate goal is there be a large portion of our sales that we will not touch at all.
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