The company experienced 50 per cent growth in its North American sales in 2010, and according to the company, much of that revenue growth came from channel partners. In Canada, the company has built its channel from scratch over the last three years, starting from little to no business in Canada to a region that now consists of 15 per cent of its overall sales.
“I think one of the things that we’re doing is we stay connected with our VARs through numerous ways. One way is we do regular communications via email,” said Todd Rychecky, vice president of North American sales and marketing at Opengear. “We offer webinars for our VARs for training about once a quarter. We try to release lots of new products.”
With half a dozen fairly large competitors, Opengear has tried to differentiate itself by using open source software as the foundation of its solutions, but Rychecky also said that it continues its growth by continuously releasing new products.
The company relies on a single-tier distribution model, and although that creates extra work in managing individual partners, Rychecky said it means he doesn’t hear the complaints that other vendors do in relation to discounts and low margins. Instead, Opengear is forthcoming about its margins (they’re 25 per cent, Rychecky said), and there are no plans to work with distributors, even as the number of partners continues to grow.
With about 75 Canadian partners, Opengear has a fairly aggressive marketing campaign that Rychecky is hoping will double that number in the next year or two.
“You know, you’re always looking for new VARs. Some drop off. Some aren’t active. Some are very active. I’d like to grow that business 50 to 100 per cent,” Rychecky said.
With the vendor’s business in Canada growing, most of the business is coming from Toronto and Montreal, followed by Vancouver and Calgary, but some of its solutions (including 3G cellular-related solutions) are attracting customers in the more remote locations in Canada. Rychecky noted that a VAR recently closed a major deal in the Northwest Territories. Much of the company’s growth in Canada came from its line of cellular smart routers, he said.
“I think it’s important for us to continue to release new products. That always generates new buzz, new opportunities and new vertical markets to get into,” Rychecky said.
Although Opengear does have aggressive expansion plans for the Canadian market, the goal is not to be over-distributed, but instead work with select VARs.
“I don’t want to get to a point where we’re selling through a two-tier distribution model. I think what we’re doing right now is pretty effective,” Rychecky said.