Google's new channel program: more lucrative but much tougher

Google is ringing in 2015 with some significant changes to its partner program, which is not only more lucrative, but also more exclusive, according to documents obtained by CRN in the United States.

Premier partners, such as large resellers and managed services providers, will see their margins jump to 30 percent for products such as Google Apps For Work and Search For Work.

But Google has upped the requirements to reach Premier status, meaning potentially far fewer partners will actually qualify for the top tier.

While Google has not released the information to the public, CRN US obtained documents and compensation schedules sent to the Mountain View, California-based tech giant's global network of partners, detailing the nature of the revamped programs (CRN Australia has not seen these documents).

The new partner program came into effect 1 January, merging seven product-specific partner programs under a Google For Work and Education Partner Program umbrella.

The most significant change is the margins increase for Premier partners from 20 percent to 30 percent – news of which was broken by the Wall Street Journal in early December, before Google could inform its partners of the impending overhaul.

One local partner confirmed that the program changes were the same for Google's Australian channel.

He told CRN Australia it was evidence of Google "growing up" as a channel vendor.

"I support the move. For a while, just about everyone here was a Premier partner. It will spread out the pack. I think it [US$500,000] is a reasonable mark. Yes, it is based on US dynamics but it is not that different here."

For many partners, the new half-million-dollar mark will represent a substantial increase, in large part because the direct-sourcing requirement amplifies the shortfall they have to make up.

Google also is implementing a US$4,000 revenue requirement to qualify for the standard partner tier, which before just required deploying a certain number of seats.

Another change introduced this year is that transfer rates, which resellers earn from taking on customers already doing business with Google, have decreased for some products – for Apps down to 15 percent from 20 percent.

In the documents sent to partners, Google said the changes are meant to reward those who invest significantly in skills and technical certifications. The new Premier tier is "for partners who demonstrate significantly higher levels of competency and success".

Google notes most partners will find themselves in the lower tier, with the same margins all partners have seen in the past.

Tony Chadwick, co-founder of Queensland-based Premier partner Rype Ideas, said the vendor was "seriously raising the bar" for Premier partners.

"There will only be one or two in Australia that will be able to meet that criteria."

Chadwick told CRN Australia that while achieving the revenue threshold would be a challenge, "we will have serious crack at making those numbers gel for us".

He said he wasn't motivated by the uplift in fees at the Premier tier as much as the credibility for being one of the country's top Google partners.

"It is not because of the commission level, it is the referral model that will come with that. If we could say, 'We have done everything from a 20,000-seat enterprise business to a one-person tradie, Google would naturally engage us into more deals around Australia'.

"We helped Xero to go to Google and that was enormous credibility for us. We didn't do the whole integration but where they needed training, they called on us to help."

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