working on applications and technology

There 're different types of partners in the market, Usually we label the company with the products as the 'brand owner'. and the vendors which help the 'brand owner' sell their product as the partners.
In software industry, We usually devide the partners into two major category:

• VAD: value added distributor
• SI/ISV: system integrator/indepentdant software vendor, or partners who use our product to build solution or applications

VAD partner
Although in the long term, SI/ISV might be more important for software 'brand owner', VAD do play very important role in today's software market. They 're useful for the following reason:

• Risk management: a contract with VAD instead of the end user is more easy for various kind of legal or financial reason. VAD usuall do full pre payment before end user 's full payment. which reduce the risk that end user might not be able to make the full payment.
• Coverage: usually there 're only limited head count in the area(conuntry) for the software 'brand owner' , VAD act as if they 're employed by the company to work to sell the software. Of course, this action is not free, which is why 'brand owner' will allow a gap for the price given to VAD as that given to customer.

Incentive for VAD? is to allow for more gap between the VAD and the end user, or some kind of refund when they meet their assigned quota.
SI/ISV
Might be the most valuable partner is still the ISV, vendor which embed your product into their applications. The metephor for this partner relationship could be best described using the example for CPU manufacture and personal computer vendor, when HP or Dell sell one laptop, the inside CPU also get sell. Even the 'brand owner' of CPU might do nothing to help the selling.
It is easy to understand why we should give more margin to these kind of 'ideal partners'. But in the software business real world, There 're few 'ideal partners'!
With the appearance of the open software standard like J2EE, most of ISV 's solutions could run at almost every product from different software 'brand owner'.
So the factor that determine which product they want to use is seldom technical. they usuall care more product support, better revenue etc.
And that is why channel or partner management is so important, to influence the partner to use our product, which is the core value for partner business! Which might usually be overlooked by software company management.