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Rackspace partner strategy seeks to scale company through alliances

With a renewed channel strategy in place, the company's channel chief said work is well underway to make its alliances key to Rackspace's future.

Rackspace has joined the growing legions of companies that see the channel as a critical means for scaling their businesses.

To that end, Rackspace in June appointed a new channel chief, Blake Wetzel, to rework the Rackspace partner strategy. Wetzel came from CenturyLink, where he served as vice president of channel alliances and played a role in building out the vendor's partner sales, ecosystem and programs. Now, as Rackspace's vice president of channels, he is at work on several initiatives to build awareness of the company's portfolio and capabilities within various channel communities and to reshape its programs, with the goal of making its alliances a pivotal force in its pursuits as a managed cloud services provider.

"We see the channel as the opportunity for Rackspace to scale," Wetzel said. "Our intent is to scale ... to grow the channel organization."

During his six months at Rackspace, Wetzel reworked the Rackspace partner strategy to align with five alliance types:

  • Technology partners. These include companies like Microsoft, Dell EMC, Red Hat and VMware, with which Rackspace will support pieces of their technologies or embed the technologies in its stack.
  • System integrators (SIs). Wetzel said that SI partners will "round out" Rackspace's capabilities in professional services, creating a "true win-win for both of us going to market together."
  • ISVs. "[ISVs are] going to deploy their software as a service with us running it in the right environment, whether it's an Azure environment, whether it's an AWS [Amazon Web Services] environment," he said. "But we can put the right application in the right environment, and we can have the right support for their customers."
  • Agents. Rackspace will look to "invest hard" in its agent alliances. "The agent community is very strong ... and it has an incredible relationship with [the] C-suite," he said. Rackspace is targeting agents that have relationships with "specific enterprises." The company recently completed its first advisory council with its agent partners, Wetzel said, where it became clear many agents didn't recognize the extent of Rackspace's capabilities "and what we can actually do." He obviously hopes to change that.
  • Value-added resellers (VARs) and distributors. Wetzel noted Rackspace is currently working closely with a number of large VARs to develop programs for aiding in the difficult transition to a services model. He added that the VAR community is huge, so Rackspace will be "very selective in that space ... but those organizations that we're going to work with, it's going to be a really strong alignment."

Rackspace: Partner strategy to be revisited

Blake Wetzel, vice president of channels, RackspaceBlake Wetzel

In the coming months, Rackspace will revisit its channel programs and partner resources to reflect its renewed strategy. Wetzel noted the company has already revised the Rackspace partner contract for agents and VARs, and it's in the process now of changing its support model and aligning its channel organization with its direct sales resources. "We have a lot of work to do. The strategy is in place. We have a lot of things in motion," he said. "We will slowly start changing systems and processes to make it a better and better experience for the community."

People are very interested in what the future of OpenStack is, but the one thing everyone has in common is ... it's very complicated [and] the skill sets aren't in the market.
Blake Wetzelvice president of channels, Rackspace

As for the market opportunity for Rackspace partners, Wetzel said every partner that believes cloud computing is going to be the future of IT should evaluate if they are going to work with Rackspace. He asserted Rackspace is unrivaled in the breadth of its portfolio and its ability to support, manage and help grow customers' cloud environments.

Rackspace's initiative to highlight its capabilities has apparently stirred interest from partners. Wetzel said partners have told him they have dozens of customers struggling to get their cloud environments running. Partners have also noted growing interest around OpenStack.

"People are very interested in what the future of OpenStack is, but the one thing everyone has in common is ... it's very complicated [and] the skill sets aren't in the market." Rackspace can offer those skill sets, he said, so partners don't have to walk away from OpenStack opportunities if they are concerned about supporting those customers. "They have a partner in Rackspace to do that."

Other channel moves

Rackspace announced in July, ahead of Microsoft's Worldwide Partner Conference, it had become a 2-Tier Microsoft cloud distributor. In conjunction with the announcement, Rackspace unveiled a program for reselling and referring Azure and Office 365, and it said it would look to recruit partners. The move marked an expansion of Rackspace's involvement in Microsoft's Cloud Solution Provider Program, which Wetzel said Rackspace has every intention of continuing. He noted Rackspace is working with Microsoft on how it supplies Azure support to Microsoft partners. 

Rackspace also made headlines this past year with the announcement it would be acquired by the equity firm Apollo Global Management. Wetzel said the biggest question among its channel community was if the acquisition would affect the Rackspace partner strategy. "At this point, it is not," he said. He added that he thinks Apollo is interested in Rackspace's overall strategy because it sees the indirect channel as "a huge market opportunity."

Although Rackspace is looking to drive more partners into its channel organization, Wetzel emphasized the company will not set any specific recruitment objectives. Rackspace, he said, wants to work only with partners in cases it can "create a win-win" relationship -- "when they actually get something that aligns with their strategy and we get something that aligns with our strategy."

"If there's an intersection between those two strategies, it's a great fit. If not, it's a very difficult thing. Then, we're just selling products, and that's not what we want."

Next Steps

Read more about Apollo Global Management's buyout of Rackspace

Get tips on transitioning your business model

Learn how to manage your cloud vendor relationships

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