Paul Greenberg, president and founder of consultancy The 56 Group, says he finds Eloqua's plea of IP protection to be disingenuous. "Every company has IP," he argues, adding that this demonstrates "a profound lack of trust in partners." (Partnership with TPG's Culbert happens to be something Greenberg has firsthand experience with: The two men are on the management team of BPT Partners, a training and consulting firm.)
The ties between TPG and Eloqua actually run far deeper than those in most reseller arrangements. Beginning in November 2005, Pedowitz spent nearly two years as Eloqua's vice president of professional services, before branching off to found TPG in July 2007. In the three years since, according to Pedowitz, TPG has serviced approximately 300 clients using Eloqua solutions, and has close to 60 clients currently running the vendor's software. (Pedowitz declined to cite in hard-number or percentage figures what portion of TPG's total business that segment represents, in either revenue or customer count.)
Although TPG will no longer have access to Eloqua partner events and is no longer allowed to sell Eloqua products, Culbert insists the agency will still remain abreast with the latest happenings with the software. In essence, he states, TPG's relationship with Eloqua has "gone from partner to customer." That transition may still have a few wrinkles, however. As of October 26 — a full month after the announcement — at least two pages on TPG's corporate Web site continue to describe the agency as "the largest and most experienced certified partner and reseller of Eloqua."
As for the relationship between TPG and its own clients, Culbert insists the TPG/Eloqua situation won't change a thing. "We bring [to our clients] other experiences we have in the space," he says, "and can help them achieve their revenue-marketing objectives — and that's what keeps us tied to them, not the partnerships, per se."
Brainshark, a provider of sales enablement services, is one the TPG clients using Eloqua software — and has no plans to alter course, says Edwin Thompson, Brainshark's director of marketing programs. "Both organizations are incredibly focused on achieving results for their customers," Thompson says. "I have no reason to believe the customer experience will suffer as a result."
Pedowitz also contends that TPG will have access to any future innovations introduced by Eloqua: TPG's software-as-a-service model will provide ongoing access to dozens of instances of Eloqua across TPG's customer base. "As soon as Eloqua puts out upgrades, patch releases, or major releases, we have access to that," Pedowitz says. "And, just like any customer, we have access to training and documentation." Both Pedowitz and Culbert underscore their company's goal of delivering to clients the broadest possible revenue-generating strategies.
TPG recently announced a plan to expand its operations westward, setting up an office in Palo Alto, Calif. According to the principals, TPG also expects to expand its partnerships with CRM vendors and move its expertise beyond marketing to subsets such as sales enablement and business intelligence.
Marketo, one of Eloqua's competitors in the marketing automation space, not only shuns exclusivity agreements, but warns of the impact exclusivity may have on customers. "The revenue performance market is a wide-open field, with tens of thousands of companies needing a solution like those that Marketo and Eloqua provide," says Phil Fernandez, president and CEO of Marketo. "Buyers need trusted, independent, third-party advisors like The Pedowitz Group to help them find the best solutions available. I can't imagine why Eloqua would not want their offerings included in The Pedowitz Group's evaluations. We think in the long run we win and our customers win when partners, including The Pedowitz Group, represent multiple competing vendors and always work in the best interests of their end customers — and not those of any single vendor."
In a blogpost written after Eloqua announced the termination of TPG's reseller agreement, Fernandez was a bit more blunt: "In our year or so of working with TPG, we have had moments of anger and frustration when Jeff or a member of his team recommended Eloqua or another competitor into a deal where we thought Marketo would be a great fit. But in the end, we always made peace with it because we knew that we were on a level playing field and that Jeff was representing the customer and putting the customer's needs first."
Brent Leary, cofounder of consultancy CRM Essentials, argues that the Eloqua/TPG situation seems to run contrary to the general direction emerging within the software market. "It seemed like we were moving toward a more-open marketplace," he says, joking that even software behemoth Oracle granted its rival Salesforce.com a speaking slot at the recent Oracle OpenWorld user conference. "I hope it's not the sign of the times, when vendors start asking [for] exclusivity."
Greenberg echoes Leary's sentiment that the action seems out of place today among talks of transparency and openness. "A company that has a policy to restrict who their partners can sell for is out of their mind in the 21st century," he says fervidly. "That kind of policy is ‘cutting off your nose to spite your face' in the worst way."
Greenberg questions how this policy will play out in Eloqua's future partnerships. Eloqua, he says, has an opportunity to be a dominant force in the marketing automation market, but this step is unlikely to score the vendor many points. "Exclusivity is the last way you want to go about it in the market," Greenberg says. "If they are consistent with this policy, no large [systems integrator] will ever partner with them. Why would anyone want to be exclusive to a company that hasn't broken 100 million [dollars in annual revenue]?" Despite any doubts regarding Eloqua's approach to the channel, Greenberg remains certain on one very critical point: "There's no question about the quality of their product," he says.
"The reality is that Eloqua can do whatever it wants," Greenberg says. "They have a good product, but the [partner] policy is puzzling and almost unfathomable." The bottom line, he adds, is that "exclusivity doesn't work for anyone."
What's more, the timing of the controversy may not work for anyone either. Convening its Eloqua Experience annual user conference this week in San Francisco, the company launched Eloqua 10, boasting that the software represented "the world's only revenue performance solution." At the conference, Eloqua also announced the winners of its Markie Awards, recognizing customers with stellar achievements in marketing and revenue generation.
The bittersweet irony? Some of the top honors went to TPG clients.
Additional reporting by Joshua Weinberger.
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