Going Global

A number of factors are pulling resellers into other countries

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There was a point at which the London office of Microsoft probably wouldn't have known what Solomon is. That was even after Queue Associates, a New York-based Microsoft reseller, opened its office in England earlier this year "If you called Microsoft and asked, 'What Dynamics product do you represent?' they would say 'Great Plains, Navision, Axapta.' They wouldn't even have mentioned Solomon," says Goldstein. "Microsoft is now recognizing this as a legitimate partner."

Pushing Solomon, now called Dynamics SL, in Europe was a bit unusual-most Microsoft resellers that are going international are plugging Navision (Dynamics NAV) and Axapta (Dynamics AX). But whatever the flavor, several factors are driving organizations like Queue to extend their operations into other countries.

Like many companies that leaped across the ocean, Queue was drawn in by a client.

Partner Insights

"We were seeing global expansion by our customers in the U.S.," Goldstein says. That was a deal involving British Petroleum. The BP deal also brought Queue into contact with Kevin Finn, whose organization was acquired by Queue, with Finn becoming the technical director.

SystemLink-An Old Hand

While resellers are learning how to operate in other countries, SystemLink, an Accpac reseller, has a decade of experience that produces both clients and new staff.

The motivation was a familiar one.

"It came about as a need to support clients that we had overseas. We had an early success story with Accpac, where we got Exxon Mobile to standardize on it. They put in 50 sites in Africa, [and] we needed somebody in the local time zone," says Dave Beck, CEO of SystemLink USA.

Accpac has always had an international focus, since it was owned for years by Computer Associates International and later by the independent Accpac International, before its acquisition by Sage 2004.

The CA line had a global focus, and it had multi-currency and multilingual features, although it was strongest in English-speaking countries, including Australia, New Zealand, and South Africa. With CA pushing the product globally, "That was a real differentiator," says Beck

It is an advantage, because with many mid-market products, even those with multi-currency support, "Anything global was an afterthought," says Beck.

It was ten years ago that Beck joined together with Bill Williams to make SystemLink an international operation by establishing two companies with some shared equity but with Williams the primary owner of SystemLink England and Beck of the American unit.

"To some extent, it's more of an alliance," says Beck

The alliance is important because of the need to have knowledge about how overseas markets operate. Beck says that they have differ cashbooks, statutory accounts, "just the general way of doing business," he says. It would be difficult for an American to run a U.K. office and vice-versa.

The two SystemLink companies share marketing expenses, and also have an inter-company pricing structure. They share resources as well.

"If I am short resources, I can always look to the U.K. first. If they have available resources, we will fly somebody over here," he says. "Our employees see it as a perk. We send people over to the U.K. for training. The U.K. folks love to travel into North America."

The two companies also work together in recruiting in South Africa, where there is a pool of experienced people, many of who want to emigrate. They are good candidates because they have the Accpac experience but generally aren't client employees.

Beck agrees with other VARs that it's easier to get in the door of large enterprises overseas than it is in the U.S.

"In Europe, the bigger companies are a lot more willing to move down into the mid-market and leverage a lower-priced solution," he says. In the United States, companies seem to have a different drive in making purchases. "It's tied into your ego and your perspective. If you are a big company and want to be perceived as a big company, you might put in SAP, overpay and under-deliver," Beck says.

Going to the U.K. has had advantages. Where Queue might face numerous competitors in bidding on a job in the United States, it often faces no reseller competitors in business in London. "The competition is very light compared to what we have in the U.S.," Goldstein says.

Also, Queue can court much larger prospects than would be possible in the U.S.

In North America, with a company the size of British Petroleum, "We wouldn't be able to get an appointment, much less work with them," he says.

However, bigger deals require a different approach, since the Tier 1 companies and the larger of the Tier 2s are used to higher-end consulting.

"Although we are a mid-market size organization, we have to adopt a Big Four type of approach. That is one of the sea changes that you have to adopt," says Finn.

The biggest challenges come from cultural issues. Goldstein says that without a British partner like Finn, it would be difficult for New Yorkers to conduct business.

"I'm an outsider. I don't speak the same language. I don't understand their culture," he says. "People in New York are viewed as arrogant, as slightly pushy and aggressive."

However, the preference for the British way of doing business versus the American way can vary from country to country and city to city. In the former British colony of Hong Kong, the British way is in favor, says Finn. But in Shanghai and Beijing, he continues, "It's much more of an American influence."

That makes having staff of either background even more valuable.

Having operations in both countries also requires constant communication.

"It's a wholly integrated organization," says Goldstein. "Kevin and I communicate on a daily basis. We are constantly sending resources from the U.S. to the U.K. and we have resources in the U.K. helping in the U.S."

There have been resource issues. Because of the shortage of knowledge about Dynamics SL in the U.K., the company has cross-trained staff members who have experience in the other Microsoft products.

While Queue handles some deals involving Dynamics AX and GP, Dynamics SL is the core product because of enhancements that Queue has developed involving globalization and project accounting.

Queue will not stop with the U.K. The company is already expanding into Europe, with Finn working with the Swatch Group. Queue also recently completed an implementation in Shanghai, will soon be working in Hong Kong, and is pursuing several opportunities in the Far East.

However, expansion doesn't mean that a series of Queue offices will sprout up in other countries. Business on the European continent will continue to be conducted from the London office.

"The only place we may open up another office is the Far East," he says. That's largely driven by the difference in time zones, which is already being dealt with through Queue's partnering with other organizations in Asia.

There are several factors pushing VARs into the international market.

* An increasing number of clients have operations in other countries and require resources to support them there.

* The increasing power of mid-market products makes them suited for larger companies that are more likely operate worldwide.

* An increase focus on vertical markets requires covering broader geographies to find clients in those niches.

THE SAGE PERSPECTIVE

Historically, Sage has not seen much need for resellers to move from one country to another, because it acquires software subsidiaries on a country-by-country basis, due to local accounting regulations. The one exception has been Accpac, which was originally marketed as an international product.

However, that is changing.

"I probably get a call every other week from a partner in the U.S. that has an opportunity in the United Kingdom or in Europe," says Taylor Macdonald, the executive vice president for Sage Software. There are a lot of partnerships that come together to work on individual installations. But Macdonald predicts that these will more frequently grow into mergers or joint alliances, and will more often involve the MAS line, particularly MAS 500.

Having different accounting packages in different companies is also not a barrier to such ventures. Companies may use one Sage application in the United States and another overseas.

"They are happy to run MAS 500 in this county and Line 200 in the U.K. and do a consolidation," he says.

Among Sage resellers, Accpac VARs have had the most opportunities for overseas alliances, particularly because of that product's multi-lingual, multi-currency capabilities. But that, too, is likely to change.

"We'll put more emphasis on bringing more resources to those opportunities," Macdonald says.

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