CRN Exclusive: Informatica Ready To Embrace A Channel Strategy
Informatica, as it strives to lead an increasingly competitive data integration and management market, revealed on Monday a sharp pivot toward embracing an indirect channel sales model.
The Redwood City, Calif.-based software vendor, founded in 1993 and bought by a private equity firm last year, has traditionally focused almost exclusively on direct sales, with little effort to accredit or incentivize partners.
That's all about to change with a new program that goes live on February 6, channel chief Rodney Foreman told partners at a kick-off event in Las Vegas.
Foreman, who joined the company last summer after many years at IBM, led the effort to overhaul the previous program with several new accreditations, financial incentives, and partnerships with global distributors and systems integrators. The goal is to ramp channel sales from 5 to 40 percent of Informatica's total revenue within the next five years, Foreman told CRN.
"This is new to us. We have not had an authorized partner program," Foreman told CRN. "In the past, anybody could sign up and be an Informatica partner."
The previous program treated partners as an afterthought in driving sales, without providing them any means to validate their expertise and earn credibility in the eyes of customers. But clear trends in the industry, and customer feedback, necessitated a shift to the channel, Foreman said.
"Customer buying patterns we see point to a preference for buying from partners," Foreman said. "We know that’s a trend in the market and that's why we're embracing this new channel model and working with distributors."
Changes will start with a subtle rebranding.
The program was called the Inform Partner Program, but that's being scrapped for the more obvious moniker of Informatica Partner Program.
The channel strategy also leans heavily on newly signed agreements for global distribution from Arrow and Avnet, as well as Tech Data in Germany and Ingram Micro in India.
"We are bringing on the distributors, and they already are bringing on major new partners," Foreman told CRN. Many of those new partners are attending the program's kickoff event this week in Las Vegas.
The Informatica Partner Program introduces a multi-faceted approach for partnering with solution providers, offering incentives for various channel models: reselling on-premises and hosted cloud solutions, embedding those products in larger systems and referrals to the direct sales team.
"If you want to have a robust channel program, you have to be able to support the partners and their business model," Foreman told CRN.
The main focus when revamping the program was guaranteeing predictable and competitive revenue for partners through clear payment schedules and rebates, he said.
"In the past, we struggled with being predictable and consistent," Foreman told CRN. "It was the Wild West in terms of when they were going to get paid with each deal."
To remedy that problem, Informatica has created a comprehensive channel price book defining margins, rebates and other incentives. Some of the prices vary between different geographies to reflect those market conditions.
A 20 percent front-end margin is split—five percent to the distributor and 15 percent to the VAR. The reseller can keep the entirety of revenue that goes above the "street price" of the product.
Five to 15 percent rebates have been included to encourage other aspects of partner behavior, such as signing net-new customers, renewals and cloud subscriptions as Informatica pursues a leadership position in cloud-based enterprise data management.
More rebates could be introduced in the second half of 2017 to encourage specific competitive postures, Foreman said.
Current Informatica partners have 90 days to obtain authorizations under the new program. The company is developing a training roadmap with accreditation and certification programs intended to lend partners credibility in the market.
Foreman said Informatica anticipated some analytics and big-data-oriented solution providers to be drawn to the new program, but was surprised to see other channel constituencies.
Among them are security-focused partners, as well as those working with the internet of things (IoT) technologies—two solutions increasingly reliant on the integration and analysis of heterogeneous data sources.
Informatica is also introducing the Solution Advantage Program to help global systems integrators embed its products. Industry giants like Cognizant, Wipro, Deloitte and HCL are getting involved, Foreman said.
"It gives them different licensing models that lend themselves to including our solutions, and a way to make recurring revenue off of our software," he said.
Foreman and Lou Attanasio, Informatica's chief revenue officer, both came to the company from senior channel leadership positions at IBM. They're leveraging their relationships from Big Blue to bring into the Informatica channel traditional IBM partners like Prolifics and Sirius Computer Solutions, Foreman told CRN.
Foreman and Attanasio know what they're doing in scaling a channel, said Kai Hsiung, chief revenue officer at Silverline, a Salesforce-aligned systems integrator that leans on Informatica to integrate data from third-party sources with the CRM platform.
"They've done it at IBM at a much larger scale," Hsiung said. "They have all the relationships. They know all the decision makers."
For Silverline, an inaugural partner of the new program based in New York City, Informatica's channel effort represents "a real opportunity to grow our cloud integration business," Hsiung told CRN.
"For customers in hybrid environments, Informatica offers an entire suite of data quality and B2B tools
Now they're focusing on the partners who have all the domain expertise," he told CRN.
The inclusion of distributors like Arrow, who deliver large VAR networks, will enable Informatica to scale its partner ecosystem rapidly, and the improved margins and rebates will drive further partner interest, he said.
The channel incentives, distribution deals and infrastructure for onboarding partners creates a "volume play" for Informatica, with "more people selling their stuff."
Silverline already drives profit from integrating Informatica in its cloud solutions, but expects to see more revenue from that part of the business, and will likely invest it back into growing the Informatica practice.
"They're thinking a big game," Hsiung said. "These were the changes people were looking for when they were privatized. "