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July 14, 2004 


 Q&A: ADVIZOR Solutions CEO Doug Cogswell on the Art of Partnering 7/13/2004
The mission of Going Global is to educate and inform Midwest technology companies on what local technology companies are doing internationally so other firms can learn from the successes of like-minded peers.

DOWNERS GROVE, Ill. – This week, ePrairie international expert Michael Muth concludes a three-part Q&A with Doug Cogswell, CEO of Downers Grove, Ill.-based ADVIZOR Solutions, by delving into the selective screening and meticulous development of international technology partnerships.

Michael Muth: How did you develop a partnership with Eagle Technology in New Zealand?
Doug Cogswell: New Zealand wasn’t one of our target markets. However, Eagle is the No. 1 business objects partner in that region.

We met them at a business objects partner show in the U.S. a year ago. They approached us. We had a lot of phone conversations. They wanted to sell our product as a nice add on. We believed they were capable.

After lots of phone discussions and Webinars to make sure they could handle and support us on a remote basis, we signed an agreement six months later. They passed our test.

When they signed our reseller agreement, they paid us some up-front money. That supported us sending people there for a week to do sales and technical training for their team. We knew they were committed when they stepped up and paid money.

Since then, they’ve received technical support over the phone. We’re in dialog with them all the time. If we send anyone down there, it’s on a for-fee basis to serve a customer. They get it. They can sell.

MM: How did you develop a partnership with ISS in Taiwan?
DC: We just had the same thing in Taiwan with ISS. They are in the network security and intrusion business. They found us on the Internet and called us. We asked a bunch of screening questions. We got the detail and comfort level we needed.

We told them they had to sign our reseller agreement, pay us some up-front money and then we’ll send somebody over for training. They signed the agreement.

One of our trainers is going over there for a week. It’s very similar to Eagle. They were looking for data visualization and found our Web site. We are pretty hard on screening because we don’t want to go there if the partner isn’t going to be very productive. We’re not going to do this casually.

MM commentary: I believe ADVIZOR is exceptional here. By paying attention to what could have been perceived as distractions, they’ve developed some great revenue-producing potential. Many firms would not have bothered to respond to the Kiwis and Taiwanese because they are too small and too far away.

MM: How did you develop a partnership with Hildebrando in Mexico?
DC: Like Eagle in New Zealand, they saw us at a business objects conference. They have several thousand staff and are one of the biggest business objects partners anywhere.

While they are moving at the same rate as Eagle, they are further ahead in a bigger market. Sales results are better and it’s easier to go to Mexico to support them. You can do day trips from Chicago and it’s in the same time zone. That’s a lot easier than New Zealand, which is 15 hours off.

Spanish isn’t an issue. You’re dealing with bigger companies. They all speak English. We go to people who make decisions and they all speak English. The underlying data is in Spanish. Most of the screen looks like their native language.

MM: How did you develop a partnership with KD Labs in Switzerland?
DC: The CEO is the former chief scientist of a Boston-based company. We’ve been working with him from way back in our Bell Labs days. Though KD Labs is smaller than some of our other partners, they get it, are very sophisticated and have the connections.

MM: How did you develop a partnership with Oculus in Canada?
DC: The CEO is a former employee who formed a data visualization consulting company. Oculus does custom projects for the government and big banks. We’ve brought in their consultants to sub on our projects when we’re short staffed.

MM: Who are your biggest regional solutions partners?
DC: Ematrix in the United Kingdom, Eagle and Hilldebrando are the biggest.

In New Zealand, Eagle dominates the New Zealand and Australia business intelligence market. They’re the big fish in the small pond. In the United Kingdom, Ematrix is the small fish in a bigger pond. They are very solid and very committed to ADVZOR.

In the United Kingdom, we will likely add a couple additional partners. It’s a 60-million population country that has a diverse economy. However, we will leverage Ematrix and their team when we do this. We may use them as a distributor to provide strong in-country support, technical assistance and training.

New Zealand is nowhere as big. One partner can cover it. Eagle has been a very good partner. The relationship is easy because they’re self starters so they’re not putting a drain on us. All three of these partners have their own personalities that mirror the cultures in which they operate.

MM commentary: It’s instructive here to not ignore the small guy. Eagle is generating as much in revenues as Ematrix. The big fish in the small pond can be as lucrative as the small fish in the big pond.

MM: Is each an affiliate, VAR, distributor or OEM partner?
DC: I’d call them all VARs.

MM: How many potential international partners fill out your online form? What percent of them are credible?
DC: We just put up the form last week so what you found are some of the questions we’ve been asking. We don’t know. We hope we’ll get people filling out the form to make the initial screening easier.

It’s especially important with language issues. The more we can get in writing, the less chance there is for confusion.

MM commentary: While it is a tool that can filter out the tire kickers, I’d be surprised if many well-qualified partners discover ADVIZOR this way.

MM: Speaking of language issues, what advice can you give about communication?
DC: We try to do everything in writing. While our international partners generally speak English very well, it’s often not their native language. In addition, different cultural norms mean the same words can mean different things.

We can get in trouble if we aren’t very clear. For example, we had a problem when one of our staff agreed on a special discount to get a new deal closed (some cultures are used to “bargaining” more than others). We meant this to be the total discount.

The partner thought it was just for the customer and they applied their VAR discount on top of it. The document trail wasn’t clear. Though we split the difference with the partner on the “extra” discount to support the partner, we actually lost money on the deal.

That’s where not being clear gets you in trouble. We’ve learned and improved our process to show all discounts on every quote and to enforce standard written formats.

Additionally, the relationship is very, very important. You have people handling these things. Stuff is going to mess up. It’s important to meet all your key partners and build a relationship. That way, when there are problems or confusion, you can work them out as we did with the discount issue.

The relationship is more important than what we lost in that one deal.

MM commentary: Royal Dutch Shell (based in the Netherlands), Siemens (based in Germany) and many Fortune 1000 companies from non-English-speaking countries have standardized on English as their official company language. Microsoft tends to use e-mail and the Web rather than the phone and voice mail to avoid the vagaries of “he said/she said”.

MM: What are your revenue goals for your partners?
DC: Our per-quarter revenue expectation is a minimum of $50,000 per partner. It’s in the agreements.

While it’s not legally binding, it is the clear expectation. We just started this program a year ago. Several of our partners are operating at this level. Our partners need to get to a level like this to make it a win-win situation and keep our teams focused on moving forward. Less than this just isn’t worth it for us.

MML What’s your price point?
DC: Starter proof of concepts go for between $10,000 and $15,000, 10 analysts go for $20,000 and server deployments go for $50,000 or more. Services are additional.

The sales cycle is six to eight months. The first piece comes after a month or two, the next piece comes three to four months later and the last piece comes at eight months. Six-figure add ons to existing customers come fairly quickly. This is very attractive to our partners. That’s our process.

Michael Muth is managing director of GATA, an international business development consultancy that helps technology companies build international partnerships. He can be reached at mike@intlalliances.com.
Click here for Muth’s full biography.

Previous Columns:
Q&A: ADVIZOR Solutions CEO Doug Cogswell on BP, AstraZeneca Wins (7/6/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on Global Software (6/29/2004)
Q&A: CEO Terry Howerton on Why Chicago, Ukraine Made FastRoot (6/22/2004)
Q&A: FastRoot CEO Terry Howerton on Blended Chicago Approach (6/15/2004)

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