SearchITChannel caught up with Mark Enzweiler, vice president of global alliances and channels for Red Hat Inc., last week at the vendor's Summit 2013 in Boston, an event that drew almost 3,500 attendees.
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According to the Red Hat channel chief, the company has 5,000 channel partners worldwide, a number that covers a broad swathe of the partner community, i.e., value-added resellers (VARs), systems integrators, independent software vendors (ISVs), etc. Red Hat has about 700 channel partners in North America.
A field force isn't going to embrace a partner unless they believe the partner knows as much or more than they do about the technology.
vice president of global alliances and channels, Red Hat Inc.
This year, Red Hat's channel business accounts for about 65% of the company's revenue. It would like to boost that figure to 70% at some point in time.
We asked Enzweiler about the company's partner strategy as Red Hat moves from being product-driven to solution-driven.
What are the biggest challenges to getting Red Hat's partners onboard with the company's new strategic direction to move away from being a Linux company to a more diversified open source company?
Enzweiler: We follow a philosophy that less is more. It's not a problem to recruit partners. What we're looking for are the right partners. The challenge is … all the things that we're announcing now [are] very attractive to them.
As we put this together into a holistic story around cloud and OpenStack, the response we're getting from our partners is fantastic. Everybody is talking about "open." [Partners'] customers are telling them that … Red Hat is the steward of "open." So they're more attracted to say, "I'm with Red Hat. Here's what we can do."
Our partners … want us to give them the same content that we give our reps. This leads to a couple of challenges. In the past we had two technologies and three primary routes [to market]. Now we have five by six. That adds complexity, and as we move there, we don't expect a Red Hat rep to know about everything. So what we do is segment our business and our partners by geography, route, technology specialization, vertical, for example. Then we overlay that with our more-is-less strategy. And we'll go to market with a new product or new solution in North America with 25 partners, for example, and that's where we're going to concentrate our investment and enablement, etc., and they're going to build the on-ramp for the rest of our partners.
Now that's not to say we'll only have 25 partners, and neither is the ramp going to be open to everybody. We want to be a little more intellectual about this.
It's a lot of work to do this level of segmentation, and sometimes there's a void and we don't have the right partner so we have to go and recruit them. Then we have to race around to make sure we have the right enablement material to train them all, because let's face it, a field force isn't going to embrace a partner unless they believe the partner knows as much or more than they do about the technology.
To meet this skills enablement challenge, we now have Rachel Cassidy as vice president of global partner strategy and enablement.
So will Red Hat be looking to recruit very technical partners?
Enzweiler: We're sticking with our more-is-less philosophy and building the on-ramp. We're interested in partners who can build the design wins and check the reference architectures.
What's the profile of a Red Hat partner?
Enzweiler: One of the dimensions of how we profile our partners is by product. So, for example, in the middleware space, Accenture is a prime middleware partner. On the other hand, if you're looking at RHEL [Red Hat Enterprise Linux] and data center migration, you might go to regional players, such as Consilium 1 or Tata Consultancy Services, or the guys out of India.
As you get to the higher end that requires longer-term, more embedded people, we tend to go more with the Accentures, IBM Global Services, the bigger guys. Because it really requires quite a bit of investment to be an expert on say, middleware. It doesn't require as much expertise on RHEL.
Are most of the Red Hat opportunities for partners with very large customers? What about midmarket companies?
Enzweiler: We get thousands of new customers every year, and our partners are getting more inquiries from customers getting curious about this "open" thing.
There are a couple of things that are very attractive to a partner that they sometimes don't appreciate at first. In just about every other company, a partner [can] sell all year long and at the end of the year the counter goes back to zero and you start selling again. Whereas, [at Red Hat], you sell it and next year it's a renewable event [because of Red Hat's subscription-based pricing model] so it's a true annuity model. The other thing … is that even though they may not have the core competency in the processes to do renewals, we'll do it for them. We'll call the customer and then push it back to the partner, who places the order.
Enzweiler: Globally, no. It's more of a problem in North America because we have a concentration of people here. [If a] deal [is] lost or [goes] down a few notches on the radar, [that can be very significant to that one partner]. The fact that we showed up and were going to sell the same services was a problem. I think the lines of demarcation are getting better on how we select accounts. We try to concentrate our services just on the consultative end.
Some of our global partners will [bring in] our consultative services.
But once you go below the largest accounts, to the next tier, we run into some conflicts but not [many] because we don't have many services people left when you get down [there].
I told some of our partners … to go out and buy a couple of our guys for a year and shadow them. It may be a little radical but … a regional systems integrator with 700 to 800 services people … can certainly buy a couple of Red Hat guys and put them in their accounts, move them around and learn about open source and educate their SWAT team to do the same thing.
This goes back to our challenge with enablement and why we now have Rachel Cassidy, who sits in the services group where the content is created. This isn't about sales or pre-sales; we're talking about the about delivery of solutions. We've had lots of customer engagements and what we need to do now is to package our IP in a format that we can transfer to our partner base. That's where my focus is now.
What attendees at Red Hat Summit heard is that it's all about delivery. That's what's at the forefront now.