Inside the partner plans of Australian channel chiefs from top vendors

If there’s one constant in the IT sector, it’s change. If there’s one thing channel partners demand from their vendors, it’s consistency. How can these two forces be managed? That’s the job of the channel chief – often caught between a large and complex network of independent IT resellers and the demands of their own global parent company.
From strategies for compensating managed service providers while achieving quarterly revenue targets to the need for better industry specialisations within their partner programs, these business leaders shared the ups and downs of life at the coal face of the Australian IT channel.

Guests
Kaaren Lewis, director of channel and distribution, Commvault
Chris Hewlett, director of commercial channel, HP Inc
Patrick Devlin, south pacific manger, distribution and SMB, HPE
Josh Gardner, channel manager, HPE Aruba
David Sykes, sales director, Sophos
Janet Docherty, director of ANZ channel sales, Veritas
Hosted by
Steven Kiernan, editorial director, CRN and iTNews
Rebecca Wallace, brand director, CRN
Michael Jenkin, deputy editor, CRN

David Sykes, Sophos
Our attempt to move further away from direct customer touch and more onto partner alignment is accelerating every year. The challenge I see is that we’re moving faster than the channel can take it up. That enablement, engagement and readiness in the market to be able to pick up security – which has never been hotter, and I started in Symantec in 2000 so you can get a feeling for how long I’ve been doing this – is probably one of the biggest challenges in terms of how quickly we can grow our business.

Pat Devlin, HPE
There are 60,000 midmarket organisations in Australia. They move faster [than enterprise], they change faster, and their number stays relatively stable, but the organisations come and go, right? For someone trying to sell to those companies, the sales cycles are shorter and the resources required are lower. That’s where the opportunity is. And that’s where it’s always been, it’s just we’re all waking up and realising that that’s where it is.

Pat Devlin
Most channel partners have been doing MSP services to midmarket customers forever. We just haven’t called it that. Most of the partners that we deal with have a strong midmarket base. They wrap their arms around almost the entire organisation. They do everything for that company. They just don’t call it [managed services].

They haven’t financed it that way, they haven’t thought of themselves as a managed service provider, but they have been in that business. We think we’re building a new model, but actually we’re just relabelling and restructuring something our partners have been doing forever.

With that in mind, at the top end we have a genuine service provider opportunity. It is a different model for a vendor that has an internal structure that’s all about rewarding salespeople for moving tin. I want that big sale, that million dollar deal – how do we move that when a customer says, “Well, actually I just want to buy a per-month service”? We’re listed companies, we’re quarterly driven.

It’s very difficult to move our reward and incentive scheme away from, “We want a big hit now”. The long slow tail delivers much better, and our midmarket resellers have already figured that out. The guys who transformed the services businesses have outlasted the guys who were doing big tin drops, because that keeps the lights on even in the darkest hours.

Josh Gardner, HPE Aruba
For Aruba, we’re having fantastic success in healthcare, hospitality and a raft of other sorts of vertical markets. A lot of our partners have been specialising in those very areas, and then we go, “Aha.”

We’re now taking advantage of what our partners are already doing, and then supporting that more than we may have traditionally done. We are recognising this is an area to play in, and by investing a bit of market specialisation we can actually reap a lot of rewards.

Kaaren Lewis, Commvault The key thing that we’ve learned in the past couple of years has been around internal goaling. Our internal goaling now has no preference whether it’s perpetual licence or you put it through a managed service provider as a subscription or utility licence.

We’ve neutralised that internally, so the goaling is out of the way. Now it really is: what does the partner want to do and what does the customer want from that partner? We’re finding most of our partners do both. They’re on our MSP program, they’re on our resell program. We’ve just tried to make it easy for them to do whatever’s right for their customer.

Chris Hewlett, HP Inc
Printing is a true utility model. It’s actually by page – not by month, not by seat, it’s just by page. We’ve got some partners that have been very successful in that space and they have a good model. We’re trying to differentiate ourselves in entering the A3 market now, but there are some traditional models there that are working really well for customers.

When it comes to PC devices, the utility model is not quite there, and I’m not too sure if it will be because it’s a personal device. Although some of the phone plans are utility-based, you own the phone at the end. It’s your device, it’s your personal thing. What we’re seeing in the device space is that customers are looking for ease of access, ease of procurement, standardisation and just taking all that stress away from having to manage this stuff – having to acquire it, having to support it, knowing where it is. Just give me a standardised model.

We’re putting an approach in place that is collaborative with our partners. Rather than giving them a whole host of services that are HP and saying, “Hey, sell them in a package format,” we’re saying, “We’ll work with you in the services that you’re good at.” We spoke about managed service providers earlier, how partners have been doing it for years – we don’t want take that away from them. That’s what they’re good at. That’s what the customers want to buy. We’re saying, take our devices, take some of our services – and that might be just be a warranty – but package all the stuff that you do today and put it in a really succinct model. That’s resonating with partners. Some are quite mature and have their own model, and others are asking for help. That’s addressing from the smallest of SMBs with 10 seats, through to the largest, with 10,000.

David Sykes
I think we vendors are in danger of confusing licensing models with real business models. We look at the move to that subscription model, converting capex to opex, all that sort of stuff. But when I go back in and poke at it, they’re not managing their customers’ security. Even though I’ve just given them a cloud-based portal and I’ve given the capability to multi-tenant, they’re not doing that. They just used the model to do subscription pricing and that’s not really delivering a service. It’s simply moving capex to opex. It’s a change to a licensing model, not a business model.

CRN
So then what are the hallmarks of a true managed security service provider?

David Sykes
Monitoring, managing and responding to the security deployment. In a Sophos world, they would be using the Sophos central console, which now has a partner view to it. We have moved them off their on-premises server and console to a cloud-based environment. The console has a partner view that enables any partner to look at all the customers they have deployed.

They’ve got the capability – it’s delivered for them. But when I actually go in and look, what I’ve seen is that generally, the customer is still updating and managing it themselves. They’re not providing a service. They’re not saying, “Hey, you’ve got six devices out there. Four of them haven’t been updated in the last two weeks. You need to do something about that”.

Pictured: CRN's Rebecca Wallace, Janet Docherty (Veritas) and HP's Chris Hewlett

Josh Gardner
You’ve got to address internal selling and external selling. You’ve got to reward your own salespeople to encourage them to support whatever programs you’re taking to market. That’s what we’ve done with our managed services partner program. Our salespeople are going to get paid if this partner is buying infrastructure to invest in their own as-a-service capability to market. That’s the first thing.

The next thing is if the partner is building their own as-a-service capability, traditionally that has meant an investment for them. They’re either buying or buying back the customer’s networking facility to then deliver it back as a pure opex service. But that’s got a huge investment attached to it.

We’ve made investments in true network-as-a-service offering, where Aruba has invested and will deliver the infrastructure-as-a-service, so the partner can onsell campus networking infrastructure effectively as an opex-based service.

Josh Gardner
Effectively Aruba.

Pat Devlin
Think about what’s happening in the market generally. Everybody is competing against the kind of guys [public cloud providers] where I can buy today and walk away from it tomorrow. It’s not a lease. If you are competing against the big public cloud providers, who can be on today and off tomorrow, a lease doesn’t cut it.

Janet Docherty, Veritas
We’ve seen a massive growth in Azure or AWS being the target for customers’ back-up, or where they want to recover to. We’re helping customers understand what workflows they can move up into the cloud, and to test that first as well. That’s where we’ve seen the biggest growth.
Your big Microsoft partners or your AWS partners – they are push, push, push. Microsoft partners have got targets to consume Azure and we’ve got the technologies to help them do that.
From a customer point of view they think they can just move [to the public cloud] and everything’s going to work nicely. That doesn’t happen. Turning something off, like, “Oh, we don’t want to have backup anymore” – you can’t just turn it off like that. It’s an insurance policy.

Chris Hewlett
I look at all the vendors around the table and we only play one part of the puzzle. We’re trying to take our blinkers off and look at what the partner is doing in totality. We spoke about lead management before. For us, it’s a lead for 100 PCs, but for the partner it’s a lead for a new customer that they can sell everything to.

If a partner is going to invest with us and do the certifications, we’ll give them that investment back. But for all of us, we’re really competing for time with our partners. How do we enable them? We can’t have them all on a full-day training session. They’ve got to decide where they spend their time, who they certify with, where they specialise their reps.

It’s difficult. But we need to have systems in place that ensure that we have auditable deal registration processes, knowledge of the partners and their specialisation and back them just like they back us.

Kaaren Lewis We’re just one part of a recipe. Our partners are doing transformation projects. We’re all one little slice of that, or one little ingredient of that recipe. Respecting that and understanding the bigger picture helps drive that [relationship].
My preference is smaller, fewer and deeper relationships with channel partners, rather than hundreds of thousands. It doesn’t work for anyone that we’ve got partners competing over the same business. Regardless if you’re big, small, specialised – you want your partners surrounding customers across your total ecosystem, and that they’re perhaps few but really deep and specialised.

CRN
How do you maintain your relationship with your partners when you have to give preferential treatment to one partner?

Janet Docherty
It all comes down to trust and relationships. The partner programs are there with the rules to keep everybody on the right side of the fence. At Veritas we’ve got opportunity registration programs where the partner then registers the opportunity and no other partner can then go in and do that. You protect them from that. They can’t go in at the competitive price.

We will never stop two or three partners promoting the same product or in a tender situation. But you may have been working with a partner for six months pre-tender release, so you let the other partners know we do have another partner involved, and definitely protect them from a pricing and margin point of view.