Red Hat rolls out new channel program

Red Hat's Certified Service Provider program, which started its trial stage yesterday, is the first step in the Linux vendor's unified channel strategy.

Red Hat Corp. announced yesterday a new program for its systems integrator (SI) partners that its executives said will be just one part of a larger effort to come up with a unified channel strategy.

The Certified Service Provider (CSP) program will provide its members training in three important, repeatable services for Red Hat's Linux operating system: initial installation; regular maintenance and patching; and implementing satellite servers, which act as a central hub for networks of 20 or more servers.

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 The training includes the ability to shadow Red Hat technicians during on-site calls for more hands-on experience.

Since the three services the program focuses on come at a fixed price, being better trained will allow partners to deliver more quickly and make better margins, said Troy Webb, chief marketing officer and managing partner at InCentric Solutions, a Morrisville, N.C.-based SI, which is one of the six initial CSP partners.

Red Hat will also refer some leads to CSPs, which Webb said was almost unheard of prior to this program.

To qualify for the program, a company must first be an advanced business partner with Red Hat – of which there are only about 20 now, according to Mark Enzweiler, vice president of North American channel sales for Red Hat.

It must also have certified Red Hat engineers, a demo lab for prospective clients and be able to sell a certain amount of Red Hat subscriptions, although Red Hat declined to specify how many. Beyond those basics, potential CSPs must also demonstrate that they are helping develop the Red Hat brand.

"We really want [partners] to continue to help us build solution sets," Enzweiler said.

The invite-only program is only in its trial period and currently includes just six Red Hat partners. That number will grow, but Enzweiler wouldn't predict what the timeline for that expansion would be or how many partners would eventually be invited.

"I don't think this will be an offering where we go out and go after hundreds of partners," he said. "We'll have more than enough partners to deliver the service, but we are not going to compromise [for] quantity on the price of quality.

It probably benefits the partner a bit more than Red Hat.
Raven Zachary
analystThe 451 Group

A mature channel program could help Red Hat hold on to its dominance in enterprise Linux distributions, according to Raven Zachary, analyst at The 451 Group, a New York-based analyst firm. Although Red Hat currently leads the pack in that field, it may be feeling a threat from Novell, which owns SUSE Enterprise Linux.

The Microsoft-Novell pact announced in November could give SUSE an advantage if it can benefit from Microsoft's endorsement and strong channel program, Zachary said. The CSP could be Red Hat's first return salvo. Regardless of its reasons, he said, the new program is good news for the channel.

"I think it benefits both parties," he said. And with CSPs gaining both brand-name endorsement and lead generation, "it probably benefits the partner a bit more than Red Hat."

Whether that benefit will trickle down to smaller channel members – either through the CSP program or another evolution of Red Hat's overall channel strategy – remains to be seen, Zachary said.

Demand for Linux is expected to continue growing. One Linux survey found that 20% of IT professionals will use it for mission critical applications by the end of 2007, and that number will grow to almost 50% by 2011. Red Hat is the current leader for enterprise distributions, Zachary said.

With that level of demand, "there's more than enough work for many, many partners right now," said Webb said, who expects at least 100 other VARs to qualify eventually as CSPs. He expects at least 100 CSP partners eventually.

The biggest benefits for his business will be the extra credentials and lead generation, he said. Those leads will drive InCentric's IBM sales and the services that can be sold on top of packaged solutions.

"I'm looking forward to selling more software, middleware and helping Red Hat sell more subscriptions to rel 4," he said. "Our normal business will automatically pick up."

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