Top Billing: 2018 Cloud Partner Program Guide

Partner programs are an increasingly competitive front in the cloud wars as vendors recognize the imperative of attracting solution providers with advanced skill sets and cloud-aligned business models to scale their market reach.

In just the past year, many name-brand technology companies have entirely revamped longstanding programs, rethinking how they partner with solution providers in the cloud era. Of top concern is encouraging partners to specialize and helping them embrace recurring revenue.

CRN’s Cloud Partner Program Guide highlights many companies that have evolved their partnering strategies to meet these new challenges.

SAP is one industry powerhouse that recently introduced a new program to drive partner engagement and open new avenues for business.

The software giant revamped its channel program to better support different segments of its broad portfolio, including solutions outside its core business, Marc Monday, SAP’s vice president of channel partners in North America, told CRN.

Monday, a veteran of VMware and Microsoft channels, said the cloud has changed the dynamics for a successful program.

“We need to meet the partner where they are just like we meet the customer where they are,” he told CRN. “It's important in all partner programs to have a path for a partner in terms of how they go build practices and how they focus on the business model."

That means talking with partners both about the immediate opportunity, even if it’s tangential to the vendor’s core technology, as well as the larger one in the future.

While ERP is “the air we breathe” at SAP, he said, most small and midsize customers first encounter the company through acquired properties like Concur, Ariba and SuccessFactors.

Those customers typically aren’t contemplating the whole platform. They’re making decisions to solve a specific business problem.

“We should never overlook the opportunity to help them with something today,” Monday said, recognizing practices evolve and solution areas tend to merge as channel relationships develop.

For that reason, “we need agility in the partner program,” Monday said. “So that’s where the magic comes in in the partner economy.”

Juniper Networks is another established vendor that recently relaunched its program with the aim of encouraging specializations across an ever-diversifying portfolio.

The networking powerhouse needs partners that have invested in mastering the intricacies of specific lines of products, Helda Lopes, vice president of Juniper’s global partner programs, told CRN.

To that end, Juniper created three main specialization tracks—data center, security, cloud—and changed its rebate structure to particularly incent its channel to focus on cloud practices.

“We felt as our technology has changed, we needed partners to have in-depth skills to thrive and support that business,” Lopes said.

The new program demands partners get engineers certified in specific technologies and achieve revenue goals that include a certain percentage of sales coming through ongoing services. Imposing such stringent requirements was necessary to nudge its channel in the right direction, Lopes told CRN.

Juniper recognizes the investment and commitment required of partners to meet those expectations, she said, and looks to reward them accordingly with handsome rebates and discount models, as well as enablement and co-marketing opportunities.

“A lot of vendors are moving in this direction,” Lopes told CRN, adding, “the cost to support a customer base without the channel being there in the middle to extend the reach” makes growth unattainable.

For large technology stalwarts, it’s the combination of portfolios expanding, both organically and through acquisitions, and the larger industry dynamic of complex, heterogenous IT footprints, that drives the need for partners with advanced skills.

Juniper’s program will inevitably evolve to further incent adoption of recurring revenue models, Lopes said.

SAP’s updated program has also prioritized emphasizing “the value of the annuity,” Monday said.

“In the cloud, the size of the deals goes down through the pay-as-you-go model,” he said. To seize the benefits of that model, many partners must change how they recognize value.

Focusing on customer retention is the key to seeing the financial upside of recurring revenue, said Matt Scherocman, president of Interlink Cloud Advisors, a Microsoft partner based in Cincinnati.

Vendors rejigging their programs should keep in mind that partners tend to think broadly in terms of the total cost of the sales versus the margins they generate.

When evaluating a new solution, and the program that supports it, partners like Interlink typically first consider if there’s a clear value proposition for the end user, Scherocman said.

The next question is whether there’s value the partner can add.

“Are there enough services that can be attached to the solution to be able to cover our sales investment and make a profit?” Scherocman told CRN.