Palo Alto Networks Preps For (Another) Channel Close-Up

The exploding popularity of Palo Alto's firewall technology is front of mind for partners, said CEO Lane Bess. Palo Alto's firewalls give users control and visibility of applications and content by user, not just by IP addresses or ports, which most solution providers agree is disruptive to an industry segment -- firewalls -- that to Palo Alto has been stagnant for some time.

What then, for Palo Alto's channel? The company in early January 2009 eliminated the position of then-channel chief Nancy Reynolds, who it had recruited only four months earlier from Trend Micro.

At the time, Bess told that Palo Alto's venture capital backers had become nervous about the recession, and those nerves led to thoughts that Palo Alto wasn't yet ready for a full-time, global channel chief. The position was cut, and Reynolds was let go.

According to Bess, his new worldwide marketing boss, Rene Bonvanie, and several Palo Alto VAR partners, the decision to wait on a channel chief appears to be paying off with no loss of momentum in Palo Alto's growth.

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As one solution provider put it, "If they've lost anything except that person who was in channel chief role, it's news to us."

Bonvanie was announced as Palo Alto's head of worldwide marketing in September and brings to the company more than 25 years of IT and channel experience. He was most recently at Serena Software, and before that was senior vice president of global marketing at SAP, chief marketing officer at Business Objects, senior vice president of worldwide marketing at Veritas, and vice president of product marketing at Oracle.

Bonvanie is not, however, Palo Alto's new channel chief, at least in the traditional definition of the phrase. For starters, said Bess, the role of "channel chief" is essentially still his, although Bonvanie will play a key role in driving Palo Alto's channel agenda.

"I often don't view the channel chief role as being as much of a marketing role as a sales and channel engagement role," Bess said. "I can't be everything. Rene is indeed helping me drive the channel agenda forward. I need someone to be my partner in crime and to take the program and the channel recruitment to the next level. Being a seasoned guy, he's going to be attached to my hip. While I don't necessarily label him as my channel champion, he's my partner in championing our channel. That's a long story short."

Reynolds has since gone on to a channel role at Dell.

"We still keep in touch," Bess offered. "Nancy was looking to transition to something else to help me sort out the early stage of Palo Alto. I had Nancy in a close confidant consulting role, working for me for the better part of six months to give what I consider the Ph.D assessment of what it looked like we needed to do. We had a very open and honest discussion. She said, 'Lane, the kinds of things I can do and want to do for you are the kinds of things you're probably a year away from.' She had a lot of different companies coming at her for something full time, and I said, 'Nancy, I don't want to stand in the way of you getting into something challenging on a full-time basis while we get this thing up and going.'"

At the time of Reynolds' departure, partners told they didn't see too much of a snag in Palo Alto's progress with the channel so long as its product portfolio remained strong.

Nearly 11 months later, Palo Alto VARs reiterated those feelings.

"It didn't affect us," said Jeff Wolach, vice president and CTO of Sinnott Wolach Technology Group, a Miami-based solution provider. "Honestly, I don't think she was there long enough to really make an impact. They made it all happen for us at headquarters and have always been very interested in accommodating the partners as best they can."

Holach said he didn't see the need for an assigned channel chief at the moment, seeing as Palo Alto has been strong on keeping its partners engaged without one person holding the title.

"We really couldn't have asked for a better relationship. I'd say about 50 percent of our business is Palo Alto," he said. "And the channel chief? That's something you have to ask yourself these days. Making sure the communications are consistent to partners and the program has teeth, yeah, sure, that's important. But i like the approach Palo Alto is taking, and that's 'let the sales guy pick the partners he wants to work with, make a time commitment to those partners and not dilute the market by adding too many.' Not going out there and saturating the channel even though they have an awesome product is what's made them work."

Palo Alto's Next Wave partner program will be unveiled next month, and while Bess and Bonvanie didn't provide exact details, they said that Palo Alto partners will enjoy better margins and MDF as well as the ability to sell more physical Palo Alto gear along with its firewall platform. Bess said there will be better lead generation support from Palo Alto, too.

The company in October hosted a channel conference in Europe, and earlier this week held an advisory board meeting of North American VAR partners in Santa Cruz, Calif.

According to Bonvanie, who sat down with at this week's Interop New York conference in Manhattan, the challenge now is to capitalize on the early buzz on Palo Alto with stronger marketing campaigns and better rewards for existing VARs.

"We've been very good at generating early demand and ensuring that marketing becomes an important part of our channel DNA," Bonvanie said. "Now we're going to get into more opportunities. Partners are loving the way we're working now. They don't want us to turn into something else. We don't want to become the un-Palo Alto Networks and I'm going to make sure that doesn't happen."

Both Bess and Bonvanie suggested that Palo Alto's earliest VAR partners were those who understood that their firewall technology is different than the firewalls offered by the Ciscos and Check Points of the world.

"That's the biggest challenge I've had," Bess said. "The Ciscos, Check Points -- they've held a gun to the partners' heads, I think, and they said, 'If you dare to pick up Palo Alto, you're out of favor.' It takes a partner with a real good sense of their future to bring on a product line that's in some ways disruptive."

Wolach suggested, if it wasn't quite so dramatic as guns being held at heads, there was plenty about Palo Alto's firewalls to scare vendors like Cisco.

"They've put a lot of effort into our relationship and a lot of effort into their product," he said. "What I've seen in their new channel program has a little bit more teeth in terms of incentives, plus a more formal registration program that I think they're considering using with a tiered architecture -- you know, a typical gold, silver, bronze type thing. But we've been blessed and fortunate with them. This is a great company."

"We have a killer technology. Killer." Bess said. "Two years from now hopefully there's going to be a very big IPO. So start saving your pennies."