Channel partners, who have become the primary route-to-market for Red Hat, are in for greater opportunities as Red Hat expands its channel focus in 2013.
That's the word from Roger Egan, Red Hat's vice president of North America channel sales and development, who on Wednesday told solution providers attending the 2013 Red Hat Partner Conference that the channel was the only way for Red Hat to grow.
"In order to deliver solutions to the market place, we really have to work together," Egan said.
Red Hat's emphasis on the channel is not new, Egan said. For instance, the company's CFO spends the first five minutes of every quarterly financial call talking about the partner side of the business.
In the December third fiscal quarter financial call, Red Hat said about 65 percent of its revenue comes from sales through the channel, Egan said. He also pointed to a presentation from Tuesday at the Red Hat Partner Conference that the company will soon see 100 percent of its business touched by partners.
"When I heard this yesterday, I was excited," he said. "I had to call my wife about it last night and to pinch myself."
Red Hat in 2013 will continue to build on its channel success of the past few years, Egan said, with a focus on four primary: areas including channel engagement, alignment, capabilities, and community.
On the engagement side, Red Hat last year talked about its rules of engagement and coverage, but this year it will focus on field engagements with a smaller number of accounts. As a result, Egan said, the company will have thousands of "not-named" accounts in which it will need to get partners engaged.
Red Hat is also re-aligning its channel programs to treat all partners in a more similar fashion in terms of benefits, Egan said.
The company is also revamping its specialization program to provide differentiations that are more meaningful to partners and customers while expanding its incentives for different levels of partners including enhanced incentives for deal registration and deals in specific technology areas, as well as new incentive for referral business, he said.
The result will be an integrated return-on-investment model, Egan said. "It has to add value to you, value to us and value to customers," he said.
NEXT: Red Hat Working To Better Engage The ChannelOn the community side, Red Hat is expanding its use of social media tools to communicate with partners and gather feedback from those partners as well, in order to build world-class partnerships, Egan said.
Egan told CRN in a separate conversation that Red Had has evolved significantly over the last five years from offering a single product -- Red Hat Enterprise Linux -- to talking with partners about more cloud-like solutions including information-as-a-service and platform-as-a-service.
"Our position in data center infrastructures has changed dramatically," he said. "We need partners. And, they need us."
Egan also said that Red Hat recognizes a need to make its influencer incentives more robust. "Many partners integrate solutions, but they don't sell the technology," he said. "We need to make sure the benefits are better for such partners."
Egan said solution providers will also see Red Hat engage in developing more solutions for the channel in conjunction with its alliance partners.
"Building a solution today often can be done with reference architectures and by pulling together different parts of the solution together into a whole," he said. "And then the solution becomes much more valuable for the marketplace."
Mike Thompson, president of Groupware Technology and Computing, a Campbell, Calif.-based solution provider who attended the Red Hat Partner Conference, said his alliance with Red Hat fits the partner-led culture he is seeing at the vendor.
"Red Hat has become an important piece of the total solutions we talk to customers about," Thompson said. "Red Hat makes it easy for us to leverage our expertise on our solutions."
Dean Bedwell, director of new business development and software solutions at OnX Enterprise Solutions, a Toronto, Ontario-based solution provider and services provider, said Red Hat has been serious in its focus on the channel and on gaining relevancy with partners.
"They have a very compelling set of things they bring to customers and are doing it in a very collaborative fashion," Bedwell said. "And when you add in all the parts including virtualization, middleware and RHEL, it's a very compelling solution."
PUBLISHED JAN. 16, 2013