The global trends helping F5 partners escape margin squeeze

Global trends are setting the stage for F5 channel partners to engage with customers on shifting to new models that can fill out increasingly squeezed profit margins.

The security and application delivery vendor operates with a 100% channel model and has 5,000 partners globally, including 400 across Australia and New Zealand.

F5 ANZ regional vice president Jason Baden said partners were realising they couldn’t rely on product sale margin any more and needed to turn to added services to bolster revenue.

He said now was a good time for partners to sell these services, as many Australian businesses were in a refresh cycle.

“That gives us a really great opportunity to have a meaningful conversation with a customer about what they're doing and how they're doing it, and through that consultation, that gives [partners] the opportunity to expand and differentiate," he said.

He said customers that may have “bought a box and put it in their datacentre” could be considering a more hybrid approach with software-as-a-service (SaaS) options, or looking to find new skill sets that could be outsourced.

F5 global partners vice president Lisa Citron said another trend that offered engagement opportunities for partners was customers who were facing drastically increased costs at time of renewal due to certain “large company acquisitions”.

“Some of these folks are moving away from things like hardware to SaaS-only models and, frankly, the customers have to solve it in a multi touch piece," she told techpartner.news.

"That's actually opening a different type of conversation, to just go in and sit with the customer and say, what's that pain point? You get to go in front of that customer and say, 'I understand you were just delivered a 5x increase and you're losing your ability to use hardware, how can I help you?'”

Citron said the rise of artificial intelligence (AI) is also driving greater opportunities for partners.

She said companies like those in the telecommunications industry were investing in infrastructure to support the hefty resource requirements of AI tools.

F5 offers solutions for improving the efficiency of data and graphics processing units, the most in-demand processors for AI training.

“That's actually core to what we've always done in traffic management and application delivery," she said.

"You've got telco pieces that are building AI factories. We're seeing that so much in where that investment goes. We're able to sit in front of [partners] and say, I know you don't see it yet today, but the verticals that you focus on, these customers are buying.”

She added that F5 is investing in training and education for partners in that area so that when conversations steer into that realm, the salespeople can recognise those opportunities.

Baden said this was an example of how F5 was able to support partners who may not always be able to stay on top of rapidly changing technological trends. 

“Partners can't invest too far ahead of the curve, because they need to be able to see revenue," he explained.

"But what they do know is that when they see that wave coming, we'll be able to support them. They'll be ready for it. They'll have the products and the education to be able to get that done.”