Red Hat Intros New Channel Program Tailored For App Delivery Partners

Red Hat introduced a "partner program within a partner program" on Monday to better support a subset of its partners leveraging its application delivery portfolio to build custom solutions for enterprises undergoing digital transformations.

The Red Hat Application Platform Partner Program seeks to put partners with practices that leverage Red Hat's application delivery products on more solid footing. That business is still emerging, and much smaller than the Raleigh, N.C.-based vendor's core infrastructure business, but it's growing 40 percent year-over-year, John Bleuer, Red Hat's vice president of global ISVs, told CRN on the first day of the software vendor's North America partner conference in Las Vegas.

Partners on the "dev" side of DevOps, in rearchitecting enterprise applications for cloud-native environments, face different challenges from infrastructure resellers, and they require unique vendor support. While three-quarters of Red Hat's business historically goes through its channel, that segment has been underdeveloped, Bleuer told CRN.

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The new Application Platform program, embedded in Red Hat's larger channel structure, encompasses JBoss middleware, the OpenShift Platform-as-a-Service, Mobile Application Platform and the 3scale API management platform acquired last summer.

Red Hat's channel leaders plan to grow the program initially to a group of 10 to 20 "first-mover" partners, Bleuer said, many of whom worked with Red Hat over the last nine months to design the contours of the new program.

Enterprises focusing on digital transformation are increasingly turning to open source products, Bleuer said, and the number of solution providers, from global systems integrators to smaller regional players, leveraging Red Hat products to address the full solution lifecycle is growing.

Partners delivering those kinds of solutions have a far higher ratio of services revenue – typically upwards of 70 percent. The program will implement 'influence revenue' by which partners not directly reselling Red Hat's ongoing subscription services can see more earnings.

The program also adds more tiers than the traditional program, with a greater focus on enablement.

Joe Dickman, senior vice president of Vizuri, a Red Hat consultancy based in Virginia, said encouraging the Application Platform program was a priority of the Red Hat partner advisory council on which he sits. It will be a boon for a subset of highly skilled Red Hat partners that deliver solutions built on the back of emerging products, like OpenShift, that constitute the vendor's largest growth area.

"This program is the culmination of many years of efforts. It's something Red Hat for several years was moving to correct," Dickman said. Red Hat's standard program aligns with the purchasing relationship partners have with customers. That works well with infrastructure products like Red Hat Enterprise Linux, but those in the channel making the deal aren't always the best to do application implementations, he said. The new program recognizes that IT consultancies, like Vizuri, that specialize in high-end services sometimes might not be selected as a reseller. Those partners will now be compensated on the back end, rewarding their investments to sell Red Hat products in the course of their implementation engagements, even when the customer prefers to close the deal through their normal channel. "It's been long overdue, but this version of the program was well crafted," Dickman told CRN.

Paul Hinz, Red Hat's senior director of product marketing, told CRN the traditional program is opportunistic, but app development partners need a more prescriptive model.

Through the new program, Red Hat will define specific use cases, offer training in the technology and how to bring it to market.

"We picked some very good partners that we're best friends with," Hinz said. "We're not dating; we're married to them. These are long-term, large-scale revenue opportunities."

The program was unveiled to partners the same day Red Hat announced fourth-quarter revenue of $629 million, with $125 million of that generated by the application development portfolio.