Avaya introduces Avaya Edge, its new partner program

Avaya has designed its new partner program, Avaya Edge, to reflect both its transition towards a software and services model, and the evolution of its channel partners. It listened to partner feedback from across the globe and, as a result, prioritized simplicity, consistency, and partner segmentation as the foundational aspects of the program.

Avaya Edge will offer more partner recognition

Segmentation is one of the key design principles of the Edge program, as Avaya aims to improve recognition among partners and reward those that are growing with Avaya strategically instead of opportunistically. Avaya estimates that 30 percent of its partners are dormant, a number it looks to reduce, while offering more rewards to its loyal and growing partners.

Unlike the program that it replaces, Avaya Connect, Edge will offer six tracks, based on the partners’ go-to-market models, rather than on the products that they buy. These include Enterprise VAR, SMB/Mid-market VAR, SI/SP, Distributor, Cloud, and DMR. Across these tracks, partners will still be able to sell any of Avaya products and solutions that they are authorized to sell. Rather, the tracks help Avaya align more closely with partners’ needs. For example, Avaya’s DMR partners do not rely on leads as much as the rest of its partner community, so setting up a DMR-specific track with tailored benefits and requirements would ensure that the partners’ go-to-market model is reflected in the structure of the new program.

Compared to Avaya Connect, which followed a four-tier structure, Avaya Edge will have three gemstone levels: Authorized partners from the Avaya Connect program will become Emerald partners, Gold and Silver partners will be consolidated into one level, Sapphire, and Platinum partners will be Diamond.

In addition to segmentation, Avaya is aiming to simplify its program’s design, particularly the requirements and rewards for each tier. There will be three requirements under the Edge program—credentials, total revenue, and customer satisfaction—with a strong emphasis on annualized service revenues, which will be recognized toward revenue goals, and on attracting new service customers. Country zones will remain the same as under Avaya Connect, and the requirements will vary based on zone.

Avaya will continue to offer sales and marketing benefits, as well as technical benefits, but it has made some changes to the financial benefits, which are split into three categories: foundational incentives, rebates, and transactional incentives. Foundational incentives encompass benefits such as MDF, deal registration with lowered thresholds, additional discounts for bringing in new logos, and lead generation. Transactional incentives refer to business-to-business and business-to-consumer incentives, such as discounts, promotions, special bids, and specialized programs. Promotions will be aligned with the program’s tracks.

In terms of rebates, Avaya has increased the funding that will be available to partners that are growing in FY17. Growth-performance rebates will be based on product and service revenue and will be made available to Diamond partners only, which shows Avaya’s commitment to reward the top level of the program. Partner performance incentives will also be available only to Diamond partners. In addition, new incentives will be made available to all partners, such as rebates based on new product adoption and solution growth. This will be a major shift from Avaya Connect, which offered only one rebate model just to its top partners.

Avaya plans to introduce an incentive point system in the second quarter, in which partners will be rewarded for achieving growth in strategic areas. Since an important lever in the new partner program is the adoption of new solutions, their point value will be higher relative to the company’s current offerings. As Avaya introduces new products, such as cloud solutions, partners will have the opportunity to quickly earn benefits as they bring these new solutions to market, and thus will earn more recognition.

Avaya’s partner community will encounter both challenges and growth opportunities under Edge

As the transition from metals to gemstones is completed, the partners that will be most impacted are Silver partners. Most of the benefits that will be available for Sapphire partners will be based on the benefits that Gold partners had access to under Avaya Connect, meaning that Silver partners would effectively be promoted to the same level as Gold. Some benefits will no longer be available for Sapphire partners under Edge, such as the Partner Performance Incentive, while other benefits, such as eligibility for growth-based rebates, will be added.

Avaya’s decision to collapse the Silver and Gold levels into one tier seems reasonable, especially as there are only roughly 250 Silver partners and around 100 Gold partners worldwide. However, achieving the Sapphire level in the future might become harder for Silver partners, depending on the differences in credentials and revenue requirements between the Silver and Sapphire tiers, which will be divulged in December 2016. A portion of Silver partners might fall into the Emerald tier if they do not qualify for the Sapphire level.

Sapphire partners who wish to become Diamond partners will have access to a simplified promotion path, which might help mitigate the effects of combining Gold and Silver partners into one level. The introduction of semi-annual assessment cycles under Edge will help Avaya evaluate partners on a more frequent basis and thus reward or even promote the high-performing partners in the Sapphire tier. However, this will also add to the administrative burden for partners if Avaya makes the assessment process too onerous.

In order to ensure partners maintain their existing medal tier or even receive a promotion, Avaya will implement a dual-evaluation cycle under the criteria of both Avaya Connect and Avaya Edge while the transition to a new partner program is taking place. If there is a difference in terms of the partner’s program level, the partner will be rewarded the higher level for six months. By adopting this approach, Avaya hopes to fuel partners’ business growth and prove its trust in its partner community.

Through its new partner program, there is a risk of Avaya over-emphasizing the growing software and services segment of its business, which could undermine the continued importance of its hardware-focused partners. As Avaya transforms into a software and services company, it must ensure that it is helping partners in their own transition by providing them with strong incentives and attainable objectives, especially as it introduces new products to the market.