When a bad McAfee Inc. antivirus update disrupted corporate machines across the globe, it was the channel that...
was responsible for cleaning up much of the mess, admits Alex Thurber, senior vice president of worldwide channel operations. Thurber said the McAfee update problem was a horrible mistake, but presented an opportunity for partners to show themselves as trusted advisors working with the affected customers. When the issue was finally concluded, he said McAfee stepped up and adequately compensated channel partners for their work.
Thurber took his role at McAfee in 2009 after a succession of channel leaders served short stints in the position. Thurber arrived when McAfee was fresh off of two acquisitions (Solidcore Systems and MX Logic). Thurber, who was responsible for security channel programs at Cisco Systems Inc., had to integrate the Solidcore and MX Logic programs into McAfee and pick up the pieces from his predecessors. Fortunately, Thurber said, the program only suffered from a lack of execution.
Today, an almost completely overhauled McAfee channel program includes strong incentives and rewards, including deal protection for partners. In this interview with SearchSecurity.com, Thurber talks about the issues his team confronted and the future of McAfee's channel program.
You came to McAfee in 2009 when the channel program leadership was undergoing a lot of turnover. What were your immediate goals?
Alex Thurber: When I came on board, I found a great staff that had already done a lot of work without leadership since my predecessor had been gone for a while and his predecessors had been relatively short lived. They weren't able to gain the traction to roll out what we were trying to do. So we developed and announced an entirely new channel program, which really focused on value. The more a partner does for us, the more we do back for them. We added everything, including having two partnership tiers: the higher the tier you are on, the more discounts you get and the more rebates you get.
We made a lot of acquisitions, many of them with strong channel programs. Rather than combine them in an overall program and integrating them together, we kept them running separately. It became a bit of a challenge. We had one program for our network gear, one program for our endpoint [products] and one for another set of products, and that didn't work. We rationalized our distribution strategy and went from nine distributors down to three and really started to put together a world-class program.
Did you bring a lot of what you learned at Cisco Systems to McAfee? It must have had similar kinds of acquisitions and integration issues.
Thurber: I think it was a combination of two things. Before I joined Cisco, I owned my own network integration company and we were a partner with many technology companies, so I learned what it was like to be a reseller, working with a manufacturer. Seven of my 10 years at Cisco were in the channel, including helping develop a lot of very influential new channel programs. The difference between McAfee and Cisco, besides obviously the size and scale, is that McAfee is both a software and a hardware company. We had kind of been transitioning from 100% software to around 60/40 and so we had to build a program that would support all of our networking and hardware as well as our software. Cisco is still basically a hardware company.
McAfee CEO Dave DeWalt laid out the Security Connected initiative at Focus 10 and it talked about security being ubiquitous from McAfee's mobile strategy to networking to virtualization and a future with hardware-based security. Are there really a lot of channel opportunities in each of those areas?
Thurber: Absolutely. I think the opportunities are even better for our partners because companies realize just how complex the security landscape is and the challenges they're facing. McAfee is the largest independent security company in the world and we're the only one that covers the 6, 8 or 12 areas of security. Particularly today, as we look at the consumerization of IT and think about the smartphone. Our Trust Digital acquisition allows me to comfortably have my smartphone, and yet know if I lose it, not only is it encrypted, but within seconds it can also be wiped so that loss is no longer a reportable event.
Intel, which is acquiring McAfee, obviously has that kind of technology, leveraging its silicon. I know the acquisition is not completely finalized, but can you talk about how that acquisition affects the channel in terms of stability?
Thurber: We're in a quiet period so I'm not a liberty to talk at all about the acquisition. Both Intel and McAfee has emphasized that we will continue to be an independent subsidiary of Intel. I apologize I can't say more.
As you mentioned, when you took over in 2009, McAfee was just coming off of the Solidcore Systems and MX Logic acquisitions. Does it reinvigorate the channel to have acquisitions like that or does it cause potential problems in terms of integration for McAfee resellers?
Thurber: At Cisco, I was responsible for channel integration of acquisitions and I think we had about 30 during my time there. A lot of those were just technology, but quite a few had their own channels. It is definitely an opportunity when a company makes an acquisition. It's one that you have to manage carefully, particularly the channel's integration, for a couple of different reasons. One is that you might be acquiring a product that you were previously competitive with or not engaged with, so there's the building of a relationship between the McAfee field team and the new partners. Second is obviously integrating those new partners into the McAfee program and integrating the McAfee partners into the new technology.
We've been learning that it really depends on each acquisition. MX Logic is a perfect example. They were thought of having the best channel program when it came to Software as a Service (SaaS). It was thought of well by the partners and the distributors, so rather than force them into the McAfee SaaS program, we modified the McAfee program to match the MX Logic one because we realized that MX Logic had the best practice. The whole key to all of this is communication. We are really working hard to communicate with the channel and that is two-way communication. It's not just us telling them. We're doing an incredible amount of listening and learning. I think our partners would also agree with us that we modify things as necessary.
Back in April when the bad DAT file antivirus update affected customers, how did the channel respond?
Thurber: Other than the largest companies that were impacted, we relied on the channel to help and take care of that remediation all over the world. They were critically important to making that happen. It was very important to do that. It was also a good opportunity for individual partners to go in and show themselves as trusted advisors to work with the affected customers. I was very proud of the fact that McAfee really stepped up and I think set a high standard to the rest of the industry to follow if there ever are issues like that again. In terms of our most impacted customers, every single one of them who had a pending renewal, renewed with us.
We're channel partners adequately compensated?
Thurber: Depending on what it was that they were doing and what it cost them, we came up with a number of different ways to handle that. I have not had any complaints from partners. I think they definitely feel like we did the right thing.
In May you announced a number of new initiatives for partners beginning with deal registration and deal protection. How do they benefit partners?
Thurber: These are our Partner Margin Advantage programs. We have deal registration as well as deal protection, and I think deal protection is still rather unique out there. If you have a registered deal you get additional points for closing that deal, but in addition, if we're working jointly with a customer and we determine that there needs to be special pricing for that customer, only the registered owner gets access to that special pricing. We're taking a risk with our partner on that. Even if a customer decides they want to go with a different partner, we hold the special pricing to the incumbent or the registered partner. We're in the process of rolling this out globally.
Also a successful program of ours is called McAfee Rewards, where we actually provide reward points to individuals in the partner community. An individual account manager or sales engineer can gain points that get loaded onto a McAfee Rewards card, and they can use it for both cash and merchandise. They can even donate the money that the points would be worth to non-profits, so that is unique. That gives us a relatively easy chance to give back.
You mentioned some other changes to the channel program in your blog that may be coming down the road around enhanced deal registration product eligibility and a channel playbook and rules of engagement that you're working on.
Thurber: One of the things we've been working on is defining rules of engagement so that not only our account managers know how to work with the channel, but we've also been very up front with the channel on how we're going to work with them. That's a process, to be honest, to get that rolled out. We have been internally communicating it and have had good luck. I think we all admit that the smartest account managers realize they can do so much more by leveraging the channel than trying to do everything themselves.