QTS Going 'All-In' On Data Center Partners With New Compensation Strategy

Data center specialist Quality Technology Services (QTS) Realty Trust is revamping its channel strategy by shifting its compensation model in favor of solutions providers while also ensuring customer renewals include a partner.

The software-defined and colocation services vendor has implemented a channel neutral compensation plan in which QTS sales team will still receive 100 percent commission on deals that involve partners.

"Now that there's no compensation cuts for the sales reps, it means everybody can work and communicate freely with the comfort of knowing that everyone's incentives are aligned," said Scott Evars, co-founder of Bridgepointe Technologies, a San Mateo, Calif.-based QTS partner. "It's going to make it better and easier to sell QTS."

Frank Eagle, vice president of Channels & Alliances for QTS, said the compensation shift is "critical" to channel partners confidence and trust in the Overland Park, Kansas-based company.

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"A partner knows that if a direct sales rep can take a deal direct versus going through a channel partner, they'll do that because it means more money for them. So channel partners of all categories love to work with companies that are channel neutral, meaning a dollar sold by the sales exec and a QTS partner is the same dollar revenue credit and commission credit as it would be if there was no partner involved," said Eagle, who has over 30 years of executive sales and channel experience. "That's huge."

QTS will also work to ensure that all customer renewal negotiations in the future will include both QTS and the original partner.

"Renewals are near and dear to our hearts, so knowing that they're going to back us up on renewals and keep us engaged is great news," said Evars. "It means more business for us and other channel partners."

The global services market for data centers is expected to grow from $39.7 billion in 2017 to $77.5 billion by 2022, according to B2B research firm MarketsandMarkets. The major factors driving the services spike include growing data traffic, the need for more cost-effective data centers, and the high demand for public and private cloud.

Eagle said QTS revenues this year are being driven by hybrid IT deals that involve more than one service, along with colocation and cloud services. Global vendor revenue from sales of cloud IT infrastructure reached $15.4 billion in the second quarter 2018, up nearly 50 percent year over year, according to research firm IDC.

"The data center services market is going to grow exponentially. It's for colocation, or cloud – whether private or managed public – it's growing like crazy," said Eagle.

QTS offers a slew of different solutions and services for channel partners to sell including hosted private cloud, AWS Direct Connect, hyper-scale solutions, and a wide variety of managed services around connectivity, hardware and monitoring. The company touts itself as the only data center provider capable of serving the current and future needs of hyperscale and hybrid colocation customers through a software-defined data center experience.

One key solution helping partner sales is the QTS Service Delivery Platform which provides customers with real-time visibility and access to critical infrastructure, product and business and operational systems data across all QTS deployments from a single integrated orchestration platform. "The Service Delivery Platform gives our customers control and visibility to their services at QTS. That's been a huge selling point for our customers," said Evars.

Approximately 52 percent of QTS' total revenues across all lines of businesses came from the channel in 2017. Eagle said it's possible that 75 percent of QTS total revenues will come via partners over the next 12 to 18 months thanks to the revamped channel strategy.

"The channel is now 'Plan A' for the QTS sales team," said Eagle. "We're 100 percent committed to the channel at every level of the company and within every business unit of the company. The message is that QTA is all-in on the channel."

In another channel move, QTS will make its online training programs available to partners. "Our goal is to be viewed in the data center services industry, compared to all of our competitors, as the go-to for channel partners in the data center," said Eagle.

QTS owns or leases around 20 data centers in the U.S., with additionally facilities in London, Toronto, Amsterdam and Hong Kong. Its footprint spans more than 6 million square feet of owned data center space throughout North America.