Could Master VARS Be On Sage’s Roadmap?

On Friday Accounting Today reported that Sage partner Blytheco hired former Sage executive Lori Seal to become their new COO.

Seal replaces Ruth Menter who departed along with several other executives in early June 2012.

Blytheco is a perennial Sage partner-of-the-year award winner and was just listed at # 10 on the Accounting Today VAR 100.

Initially the buzz  has been that Lori Seal may be on board at Blytheco to beef up Blytheco’s SaaS capabilities. The company recently became a Netsuite authorized partner after many years of exclusively representing Sage products.

This is quite possibly her mission – however I’m wondering if this hire could signal a more strategic change in the Sage channel.

While Lori has about a year and a half of SaaS experience – the bulk of her work  (13 years) has been for Sage in the area of finance, strategy and corporate development.

This would be an ideal background for someone who might be tasked with further integrating more office locations.

According to the Accounting Today article – her initial areas of focus will be refining and helping with the rollout of the firm’s new “Blytheco 3.0” professional services delivery strategy.

Which leads me to ask this purely speculative question.

Could Blytheco be doing some advance planning thinking there may soon be a push by Sage to adopt a new(ish) channel “strategy” started by Microsoft where big important VARS are urged to become what has been termed a Master VAR.

In essence a Master VAR takes the place of the publisher for smaller VARS without becoming responsible for the consulting and daily expensive headaches of running a local practice.

Done properly this makes a lot of sense.

Growth of new license ERP sales has slowed in recent years and instead of preaching to hundreds of small VAR organizations publishers would gain more headway by working closer with a smaller number of large dedicated VARS – especially if cross selling into existing ERP users were to become a more primary and serious revenue source.

This excerpt from Redmond Channel Partner explains the Microsoft Master VAR program:

Master VARs are Microsoft-authorized Dynamics resellers who provide centralized services — including marketing and sales operations — to independently owned partner organizations known as Sales Affiliates (read RCP’s feature story on the Master VAR program here). Sales Affiliates conduct business under the Master VAR brand but retain access to their customers’ data and continue to serve those customers. Master VARs are authorized by Microsoft, and have a contractual obligation to deliver a set of services to their partner ecosystem. The relationship between Master VAR and Sales Associate, however, is independent of Microsoft.

Why would Microsoft or Sage adopt such a Master VAR program?

Controlling the direction and strategy of a small number of master VARS is theoretically cheaper, more effective and easier than trying to control thousands of little mom and pop VARS.

In recent years publishers have taken to directly (or indirectly) referring to many in their channel as “Lifestyle Consultants” – a  slur meant to indicate a partner who makes most of their revenues from consulting as opposed to sales of a software publisher’s licenses.

Establishing a Master VAR type program at Sage could significantly cut the internal costs of managing a large number of smaller partners while also tightening the relationship between publisher and partners who could be relied upon to create new license sales opportunities.

As of now this is merely speculation – but one that’s probably been given a fair amount of consideration by both publisher and VAR.

Full Disclosure: Wayne Schulz and Schulz Consulting are local office affiliates of DSD Business Systems who have a similar business practice and DSD Business Systems have also taken on Netsuite consulting after many years of being exclusive Sage partners. The opinions reflected above are solely his and do not reflect the views or opinions of any other organization.

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