Citrix Partners Fuming Over 'High Touch' Direct Sales Program6:19 PM EST Wed. Nov. 14, 2012
Some Citrix Systems channel partners are grumbling about what they perceive to be an alarming drift by the vendor toward direct sales relationships in Fortune 1000 accounts.
Their angst stems from Citrix's "High Touch" program, which launched in January and saw Citrix take the lead on sales to more than 1,100 enterprise accounts, including some belonging to partners. At the time, Citrix explained that many large customers were seeking a direct relationship, but said partners could apply to be "invited" into High Touch accounts and continue to participate in deals.
In the intervening months, though, Citrix's High Touch program has quietly expanded in scope to include some midmarket accounts, several sources told CRN recently. As a result, partners are missing out on renewals and maintenance money despite having done the considerable legwork involved in bringing in customers.
"We are seeing accounts being designated High Touch that we had not even imagined being considered as candidates," said one Citrix partner, who requested anonymity. "We had a couple of high midmarket customers that were getting ready to make very large healthcare IT purchases, involving millions of dollars in licensing, that suddenly were added to the High Touch list."
"We're doing work without compensation," another longtime Citrix partner told CRN, speaking on condition of anonymity.
In an email interview Tuesday, Mike Fouts, senior director of Americas channels and field operations at Citrix, said the High Touch program launched with 1,108 accounts in the U.S., Canada and Latin America. In July, Citrix whittled down the program to 842 accounts after deciding that certain customers would be better led by partners.
High Touch accounts are typically larger than 10,000 employees and 5,000 desktops in size, Fouts told CRN, adding that Citrix also takes into account the size of the opportunity when deciding whether to designate an account as part of the program.
In addition to an invitation from Citrix, partners seeking access to High Touch accounts must also be included in a Citrix-developed account plan to be eligible for back-end payments, known as Citrix Advisory Rewards, or CAR. Partners that don't meet these criteria can still sell Citrix products and services to High Touch accounts, but they don't have nearly as much financial incentive to do so.
"When you're not invited to be the reseller of record, you are not qualified to earn the registration. While this doesn't preclude you from selling products, you have no advantage and very narrow margins, unless the Citrix sales team is willing to make a one-off exception," Scott Miller, director of cloud and virtualization at World Wide Technology, a Maryland Heights, Mo.-based solution provider, told CRN.
Large commercial and service provider clients will account for about 80 percent of the roughly $5 billion in top-line revenue that World Wide Technology expects to bring in this year, according to Miller. As a result of the High Touch program, WWT's Citrix sales funnel is down 38 percent year over year in these portions of its business, Miller said.
"Citrix's unwillingness to partner in the large enterprise accounts that we sell to has caused this decline," Miller said.
Citrix has invited WWT into federal accounts, which comprise the remaining 20 percent of WWT's business, and this joint activity has led to a 341 percent increase in registered approved deals and revenue, Miller noted.
"This increase would only be possible if we were truly bringing value to both our clients and our Citrix sales team," he told CRN.
NEXT: Citrix Offers Its View Of High Touch Program
Further complicating matters, Citrix isn't inviting partners to take part in High Touch deals at anywhere near the rate the channel had expected. One partner that had nearly 200 of his customers added to the High Touch list told CRN he ended up being invited into just one of these accounts.
"Needless to say, that doesn't give me a favorable impression of the [High Touch] program," said the source, who requested anonymity.
Citrix's Fouts, however, insists that the High Touch program has been consistent since its inception. "With High Touch accounts, invitations to partners cannot be assumed," he told CRN. "In many cases, invitations are based on the progress of the sales cycle, where a partner's capability is most needed, as well as the specific partner skill set and ability required."
"For High Touch accounts, Citrix leads the sales motion through our sales teams. Based on the progress of the sales teams, we'll engage and insert partners where the most leverage can be gained," Fouts told CRN.
Citrix certainly isn't the only vendor to decide that handling large customers directly is the best course of action. Some partners see the High Touch program as part of Citrix's goal of becoming a $5 billion company by 2015.
Whatever the reason, Citrix's High Touch program is attracting attention because the vendor has a solid channel track record and hasn't previously shown a proclivity for direct sales.
"It is strange to see Citrix take a direct sales approach when other vendors in the data center are going the other direction," one partner told CRN. "This threatens our trusted advisor status and may eventually cause us to look at other vendors."
Despite the friction the High Touch program is causing, some Citrix partners believe it's working as advertised. Paul Kunze, director at IntraSystems, a Braintree, Mass.-based solution provider, says the program is helping separate the wheat from the chaff when it comes to partners adding value to enterprise accounts.
"If a Citrix partner provides value through technical capabilities in an account, rather than acting solely as a fulfillment arm, then they will receive program benefits," Kunze told CRN. "In a positive way, the High Touch program limits competition in accounts where we have strong customer relationships in place."
With the High Touch program, Citrix is setting what appears to be a high bar for partners. While there is still plenty of SMB and midmarket business for the channel, partners that want to go big game hunting in the High Touch program will have step up their skills investment.
PUBLISHED NOV. 14, 2012