Christian Alvarez, the Senior Vice President of Worldwide Channels for Nutanix, speaks about how channel partners can move towards “everything as a service”
What should channel partners do to remain relevant and successful in a Hybrid Multicloud World?
In addition to rapid innovation and growing complexity around enterprise technologies and services, IT decision-makers, service providers, and channel resellers are dealing with an industry shift to subscription billing models from traditional sales, leasing, or licensing models. Now more than ever, the channel really needs to move faster to “everything as a service”. They need to adapt really quickly to subscriptions. Why? Because customers are asking for this.
We see customers’ reliance on and expectations for enterprise cloud capabilities intensifying. Many are building the future of their businesses on hybrid multi-cloud IT operations, which blend private and public cloud services. Increasingly that requires interoperability, including automation, across different technologies and services. This paradigm shift in customer expectations and cloud acceleration is leading prudent service providers into new partnerships.
You can’t do it alone. Scaling a business and sustaining profitability requires working on creating partnerships that give customers a simpler way to drive their digital transformation. That involves consulting, design, new products, integration, customization, and 24×7 support. Partnerships can provide the expertise needed to promote, sell, design, integrate, customize, deploy and support new applications on-premises, in the public cloud, or in hybrid cloud architectures. They allow providers to expand their offerings to include services like managed security, IoT solutions, and analytics to differentiate themselves.
That’s what’s behind the Nutanix Elevate Service Provider Program. It helps providers pursue partnerships that can improve customer experiences, competitiveness, and profitability. There’s no minimum commitment or cost to service providers to join the program, which allows carriers of all sizes to participate. Many customers are making their on-premises IT capabilities work with different public cloud services. The partnerships are critical for ensuring interoperability and reliability, which are essential to IT teams, especially as many move to hybrid multi-cloud operations.
Business-customer transitions from IT capital expenditures to subscriptions and consumption-based operational costs are blurring the lines between system integrators, software vendors, and service providers. Multiple vendors may be responsible for a single customer experience. Going forward I see service providers and resellers redesigning their sales, post-sales, and support approaches to address cloud and distributed enterprise solutions, especially as customers have had to embrace more distributed architectures to reach remote-work employees.
Partnerships are proving especially useful to customers moving to the cloud for the first time. By working together, partners can give customers confidence that they’ll be supported by a broad array of professionals working together to uphold clear service-level agreements (SLAs) in the cloud. Partner ecosystems can also help customers sort through the complexity of what applications, networks, cloud services, storage solutions, and other IT components they need.
The seismic shift to distributed workforces and an expanding universe of technology solutions have required different and diverse service provider skillsets. Providers are being called on to build and support individualized solutions aligned to different customer objectives and budgets. That can be a tall order without a trusted partner who can supply the required expertise.
How have you updated your channel program to align with modern-day trends?
‘Channel Autonomy’ is one of our key objectives when it comes to our channel program. We wish to empower our channel ecosystem so that they can independently drive our business with minimal involvement from our sales team. We want to train them and make them true champions of Nutanix and in this way the partner and distribution community will be a true extension of our company.
We have spent the past two years shifting our resellers away from legacy sales and compensation models. Our Elevate program, launched last September has accelerated this. The program emphasizes expertise and capability oversize and pays on a recurring-revenue basis. We have moved away from a traditional tiered partner program to a 100% competency-based program that will help channel partners drive more profitability.
We have introduced a concept called “disaggregating the incentive stack” that motivates partners to sell more and keeps them in better touch with their customers. What’s more important than the initial sale is the lifetime value of a customer. From that perspective, Nutanix could reward partners with premium incentives along the lifetime of the customers’ journey — at the point of sale, at activation, at renewal, at expansion, or at another point. The goal is basically assuring that the customer is going to get the most value out of their investments. This is an incredible way for partners to potentially earn more incentives.
We are also investing a significant amount of money, along with our distribution partners, in order for them to become a Distributor Champion, which is the highest tiered level and has the highest earning potential. These distributors have to be integrated with us and have a very tight secured B2B integration via API’s. Nutanix resellers will now be able to point and click to get a quote or get a renewal quote with the highest level of accuracy and speed. So this B2B integration is about time, accuracy, and velocity. The Elevate Distributor Program is going to significantly enhance the resellers’ experience, not just with us, but also with the distributors.
Also, with the distributor’s ability to have enhanced incentives by ticking all the right boxes – showing growth, leveraging our performance-plus deal registration that is all built around trust, alignment, and growth — distribution can go back and enhance their own incentives model back into the reseller program. So everyone wins.
What’s your message to partners?
We are very committed to the channel and are cognizant of the fact that our channel partners are the only way that we’re going to be able to reach our next level of growth. Our ethos is that ‘We Leave No Partners Behind’. We have evolved and transformed to enable us to succeed in the modern marketplace. We continue to enhance our partner ecosystem and work closely with our partners. We protect the interests of our partners, support them day in and day out and work hand-in-hand with them. We don’t take deals direct. This is something that is absolutely integral to us.
What do you see as market trends when it comes to the channel?
Legacy sales methods and incentive models are quickly becoming a thing of the past. As customers move to consume IT products as a subscription service rather than a one-time purchase event, vendors will face pressure (and opportunity) to align partner incentives with that of the customer’s lifetime journey. We think that disaggregating the incentive stack will create more sustained value for customers.
We are exploring how we can incentivise partners throughout the full lifetime of a customer’s engagement with us. We believe it will better enable partners to deepen their engagement with customers, and benefit partners in a more sustained way as they drive solutions and services development with us and their customers over time.
We believe that there is an untapped opportunity in giving the right partners secure access to telemetry. This will be a whole new dimension of validating solution adoption and usage, and ultimately will better enable partners to provide proactive and reactive support. If partners have access to these insights, they will be able to identify new opportunities to improve customer experience and success.
We believe that customer experience and success insights are another tool in partners’ toolboxes to drive greater growth, intimacy, and value with the customer. In the next year, we anticipate that there will be greater demand among partners for these insights and to grow these practices alongside vendors. Along the way, the term “sales rep” will likely phase out as “customer success managers” become the norm.
Future-minded channel organizations are actively looking at DevOps as one of the next practices to drive differentiation and growth. Low code / no-code development methodologies will transform solution delivery – slashing engagement time & costs and thus providing a significant competitive edge. These organizations that build these practices will not only gain new customers but will attract the next wave of digital-native channel professionals entering the workforce embracing these new approaches. This will become a new source of vibrancy, innovation, and growth for organizations.
We anticipate that the alliance landscape will see even more examples of vendors finding common ground as demand grows for more complete, multi-technology solutions. Alliances will be driven by not only the customers of today, but the customers of tomorrow as the technology landscape drives innovation and also more complexity. This isn’t a new trend – Nutanix forged strategic relationships with Red Hat and Citrix which have both proved to be of great value to our partners with solutions that are certified and supported together.
Nutanix continues to support VMware ESXi and Horizon View, to enable customer choice. Nutanix partners with AWS and Microsoft Azure because the cloud is no longer a destination but a collection of capabilities that customers want to work together seamlessly as a hybrid environment. Ultimately, we vendors have learned as an industry that there is a vast set of needs out there to meet, and we can absolutely find ways to partner well together.