Palo Alto Networks Channel Chief: We're Investing Big Time In Our Partners

Growing On Growth

Palo Alto Networks' partners shone at the company's Sales Kick Off last week, with hundreds of partners hitting triple-digit growth rates with the vendor and diving deep into new technology and services lines.

What is it that separates Palo Alto Networks' partners from the rest of the pack? In an interview with CRN at the event, Americas channel chief Todd Palmer dug deep into why Palo Alto's enablement helps partners garner that success (including over its competitors) and what the security vendor has in its back pocket to keep that growth going for the long term.

Take a look at what he had to say.

Talk about the growth you have seen around partners.

I did the analysis in our business and I looked at partners over a certain size [around $1 million or $1.5 million], and we had 60 that grew over 100 percent ... and 41 that were over 200 percent. Those aren't small numbers. It's tremendous. That's what I think is probably the most exciting thing. We had a plan when we came into the year that we wanted to make sure we were putting all of our resources, time and attention on the partners that were making the biggest investment in Palo Alto Networks. We wanted to make sure that we were growing their businesses and we succeeded. If you look at the partners that we expanded coverage on, ... their growth on average far exceeded the growth of our overall business. That's what we want to see.

What are some examples of the growth partners have seen? How will they continue it?

Our national partners' business grew exponentially. We're pleased. I think the reason why I'm most pleased is we're still just at the infancy stages of it. ... Just looking at some of the numbers from [our top Americas partners] -- it's just staggering. If you use ePlus as an example, ePlus' business with us is up around 300 percent last year. It's a big number, and still only probably less than 20 percent of their workforce has sold Palo Alto Networks. The opportunity is massive. I use the CDW example all the time -- how many reps does CDW have? 2,000? Less than 10 percent sell Palo Alto Networks and it is their fastest-growing product. The opportunity is immense.

What are you doing to enable that and make sure you're capitalizing on that opportunity?

Probably the biggest investment I've made over the last 12 months is with our channel systems engineers to make sure that their technical folks not only understand how to utilize the technology but they know how to pitch it, demo, value prop, and are confident going out and spreading that message. ... In fact, we've doubled the number of certifications that our partners have earned in the Americas this year. On the sales side, ... we're packaging up and sitting down with our partners and helping them understand and be able to articulate that proposition from endpoint to data center to perimeter. ... In fact, we're about to kick off a road show starting in the very beginning of Q2 where we'll hit 10 major cities across the Americas and they will be like mini partner conferences. ... Our partners are flocking to it. Our partners see it as a huge growth engine for their business,... so they're willing to spend their own time and energy to get better and better at it, because they've seen it on their paychecks.

How do those enablement efforts compare to what your competitors are offering?

It's all over the map. If you ask 10 manufacturers, they all do it a little bit differently. Some of them do a really good job from a technical perspective and a lot of them you have to pay for it. We do an astronomical amount of stuff for free. All of ... pre-sales workshops -- free. All the sales training that we do -- free. We've got a whole bunch of online stuff we've done that's totally free. ... It's one of the things that we also measure our distribution partners on: How are you enabling the partner community as well? Westcon, Arrow, Cloud Harmonics -- all of them have done an exceptional job about it and they're proud of it too. ... Our three distribution partners in the U.S. and Canada have built dedicated organizations around Palo Alto Networks. Twelve months ago, there were two dedicated resources around distribution -- there's 29 right now.

Talk about Traps. What is the benefit of that for partners?

If you look at the pyramid and you look at the platform that we're talking about and you look at all the breaches that happen today, they start at the end point. If you're telling the platform story appropriately, it should be integrated into every single sales pitch that you make. That doesn't mean that the customer is going to buy off on the entire platform today, but they will say, I am totally bought with this vision. ... It's just an enormous opportunity. What that lifetime value means is that in the last quarter that you reported earnings, I think we had a lifetime value [of just under 10]. ... That's what's compelling to the partner community. It's always easier to sell a second thing to a customer instead of finding a new customer. The fact that we have a story that they can buy off on and they can keep going back and adding to, it is huge. It's a reduced cost of sale.

What about professional services? How are you enabling partners?

The opportunity for our partners around professional services is massive and it's untapped. If you think about it, if a partner is selling our products into their customer's environment, they should also be selling assessment services, they should be selling implementation services, they should sell migration services and they should be selling optimization services. I just hired someone who actually starts tomorrow who will be working with our professional services organization to package up what are the professional services offerings that our partners should be selling, because they could potentially add 30 to 40 percent onto a product sale in professional services.

Why aren't partners doing this already?

They're doing [this], but they could be selling way more than they do today. If you look back across every customer that they sold to, we want them to go back into those customers and how many of those customers have migrated 100 percent of all of their old port- and protocol-based policies to application and user? If they haven't done it all, why don't you propose a services offering to do all of that for them? Then, come back in and optimize how they are using Palo Alto today and give them ideas on how else that they could be leveraging the technology. It's just an untapped opportunity.

What about the Aperture and SaaS application push from the CirroSecure acquisition?

If you're selling the platform and you've bought into the value and the strategy around prevention, then these are natural extensions to that. But, if you don’t start by selling that, then you're doing yourself a disservice. But, if you've sold [the customer] on that vision and the value of Palo Alto Networks, well, it should look at regular application and SaaS applications. There shouldn't be a difference between the two of them. It's just an added thing that they can go back in and sell to their customers. Hopefully we'll be developing some marketing campaigns and rolling them out quickly.

What are you doing for partner recruitment?

Very little. They're coming to us naturally and we're not adding. We're not adding because if I look across our partner landscape, I love our partners, and we have a great portfolio of partners that are making big investments, and it's easier for me to support, and if my partners continue to invest, then I don't need to add new partners. It costs more to launch up 10 new partners than it does to convince partners to invest more. ... If our partners continue to invest like they do now, I don't need to recruit any more partners. It expands the opportunity if I don't.

Where are you adding partners?

SLED [state, local and education] is an important part of our business. ... If we don't have [partners that focus in that in specific geographies], then we'll need to add them there. Two investments that we will be making from a partner perspective is global systems integrators and federal systems integrators. Big, large, global companies turn to global consulting firms for validation and guidance. We want to make sure that Accenture, PwC, Capgemini and CSC, when they're providing cybersecurity consultation to their customers, that Palo Alto Networks is integrated into that solution. We're hiring on a worldwide level dedicated partner managers and architects to work with those global systems integrators and also in the Americas to work with the global systems integrators and federal systems integrators.

What about partners who want to get involved? What do they do?

You're probably heard this term, we use it a lot: focus partners. ... My channel business managers, they can only actively support probably eight to 10 partners and do a really good job of providing them the resources and the help they need to be effective. There's a bunch of other partners, so we created an inside channel organization, and because they don't travel and they're on the telephone, they can support 25 to 30 partners each. It's a different level of service, ... but it's probably appropriate for the level of investment that they've made. Everybody underneath that, distribution is supporting through their resources that they have created. If you look at the growth curves, our partners ... you would expect to be the most of our time and resources on are growing faster.

Are you converting and bringing on board partners that have traditionally worked with your competitors, like Cisco and Check Point?

Yes. Anybody who has a security practice has been selling Check Point in the past -- they're quickly migrating. Any data center partner over the last 18 months, we've recruited a number of data center partners, they've all dealt with Cisco in the past and they have sold Cisco ASAs. ... We're seeing places that they have been selling ASAs are getting beat out by Palo Alto Networks by another partner, so they are migrating that over. I think they just believe in the value proposition and the story. Security is, what, 5 percent of Cisco's overall business? If security doesn't grow at a rapid pace, it's not going to make a massive impact on Cisco's business. It's all that we do [at Palo Alto Networks].

Is that why you launched the PA-7080 this week?

We launched it because of the opportunity in the data center. The data center was underserved from a security perspective. People spent all their time and money on the perimeter, and not on the data center. Once someone gets into your environment, however they get in, they are going to the data center, because that's where the crown jewels are. It has the throughput and the ability to give you the same protection in the data center, either north-south or east-west, with the virtual machines. Those opportunities are also 10 times the size than on the perimeter. [Data center] makes up 50 percent of our business in the Americas today. If you go back about 18 months, it was probably about 10 percent, so huge, huge growth.

How does that growth help you win over the competition?

[The focus on data center is] why you see companies like ePlus, Dimension Data, Presidio -- those guys have been doing business with Cisco for eternity. Well, they are making massive investments in Palo Alto Networks because they see that opportunity in the data center and they realize our solutions are meeting the needs of the customer.