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Hyperion Makes Nice To The Channel

CEO Jeff Rodek discusses Hyperion's approach to the channel and the importance of CPM.
Hyperion CEO Jeff Rodek is no stranger to the channel. He was the president and COO of Ingram Micro during some of its biggest years, including the late 1990s when Jerre Stead, the controversial chairman and CEO, was at the helm. In 1999, Rodek left Ingram for Hyperion Solutions. But, as he points out, he didn't leave the channel behind when he switched to the vendor company. Rodek believes partners are critical to Hyperion's success and says his company has a consistent track record over the past three years to back it up.

In an interview with VARBusiness senior editor Jeffrey Schwartz, Rodek discusses Hyperion's approach to the channel, the importance of CPM and the company's recent acquisition of Brio, which will be key to the company's growth moving forward.

VB: BI vendors are not known to be channel- friendly as other types of software vendors. Is that an accurate viewpoint?

Rodek: We have become much more partner- friendly in the past three years. As we've built our executive team--and we've had a pretty much wholesale change in the exec team since I joined--we've brought in executives who are much more channel-friendly.

VB: Can you qualify that?

Rodek: Three years ago, when we announced our tightened-up strategy, we came up with four key metrics. One was percentage of license revenue from our indirect partners. We set a goal of trying to get to 30 to 33 percent. In the most recent quarter, it was 29 percent. The second thing was much more emphasis on the systems integrators--tangible programs and changes to the associated rules of engagement for our sales force. Third, we made some tangible changes to our company in support of that. [For example], we substantially reduced the size of our consulting organization--we are now 40 percent license revenue, 40 percent maintenance, 20 percent consulting and training. In the Americas, we were a much higher percentage than we should have been in consulting and training. We reduced staffing in that area in two major ways: We eliminated a nonbillable staff that was selling consulting. We said we shouldn't pay commissions to people to sell consulting

VB: What led to that decision?

Rodek: Channel conflict. We said, "Let the customer choose how to be serviced." If they want to use us, great. If they want to use a partner, great. If they want us all to work together, great. But let the customer chose--don't be in there just aggressively selling against the partners.

VB: Did it lead to more license revenue as a result?

Rodek: We believe it did. I reported at [our user group] meeting a couple of years ago that we were already seeing the indirect revenue number go up. I pointed to the partners and showed them their indirect revenue contribution and thanked them because we took a bold move, of cutting that staffing, relying on our indirect partners to make that up in license revenue. We also got out of the customization of Essbase, pushing that more to partners.

VB: How do you see that mapping out moving forward?

Rodek: We can see continuing to stay with focused partners who are delivering results, continuing to refine and improve the rules of engagement, and [partnering] together to drive successful solutions for our customers. Now that we have many of these other things in place, now that business performance management is a distinct category of enterprise software by customers, we want to look at ways to go with making a new set of partners to try to get with an indirect model to get to midsize companies. We have 9,000 customers, the bulk of which are in the Global 10,000, and our direct-sales model is not ideal for selling into midsize companies. The midsize market is where the big money is, and we have to have an effective way to get to that community because there's a need for business performance management outside of the Global 10,000.