2017 - 2018

Partnerships Offer Pros and Cons for Automation System Integrators

Vance VanDoren, CONTROL ENGINEERING -- 12/15/1999
Anyone who has ever taken a car, a PC, or a sewing machine in for repairs knows that some service options are better than others. When replacement parts or product-specific expertise are required, the best choice is often the original vendor or one of the vendor's "authorized" service centers. These are typically independent service contractors who have been trained, supplied, and endorsed by the product's vendor.

A similar arrangement is available in the industrial automation industry. End-users can get design, implementation, and maintenance services for their automation projects from product vendors and system integrators. "Authorized" system integrators specialize in applying products from specific vendors. They typically work directly for the end-user but may also receive some portion of their compensation from the project's suppliers.

Partnered yet independent
Unlike the service center at a car dealership, however, authorized system integrators are generally not exclusive to a single vendor. The integrator listings on pages 28 through 115 show several that have been endorsed with the seal of approval from as many as six competing vendors. In fact, system integrators generally relish their independence. Their ability to solve a client's problems by selecting the best possible solution from all the available products is one of the key benefits of hiring an outside integrator in the first place.

Some of the more fiercely independent integrators will even forgo a vendor's formal endorsement despite being fully qualified to bear the "authorized" label. They fear that partnering with specific vendors could jeopardize their objectivity, at least in the eyes of the end-user. They may also be wary of becoming too closely associated with a vendor that offers system integration services of their own.

Andy McMillan, marketing manager at Think & Do Software (Ann Arbor, Mich.), encountered such reservations while assembling Think & Do's network of system integrators called the WILD Bunch, Wizards of Integration Leadership and Design. He discovered that "in the software world, the software supplier eventually learns the identity of every end-user through the software registration process. Software suppliers who maintain their own integration arm have strong incentive to use that data to 'steal' accounts from outside integrators."

What's the point?
Whether or not their intentions are so nefarious, some vendors do end up competing with their integrator partners on occasion. Rockwell Automation (Mayfield Heights, O.), the Foxboro Company (Foxboro, Mass.), Moore Process Automation Solutions (Spring House, PA), and Cutler-Hammer (Milwaukee, Wis.) all maintain integrator partnership programs as well as their own system integration departments.

So why would a system integrator want to join such a partnership anyway? For starters, competition is not always an issue. Think & Do's Mr. McMillan notes that, "we offer our integrators freedom from any concern about getting bit by the hand that feeds them. We develop the very best software, but that is all we do - we don't do system integration ourselves."

Rockwell Automation, on the other hand, does have an Engineered Systems and Services Group (ESSG) designed to meet the system integration needs of their customers. However, ESSG is just another integrator partner as far as Rockwell's new Solution Provider Program is concerned. According to channel program manager John Nesi, "They've had to fulfill all the same qualifications as an outside integrator, and they're treated just as if they were."

Plenty of perks
There is also a wide variety of direct benefits available to system integrators who choose to partner with their favorite vendors. See the table "Benefits of Authorization." Public relations manager, Val Cureton, at Adept Technology (San Jose, Calif.), cites a lengthy list of benefits from her company's partnership program including "co-op marketing programs, product discount levels, integrator conferences, previews to new products, product development input, cooperative selling, product training and access to Adept application engineers." What more could an integrator want?

How about face-to-face contact with both product developers and end-users? Laura Authier in the automation integration software product marketing department of Agilent Technologies (Palo Alto, Calif.), says that her company sponsors an annual conference to gather experienced integrators, end-users, and software developers together in one room. "These conferences feature unprecedented access to the people who design and build our software. Partners and end-users are able to talk to developers to get more insight into our software's architecture, and to get answers to their questions."

Michelle Chaput, marketing communications manager at Imaging Technology Inc. (ITI in Bedford, Mass.), emphasizes the financial benefits of joining her company's Systems Integration Partners Program. "We provide extensive training on our products at no charge to our partners, unlimited technical and engineering support, application evaluation assistance, and advance release copies of our software for beta testing and partner recommendations. We believe our pricing is extremely competitive, allowing the integrator to make his business a success. We also offer special advertising opportunities, and we promote trade shows for them by paying for the corporate representation and allowing the system integrator to work the booth and get their own leads."

Sequencia Corp. (Phoenix, Ariz.) takes the benefits of training and cooperative selling one step further. Charlie Marshall, Sequencia's global director of channels, calls it "sales training boot camp." His integrator partners (appropriately called "solution providers") learn how to sell and position the Sequencia product suite as well as how to use it. Then when the time comes to present the product to a prospective client, Sequencia assumes the sales responsibility and pays the solution provider a finder's fee for providing the opportunity.

Too much of a good thing?
Overall, the advantages of joining a vendor's partnership program seem to outweigh the disadvantages. Partnership programs and their membership roles have proliferated dramatically in recent years. More than 50 automation vendors have established partnerships with as many as 2000 integrators each (see table on previous page).

Naturally enough, some programs have experienced growing pains. One PReferred Integrator of Systems for Moore (a PRISM partner) notes that "Moore used to give out PRISM memberships willy-nilly until it got them in trouble. Some under qualified PRISM partners couldn't get their jobs done and Moore had to save the day. They've since gone back and hacked the membership roles. They scrutinize new members more carefully now." In fact, Moore's PRISM roster has dwindled to just 60 worldwide. "We've limited the membership to a number we can adequately support while providing adequate geographic, industry, and application coverage" says Bob Staples, Moore's Director of Business Development.

Other vendors have been selective about their partnerships right from the start. Xycom Automation (Saline, Mich.) initiated their Open Control and Visualization System Integrator Program just this year with less than a dozen participants. "This is a limited program focused on vertical industry markets," says Steve Henry, vice president of sales.

Cutler-Hammer (Milwaukee, Wis.) has also launched a new partnership program this year. Russ Simpson, manager of system integrator sales, notes that "we employ a 'less is more' strategy in the selection and certification of our integrator partners. This means that we make a larger investment in our limited number of partners than might be the case with other programs." That translates to a current partner count of 17 with a final goal of 50 to 75.

Some more authorized than others
Some vendors have found that segregating their partners into several categories also helps them focus their energies on the most productive relationships. For example, Iconics (Foxborough, Mass.) has two types of partners: regular system integrator partners (SIPs) and preferred system integrator partners (PSIPs). Chris Volpe, managing director for Iconics U.K. admits that Iconics has limited resources so they can only work closely with PSIPs. Regular SIPs get discounts but no extra technical or sales support.

The integrator partnership program at Intellution (Norwood, Mass.) has recently been divided into three tiers. According to strategic alliances manager, Tony Bustamante, integrators can now sign up as regular "automation partners" when they first join the program. From there, they can become "solution partners" by training their personnel to apply Intellution products then completing a number of product-specific projects. The top level of the Intellution program is for "premier" integrators. "This new level will be restricted to a limited number of partners that will have access to advanced training and support from Intellution," says Bustamante.

Likewise, Rockwell Automation is in the process of redesignating all current partners into three new "solution provider" categories. "The engineering solution provider is most effective in emerging or developing markets outside the U.S." says Dan Hartnett, director of Rockwell's Solution Provider Channel Programs. "The technology solution provider is a technology expert that will work with product-related solutions, and the application solution provider is a professional consultant with system application experience and industry expertise." Rockwell's Mr. Nesi adds that some current partners may end up in the "former partner" category if their relationships with Rockwell are found to be unproductive.

A similar housekeeping effort is in progress at USDATA (Richardson, Tex.). According to marketing director Georgia Harrison, the principal purpose of having what they call "certified integration partners" (CIPs) is to provide customers with the expertise required to implement a USDATA solution in the best possible way. That includes ongoing support. CIPs that have not been good about following up with their clients after the initial project is complete are not being renewed.

Authorization isn't always easy
Some integrator programs have grown as large as they have by accepting every applicant who claims to be a system integrator. Others require considerably more from their would-be partners. See the table "Qualifying for Authorization" for a list of some of the qualifications that integrators must meet to join a vendor's partnership program.

National Instruments (NI in Austin, Tex.) has a particularly rigorous admissions policy for its Alliance Program. Program manager Jack Barber describes the application process: "They must complete an application, pay a nominal fee ($100), find an NI sponsor (usually the local sales manager), and spend a year as an associate member—a trial period to become trained and successful with our products—before we fully recognize them as a member. This may sound a bit harsh to newcomers, but you must understand that at the maturity of our program, we are more interested in quality than quantity of our Alliance members."

The CubeClub sponsored by Cube Technology (Milford, Mass.) is equally exclusive. "CubeClub is a virtual corporation of companies sharing the same approach to the manufacturing software market," says marketing manager Mariella Pelosi. "CubeClub partners must adopt Cube technology both as a basis for their technical proposals and as a methodology to face the overall complexity of a manufacturing system project." On top of that, Cube requires its partners to acquire Cube software, send their sales and technical personnel to Cube training, transform their application and industry expertise into a product, and sell a minimum amount of Cube products each year.

Vendors and users benefit
Cube Technology is not the only vendor looking for increased sales through integrator partnerships. After all, a system integrator who knows and likes a particular product line is much more likely to generate repeat sales than any single end-user. Ashesh Kapur, marketing manager for channels at Honeywell IAC (Phoenix, Ariz.), is developing a network of integrators called the PlantScape Solution Program. He says, "We are looking for partners that have core competencies in key market segments and who can help us to broaden and extend our reach in the process automation marketplace."

So what's in it for the end-user? "A better overall solution," says Rockwell's Mr. Nesi. "Our program is a formal channel program as opposed to a commercial program. This creates a higher level of consistency in terms of technical knowledge and application experience." Honeywell's Kapur takes that idea one step further. "The training and support that we provide enables our partners to be knowledgeable and competent in implementing solutions based on our software. They receive the Honeywell seal of approval to implement high-quality services on our behalf."

Skeptics may wonder if the "best overall solution" actually means the best solution an integrator can devise with a particular vendor's products. After all, vendors provide their partners with special training, discounts, and sales support for a reason. They'd like their products specified into every one of their partners' projects. However, authorized integrators are not always so biased towards their sponsors, says Dan Shartle, a system integrator program specialist at Phoenix Contact (Harrisburg, Pa.). "Our group uses the best fit for the application regardless of type or brand. We promote and utilize other vendor authorized programs."

Other points of view
Vendors generally agree that the end-user is the ultimate beneficiary of integrator partnership programs. How those benefits are realized, though, is subject to some debate. Some vendors offer their clients cost savings by discounting orders placed by an authorized integrator. Cutler-Hammer's Mr. Simpson reasons that limiting his program's membership is what makes it so effective for the end-user. "With a small number of integrators, we anticipate more projects per capita than may be true of other programs. More projects means more commitment from our partners, and it shows in their depth of understanding and enthusiasm to provide solutions."

Technique is the key at Nematron (Ann Arbor, Mich.). Integrator program director, Jim Thomas, notes that "we require our certified system integrators to be trained by Nematron, and we require that they have a documented project methodology in place. This will ensure that Nematron certified system integrators provide quality results to the end-user."

Scott Smith, market manager for industrial and medical products for Elo TouchSystems (Fremont, Calif.), thinks the end-user gets the most benefit from an integrator who has a thorough knowledge of the available technology. "All of our program activities are designed to help the control system integrator become an expert in touch solutions for the industrial market customer. As we reference customers to our control system integrator partners, it is extremely important that our partners fully understand touch technologies and make correct product recommendation to the customer."

However the process works, it would seem that vendors with strong partnership programs help their integrators do better work and make their common customers happier. That's the conventional wisdom, anyway. John Miller, system integration manager at Parker Hannifin (Mayfield Heights, O.) sees his program somewhat differently. "We prefer to use the term 'endorsed' rather than 'authorized'. We feel that these are professional companies that have established themselves in the industry. It would be very presumptuous of us, or any manufacturer, to say that the systems integrators are 'authorized' when it is they who are the experts and the value added service provider to our common end customers." Good point.


Qualifying for Authorization
What does it take to join a vendor's system integrator partnership program? Here's a composite list of qualifications that many vendors look for in new and current partners. Note: Not all of the following apply to all integrator partnership programs.

Business qualifications

  • Self sufficiency
  • Sound financial practices
  • Stable financial standing
  • Compatible business interests
  • Good customer relations policies
  • Minimum number of years in business
  • Minimum size (annual revenue and/or head count)
  • Identifiable customer base with ongoing relationships
References
  • Credit references
  • References from distributors
  • Good reputation in a targeted industry
  • References and project success stories from customers
  • References and/or approval from the vendor's sales force
Technical skills
  • Minimum scores on proficiency tests
  • Proven, documented project methodology
  • Current knowledge of the vendor's products
  • Application expertise in targeted industries
  • Policies for meeting minimum quality standards
  • Competence with the vendor's products (both current and future)
  • Experience with related products, technology and applications
  • Technical expertise in targeted technologies and specific product areas
  • Successful completion of a minimum number of projects involving the vendor's products
  • Ability to understand customer's requirements and translate them into a detailed specification
Financial commitment
  • Annual fee (as much as $1500)
  • Demo equipment (generally at reduced rates)
  • Current software versions (generally at reduced rates)
  • Minimum annual sales of the vendor's products (as much as $25,000 annually)
Other requirements
  • Preference for the vendor's products
  • Successful completion of a probation period
  • Time for technical and sales training (both initially and on-going)
  • Commitment to the program and a productive working relationship with the vendor

Benefits of Authorization
Partnerships with system integrators help vendors increase their sales. End-users benefit from the product-specific expertise that authorized integrators bring to a project. Integrators enjoy all the benefits of the vendor's products. In addition, integrators can expect a wide range of perks and privileges such as the following. NOTE: Not all of these benefits are available from every integrator partnership program.

Business development

  • Project financing
  • Incentive programs
  • Customer referrals
  • Free software upgrades
  • New market penetration
  • Special payment options
  • Free development software
  • Expedited order fulfillment
  • Subcontracting opportunities
  • Preferred pricing and product discounts
  • Project opportunities within the vendor's own plants
Sales and marketing support
  • Joint sales calls
  • Cooperative advertising
  • Use of the vendor's logo
  • Shared trade show booths
  • Literature and hand-outs
  • Professional marketing expertise
  • Demo equipment (on loan or at a reduced price)
  • Listings and hot links on the vendor's web site
  • Prestige of being endorsed by an industry leader
  • Success stories published in the vendor's newsletter
  • Technical writing assistance for trade magazine articles
Information exchange
  • Customized training
  • Technical conferences
  • Product development input
  • Beta testing opportunities
  • Business development seminars
  • High priority technical support
  • Printed and electronic newsletters
  • Direct access to product designers
  • Sample solutions to common problems
  • Application and implementation tips
  • Exposure to the vendor's entire organization
  • Advanced notice and previews of new products
  • Application evaluation and engineering assistance
  • Interaction and collaboration with other integrators
  • Access to detailed information about software bugs and fixes
  • Private web site for communicating with the vendor and other integrators

Automation Vendors with System Integrator Partnership Programs
ABB Industrial Systems (New Berlin, Wis.) http://www.abb.com/
Action Instruments (San Diego, Calif.) http://www.actionio.com/
Adept Technology (San Jose, Calif.) http://www.adept.com/
Agilent Technologies (Palo Alto, Calif.) http://www.agilent.com/
AspenTech (Cambridge, Mass.) http://www.aspentech.com/
B&R Industrial Automation (Roswell, Ga.) http://www.br-usa.com/
Brooks Automation (Chelmsford, Mass.) http://www.brooks.com/
Ci Technologies (Charlotte, N.C.) http://www.citect.com/
Cognex (Natick, Mass.) http://www.cognex.com/
Cimetrix (Salt Lake City, Ut.) http://www.cimetrix.com/
Control Techniques Drives (Chanhassen, Minn.) http://www.ctdrives.com/
CRS Robotics (Burlington, Ontario, Canada) http://www.crsrobotics.com/
Cube Technology http://www.orsiweb.com/
Cutler-Hammer http://www.cutlerhammer.com/
DVT (Norcross, Ga.) http://www.dvtsensors.com/
Echelon Systems (Palo Alto, Calif) http://www.echelon.com/
Elo Touchsystems (Fremont, Calif.) http://www.elotouch.com/
Eurotherm Drives (Charlotte, N.C.) http://www.eurotherm.com/
FESTech Software Solutions (Findlay, O.) http://www.festech.com/
The Foxboro Company (Foxboro, Mass.) http://www.foxboro.com/
GE Fanuc Automation (Charlottesville, Va.) http://www.gefanuc.com/
Gensym (Cambridge, Mass.) http://www.gensym.com/
Honeywell IAC (Phoenix, Ariz.) http://www.iac.honeywell.com/
Iconics (Foxborough, Mass.) http://www.iconics.com/
Imaging Technology (Bedford, Mass.) http://www.imaging.com/
Intelligent Instrumentation (Tucson, Ariz.) http://www.instrument.com/
Intellution (Norwood, Mass.) http://www.intellution.com/
Intermec Technologies (Everett, Wa.) http://www.intermec.com/
Keithley Instruments (Cleveland, O.) http://www.keithley.com/
Metra Corporation (San Clara, Calif) http://www.metra.com/
Moore Process Automation Systems (Spring House, Pa.) http://www.moore-solutions.com/
National Instruments (Austin, Tex.) http://www.ni.com/
Nematron (Ann Arbor, Mich.) http://www.nematron.com/
Opto 22 (Temecula, Calif.) http://www.opto22.com/
Parker Hannifin (Cleveland, O.) http://www.parker.com/
Phoenix Contact (Harrisburg, Pa.) http://www.phoenixcon.com/
Rockwell Automation (Mayfield Heights, O.) http://www.automation.rockwell.com/
Rockwell Software (West Allis, Wis.) http://www.software.rockwell.com/
Schneider Electric (North Andover, Mass.) http://www.schneideralliances.com/
Sequencia Corp. (Phoenix, Ariz.) http://www.sequencia.com/
Siemens Energy & Automation (Alpharetta, Ga.) http://www.sea.siemens.com/
Steeplechase Software (Ann Arbor, Mich.) http://www.steeplechase.com/
Think & Do Software (Ann Arbor, Mich.) http://www.thinkndo.com/
Universal Dynamics Technologies (Richmond, British Columbia, Canada) http://www.brainwave.com/
USDATA (Richardson, Tex.) http://www.usdata.com/
Wonderware (Irvine, Calif.) http://www.wonderware.com/
Xycom (Saline, Mich.) http://www.xycomautomation.com/


© 2004 Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.


Sidebars
  • Qualifying for Authorization
  • Benefits of Authorization
  • Automation Vendors with System Integrator Partnership Programs



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