Q&A: Red Hat New Channel Sales Chief On Future

As Red Hat prepares to launch its much anticipated channel program, the Linux company appointed Mark Enzweiler, 50, as vice president of North American channel sales at Red Hat. Enzweiler, formerly vice president of global channel strategy and sales at Lenovo, and former vice president of north channel sales and director of global sales at IBM, spoke with CRN's Paula Rooney. Here are excerpts:

CRN: What is Red Hat's channel plan for the next six month and what will you do to drive more sales of Red Hat Linux in the channel?

Enzweiler: Red Hat's business today is 60/40 and 60 percent is indirect. Red Hat has had great success in the channels. If you look at the growth rate of Red Hat, more than 50 percent last quarter, the absolute growth will be there. The opportunity is there and the partners see that.

CRN: What will you do right away?

Enzweiler: There are a couple of things I want to do right away. First, continue to see that steep trajectory on revenue growth and we want partners to participate very heavily in that and get the majority of that business.

Second, software is not my background, so I want to go out and spend a lot of time with partners to develop a clear and concise channel model built around customer segmentation. I want to do that jointly. It's always been my way to operate, jointly. And thirdly, besides strategy, I want to look at coverage, pricing and incentives based on what best serves customers. Red Hat is absolutely committed to the channel. That's why I joined.

CRN: Will you try to push that 60 percent ratio up even higher?

Enzweiler: I'm most concerned that the percent doesn't go down. If it goes up, fine, but as Red Hat grows 50 percent each quarter, the channel would be ecstatic if they can grow their respective businesses that same amount. Those growth rateswe haven't seen that in the hardware business in a long time. We need partners to capitalize on this growth, service customer and build up infrastructure. I don't see [that percent] going down, I see it going up. Partners are thrilled Red Hat is experiencing this kind of growth.

CRN: We've heard for some time Red Hat plans to launch a channel program. Will it have tiered memberships and certifications?

Enzweiler: I know some conversations have been going on at Red Hat about this and I'll be getting reviews on the current model, and incentives and where we want to go. But I'm only two-and-a-half days into it.

CRN: Given your experience in hardware, what is your first impression about what you'd like to do around mobilizing a channel specifically for Red Hat Linux?

Enzweiler: The best channel strategy is built around a rigorous customer segmentation that will work: Who are you selling to and how to service them and measure their satisfaction? Does your model have contingency plans and flexibility to adjust to changes in the market or performance in respective routes? I want to understand all the customer facing entities in Red Hat. You can start from the customer, build it up routes, understand the financials of the routes, Red Hat's and partners' financials, and then you begin to develop strategy and then that dovetails with coverage model " pricing initiatives.

NEXT: Enzweiler's Linux Resume

CRN : Did you look at Linux while at Lenovo? See any uptake of Linux on the desktop?

Enzweiler: I was with Lenovo through June. And we were a single brand company versus multi-brand [at IBM]. I was building the PC hardware strategy and I didn't personally look at the software side.

CRN: What exposure did you have to Linux while at IBM?

Enzweiler: We did, at IBM, but it was software group. IBM was one of early adopters of Linux and put a lot of investment in Linux and IBM's a very, very good customer of Red Hat. You should know that. Red Hat has a great relationship with IBM.

CRN: Do you bring a channel philosophy to software that might be unusual given your hardware background?

Enzweiler: My philosophy is that the rules of engagement and clarity of strategy, roles and responsibilities are important. Secondly, you have to make sure everyone in the value chain makes money. I don't know about software but in the hardware business, you look at the last 15 years and there are wide swings in that. Everyone in the value chain delivering solutions to customer has to make money.

CRN: Are you directing the entire sales force or channel sales exclusively?

Enzweiler: I'm responsible for channel sales and channel strategy so that 60 percent number is mine. Even with the direct sales force, the channel is involved as well, sometime just for fulfillment, sometimes delivering full solution and from strategy. My job is to write the channel route to market and that gets executed by each of the functional sales groups.

CRN: Do you see a big role for the channel improving value added services?

Enzweiler: Absolutely and heretofore that's been one of value propositions of Red Hat. Yes, we are counting on them to participate and deliver these services. Our program we will announce soon.

CRN: A channel program for services? Will the channel play a critical role in delivering services?

Enzweiler: There's been a lot of work done before I was brought on board and we're counting on the channel to deliver services today and they will play that role going forward.

CRN: Novell maintains it has a huge army of resellers and partners and worldwide tech support organization and cites these as huge advantages in trying to compete against Red Hat. How will you counter that?

Enzweiler: I know Novell but I need a little time to get submersed in Red Hat.

CRN: How difficult was it for you to make the decision to switch to software after years of hardware?

Enzweiler: It wasn't difficult at all, once I talked to the guys at Red Hat, understood their model, and marketplace, and their commitment to the channel. Once I gained an appreciation for and understood the personality of Red Hat, it was easy. Now, to get into the software business, if you look at the channel model in the hardware business is fairly mature and the growth is far less than on the software side. The financial model for software is very different, subscriptions, and you know the margin differences. It was a whole new fresh look at the business, and channel business, which I love and understand.