Rackspace Preps Channel For Cloud Revolution With Single Partner Program

Rackspace Hosting has gone full steam ahead with a single, unified partner program, tying together its four disparate programs around cloud computing, managed hosting, e-mail hosting and Rackspace Cloud Drive into one program for its more than 4,500 partners.

Rackspace first hinted at a unified partner program in October at its partner conference. The new global program officially launched on Tuesday. Rackspace has said that the channel is integral to the company's overall success and critical to its vision of top-notch service.

"Without a doubt, our goal is to be the hosting industry's leading channel program," Robert Fuller, vice president of worldwide channel sales, said in an interview, adding that the program is designed to help partners make the leap from selling hosted services to selling cloud computing services.

"The enhanced Rackspace Partner Program is all about empowering our channel partners for the cloud revolution…," Fuller said. "As the market shifts from traditional on-premise server management to cloud-hosted services, we are empowering our channel partners to capitalize on this significant business opportunity and increase their trusted advisor status with their customers."

A single channel program, Fuller said, will make it easier for Rackspace partners to refer and resell additional services and boost revenue opportunities. Through the program, San Antonio-based Rackspace will offer upgraded benefits and a new compensation structure, it will also feature a single contract to allow partners to receive compensation for qualifying resales and referrals across Rackspace's full portfolio, which includes cloud hosting with Cloud Servers and Cloud Files; dedicated hosting; e-mail hosting via Rackspace E-mail, Hosted Microsoft Exchange and Hosted Microsoft SharePoint; and Rackspace Cloud Drive, the fruits of its 2008 acquisition of Jungle Disk.

Fuller said Rackspace built the program around a five-pronged vision: to offer a broad range of hosted services and support for those services; to offer infrastructure that is easily accessible; to provide partners a comprehensive tool set including training, certifications and other offerings; to give the channel program benefits; and to have a strong Net Promoter Score (NPS), a satisfaction rating.

"This is a new muscle we're exercising, growing and developing rapidly," Fuller said, noting that combining four programs into one was "like bringing together.

Sean McCaffery, director of channel sales and worldwide operations at Rackspace, said a main goal for the blending of Rackspace's partner programs was to make the company more partner-friendly. To do so, the Rackspace Partner Program will feature a single contract and a unified commission structure. The new Rackspace Partner Program will also feature four partner tiers, Platinum, Gold, Silver and Member, each of which include all Rackspace products and rewards partners with points for business secured, referred or resold.

McCaffery said the point system will work like this: each dollar of managed hosting sold equals one point; each dollar of cloud computing sold equals two points and each dollar of e-mail and apps sold equals five points. McCaffery said the point system was designed based on average spend in each category.

Partner levels are based on points, with Platinum requiring 75,000 points; Gold requiring 30,000; Silver requiring 2,500; and Member partners requiring 500. McCaffery said the point and tier structure makes it easier to move up tiers and existing partners will enter the new Rackspace Partner Program at their current levels with their current pricing.

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Rackspace has made a major investment in growing out its program, adding headcount and tools, bringing aboard a dedicated channel training manager and launching a virtual briefing center to get partner sup to speed, McCaffery said. Later this year, Rackspace plans to launch a formal certification and education training program.

The new program will also boost marketing capabilities through micro sites, automated e-mail and white label capabilities; and it will feature an enhanced partner portal that gives partners a single view of their relationship, including opportunity and lead management, commissions reporting and educational and sales tools access, the company said.

Overall, Fuller said, the new program was built to give partners access to Rackspace's full product set in one place and to enable them to engage customers with the company's full portfolio.

"It will give them a lot more options when they go in and talk with their customers … The more options we can provide to them, they're going to feel more comfortable," Fuller said. Adding that the new partner program increase cross-selling abilities, enables partners to re-engage with existing partners and helps partners target a bigger share of wallet. "The channel clearly is struggling in many areas, we're giving them a broad services offering where they can mix and match their own services."

Kenan Rappuchi, vice president of business development at WebSiteMovers.com Inc., a Troy, Mich.-based solution provider, said single Rackspace Partner Program will help his company become engage more customers with Rackspace offerings.

"We can look at each component of the infrastructure and get new customers on board," he said.

WebSiteMoviers.com touches all four segments combined into Rackspace's single program. The streamlined channel program from Rackspace will make it easier for partners to leverage the various components that Rackspace offers while also providing a true understanding of where partners stand and what type of commissions they stand to make.

"You don't have to whip out your calculator to figure out what your commission is going to be," Rappuchi said.

Rappuchi estimated that WebSiteMovers.com's Rackspace business has increased 30 percent to 40 percent per year for the past two years, and he expects the same rate of growth for 2011, fueled by the new Rackspace Partner Program.

"The new program allows us to be very efficient and effective and mach customers with the right Rackspace services," he said.