Article

Tenrox enters the channel cautiously
eChannel Line , April 29, 2007

By Paul Weinberg

In a field where small software vendors tend to sell direct, Tenrox is taking a step-by-step approach toward recruiting channel partners for its workflow-driven project management software solution.

The small privately-held 100-person company has more than 800 customers in approximately 50 countries.

A channel strategy is a major selling point up against competitors in the mid-market, stated Randy Urquhart, director of product marketing and alliances at Tenrox.

"Project management was always marketed to the much larger Fortune 100 companies. But it is becoming more and more popular because of the nature of work, the way it has changed and how most organizations in some way, shape or form, are becoming very project driven, right from manufacturing to the IT services company."

Tenrox has three levels in its first channel program -- referral partners, consulting partners (generally management consulting firms) and IT resellers (selling software licenses and installation).

Urquhart stated that his company will probably recruit partners from the existing pool that it works with as part of ongoing relationships with larger vendors such as Microsoft, Sage and SAP.

"We already have several referral partners from those channels. We already do a lot of work in the ERP and CRM side of things."

Because of its small size Tenrox is not equipped to handle too many channel partners at present, explained Urquhart.

"[The channel] is something that we are going to tackle slowly. Obviously, having a 1,000 companies sign up as resellers is very difficult for us to handle at one shot. So, we will start them as referral partners and slowly get them ramped up so that they fit the bill and we can support them as resellers."

Urquhart added that project management is a field where small players can do well, especially in the mid-market.

"There have been a lot of acquisitions. A lot of our competitors have been acquired by much larger organizations. That is the nature of the software business. It makes room for the smaller vendors and they become the smaller competitors to us. Once they get acquired, they dissolve into a much larger company."

Meanwhile, an industry analyst who keeps a close watch on project management heartily applauded Tenrox's decision to sign up partners.

The development of a solution and its deployment in a specific site are really two different skill sets, stated David Hofferberth, managing director at Service Performance Insight.

Channel partners with substantial experience in project management and various licensed products on the market are better able to offer a fresh perspective to solutions in terms of best practices than is possible when a single vendor is engaged in the entire solution from top to bottom, he further explained.

"What the market has lacked and I have been covering project management for ten years, is that most of the companies that buy solutions from companies like Tenrox tend to have Tenrox do the deployment. There is some good and some bad associated with that. But I think the important thing is that the external customers would like a choice. Some customers would prefer Tenrox do the work, and other customers would prefer a partner that has a lot more domain expertise not associated with Tenrox."

The "more intelligent companies" across many vertical markets are starting to take a project approach to work, Hofferbeth noted.

"They have a methodology for assessing the project, the value of the project, the cost and so forth. It is really about the structure, management, control and execution of projects."

Among the major users of project management are internal corporate IT departments, he observed.

The integration of project management, resource management and people management are major trends in this field.

Tenrox, for instance, started off in providing a time and expense management solution and then subsequently over the past year expanded the portfolio to include project management and workflow, Hofferberth reported.

"To me, they are the workflow leaders in the market. Tenrox, built workflow on top to capture the financial information, time information, so forth. You really see the impact of the various processes, and how they impact time and cost, to complete work."