CRN Interview: Cisco Vet Michael Kay On Joining Veriflow And The Launch Of A 'Selective' New Partner Program

New Veriflow channel executive Michael Kay spoke with CRN about driving growth through partners and the company's new "Veriflow Select" program.

Selective Partnering

Network verification and intelligence vendor Veriflow is preparing a channel charge with a new partner program, and a seasoned channel leader intent on driving growth with a small, handpicked cadre of partners.

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The San Jose, Calif., networking software firm founded in 2012 hired Michael Kay as vice president of business development, making him the firm's top channel executive and has assigned him the task of recruiting and enabling partners in the company's new "Veriflow Select" program.

As the name implies, Veriflow Select will be selective, and will likely bring on 100 partners or fewer. The select few, however, will have the opportunity to design business plans and incentive structures that work most favorably for them, Kay said.

Veriflow's software performs network verification tasks, as well as analytics and network intelligence. It "self-unfolds" in customers' networks, determines customer intent and provides information that customers use to remediate problems.

Under the new program, partners will be front and center as Veriflow seeks to either tighten partnerships with networking hardware vendors or strike a competitive posture with the likes of Cisco, which introduced its own network verification and intelligence products recently.

What follows is an edited excerpt of CRN's conversation with Kay.

What are your goals for the new program?

It's designed to lend value to our customers. Customers are dealing with two major problems in the network. One is massive complexity. They're dealing with workloads, they're dealing with multi-vendor environments, and on top of that, they have change that occurs continually within their network infrastructure. The solution we have to combat that is our Veriflow network verification platform. It's designed to allow you to preemptively or predictively determine what went wrong within your network or help you understand what within you network is violating the intention you designed it to fulfill.

How important is it for the program to be efficient for partners and the company?

What we're trying to do with this program is accelerate the time to value, to provide muscle and strength behind our technology delivery capability whether it's through channels or tight links and coupling with technology partners. The program is tied to our strategy, eliminating outages and vulnerabilities in the network and how you fulfill that mission.

How can the channel help Veriflow accomplish that?

It falls into three buckets: the first is beginning to develop expertise in network infrastructure, complex network integration and intent-based networking. That means working with companies that are experts in those spaces, whether you're a solution integrator or a reseller or people that bundle and package technology and offer it to our customers. The second area we have to focus on is interoperability. We don't get deployed in a customer ecosystem in isolation. We usually have to be tightly coupled or very interoperable with an array of technologies that are around us, and those come in the form of all of the network infrastructure we look at and all the services and systems monitoring technologies that may lie within a customers network infrastructure. Finally, looking at delivering extended value to our customers, we will begin to partner with technology vendors for creating systems that get that one-plus-one-equals-three effect. Those will be very isolated, but very strategic types of engagement and collaboration efforts.

How will you approach partner recruitment?

We're going to be selective. One of the things I have learned in my years of building partner programs is that one of the biggest pitfalls companies fall into is they build a program, they sign up as many partners as they can, and you find that you've got a large number of partners that you have to educate, ramp and onboard. It's not delivering value to you, the partner or the customer because you've gone so broad that you've become very, very thin. Our focus is to really seek to partner with a very small number of partners in each target market, be it geographic or vertically focused – key markets for us are health care, finance and retail – or folks that have intellectual property in a particular technology sector. It allows us to minimize or avoid channel conflict.

Will the solution providers you do partner with get a more customized experience than they would with other vendors?

We're going to use this concept of a business plan-driven partnership. Each partner that we engage with, we'll sit down and develop a unique business plan that focuses on what are the target markets we're going to go after, what are the key use cases and what are the value points for Veriflow, the partner and the customer? If it doesn't meet those three criteria, then we really don't have a viable plan. We'll use this plan as a vehicle to create our success metrics for our partnership and investment model. Most partnerships are built around the traditional, three-tier, certification, punitive plan. You invest a lot of money upfront and hopefully [partners] get to a point where they're capable of evangelizing and delivering and if they don't it's just a numbers game. Our is going to be very small and very select.

What measures do you have in place to protect partners' business?

We give the partner a certain level of exclusivity. If we're truly combining our technology with partner intellectual capital that creates a use case that's value-differentiated to a customer, then they are by rights, exclusive. We know there are areas where they're going to bump up against each other, but as part of our plan, we're committed to eliminating this notion of channel conflict. We'll take it one step further and we'll only work with one partner on a given opportunity. If we have a partner that brings us into an account, we will live and die by that partner. I don't want to beat up on Cisco, but we're not going to use the traditional Cisco model where you have seven partners bidding on an opportunity and Cisco is baked into all seven and the differentiation for partners is minimal.

What are you looking for in your ideal channel partners?

We're looking for partners that have complementary strengths in areas where we're focused. We're looking for companies that combine executive and technical selling skills with fulfillment capability. The reason behind that is that our technology is networking technology that is a technical sale and you want somebody who can understand the market as well as the technology. If you don't, you end up with one or the other. What we're really looking for is to scale on both sides. We're looking for partners who are willing to invest in education, solution development, certification. When we talk about investment, we're talking about an investment of time. This is not an expensive program to join. We're not trying to make money on certifications. Most of our certification processes are free. We're looking for partners that are willing to enter into a joint business plan with us.

How are you handling training and certifications?

There's a heavy focus on e-learning with a lighter focus on instructor-led. What we found is that instructor-led takes technical resources from a partner out of the field and burns their time that they'd be spending with a customer or prospect. We've also found in many cases when you do traditional instructor-led for your training, they all fly in for a couple of days, or dial in. They spend two days on a deep dive, they learn something, but their first opportunity might not come around for four months. By having e-learning and simple modules, they're allowed to go back to it and refresh their memory as they're in the process of working on a particular opportunity. We're trying to make is simple for them to get quality education and ramp quickly. We're linking them with our sales teams for collaboration and with other partners in our technology and alliance program.

How does that work?

In many cases, if we're working with a large technology company on a collaboration effort, we view there's an opportunity for differentiation if we introduce it early to some of our partners. As long as we're all in agreement under non-disclosure, we'll bring partners in early so they can build skills, integration practices and competencies around those technologies as they come to market. That creates value for our customers, too.

What's one of the biggest opportunities for Veriflow partners?

The ability for customers and partners to build their own intent libraries. It's easy to build your own customer intents. If you're a go-to-market partner like a solution integrator or channel partner, you likely have some very deep intellectual property in market segments that Veriflow is not very familiar with, whether it's a vertical, or a technology space like segmentation or micro-segmentation. This enables partners to build their own unique intent libraries and monetize them. By carrying those to their customers along with the Veriflow engine, it allows them to monetize. They either take that capability and use it as a professional services engagement doing custom rule development for customers, you may want to convert intent libraries into fee-based intent bundles you sell to the customer. In some cases, it may just be a value-add to services you're offering to customers.

And the partner is the hero?

It creates a tremendous amount of uniqueness for the partner. By taking our engine as a baseline platform and adding their own custom intent libraries as really an automated reflection of their intellectual property, it creates tremendous new monetization opportunities.

Why is now the right time for Veriflow to put this together?

In the evolution of any company, you go through infancy all the way through development, you go through cycles. The first cycle is really getting a product that is technologically sound, meets a business criteria, is sellable and that customers care about. That was the first few years for Veriflow. Last year was the first real year of penetration, of customers really beginning to embrace the technology. We built a small, but very high profile set of customers that are leveraging the technology in their infrastructure. The next step is how do you scale? It's just as simple as let's build a channel. It's complex as we need to build delivery strength, evangelism strength, we need to build strength in interoperability and use that as a springboard for creating on-plus-one-equals-three value propositions. We've reached that point where the focus is scale and growth.

Who are some of your larger technology partners today?

We're still early in our development. We have less than 10 partners now, total. I don't anticipate we're going to have a large amount of partners. Most of those partners fall into the go-to-market arena. We do have active collaborations underway with three partners. One is in the cloud delivery space, one is in the segmentation space and the third is a large networking equipment manufacturer. In the coming months, we'll be making announcements with them.

Do you see the Veriflow platform as something that will eventually partner with a Cisco, or Aruba or Extreme, or is it a purely competitive play?

Network verification is a hot topic now, and we're getting a tremendous amount of interest from networking equipment manufacturers about partnering with us. We had a relationship with Arista that was built a while back. The manufacturers will fall into two classes. There will be those that elect to build verification as a capability and others that don't view it as core to their competency and will look to partner. It appears that the vast number of companies out there today view it as non-contextual and partnering is the optimal arrangement. Does that mean Cisco is not going to attempt to do it? Of course not. They're getting into the network verification space, and it's largely centered around their ACI infrastructure, specific to Cisco environments. We're going to see many traditional networking equipment manufacturers that will view our technology as complementary. We'll begin to see cloud networking providers that might view our technology as a capability as valuable for providing insight in onboarding to the cloud, verification-as-a-service. With the mid-enterprise, there are a number of companies that provide managed network services to them. An addition of this to their portfolio could be highly powerful.

Where are you seeing opportunity in the market for Veriflow and its channel?

It's evolving. The majority of our customers early on fell into those core target markets: finance, health care, retail. The initial target market was enterprise. Our initial partner focus was on those companies that service those industries. When we began we probably had about a dozen use cases that customers really latched onto. Every week that expands. Every time that expands, it creates new partner target opportunities for us, as well.

What are the most important things you need from partners in the early days of the program?

We want to get to oneness with partners. I know that sounds a little 'kumbaya,' but when you're a small company and you're building a partner program, one of the biggest mistakes you can make is getting a bunch of partners quickly signed up and have no ability whatsoever to actually get them to effectiveness or critical mass. The tools we use to combat that are selectivity and business planning. When we look at our partners, we need partners that are upfront around where they're trying to go, their vision and where they're trying to invest in some of these areas we believe are core to building strength in our go-to-market. I look for partners that are complementary in strength. I'm going to look for guys who are willing to collaborate with us in our efforts to build uniqueness around solutions. They're not always the big bellwethers in the channel community. It might be the No. 2 or No. 3. They're nimble and they really see the opportunity to create differentiation for themselves.

What will the program's incentive structure look like and what kind of revenue opportunities can partners expect?

We won't go down the path of a traditional tiered structure where you hit a dollar amount, and you get a trigger, you hit another dollar amount, you get another trigger. It's great on the upside, but it's punitive on the downside. It creates a lot of challenges for partners. We try to make it more opportunistic. We will sit down with a customer. We have base pricing and base incentive models for the partners. Those are typically use-caes-centric. We'll put incentive structures in place for the partners, and they'll be built on what each of us believes the market opportunity is. Rather than us saying you hit a number and you're there, the focus will be around designing a model that creates an incentive for both of us.

How do you keep a model like that from becoming burdensome to Veriflow, is it just by keeping the number of partners overall relatively small?

You have to. The only way you can manage something like that is by having a small set of partners that you'll focus on by segment. The number of segments we find ourselves in continues to grow, but within a given segment, we're trying to focus on a small, but highly qualified array of partners. That allows us to manage the program. I don't envision a scenario where I'm going to have 100 partners. Even if I were the size of Cisco, a large company, by creating an opportunity for a smaller number of partners that still gives you broad coverage of the target market, you can be successful.

What are the main tenets of the program?

The partner program is going to be built on three pillars. The fist will be our Veriflow channel partner program, which is really focused on engaging with a small, but highly qualified integration and resell partners. That doesn't always mean the largest bellwethers in the industry, it's those that align themselves strategically, capability-wise and value-wise with where we're trying to go as a company. They're going to build that technical expertise and be able to create out-of-the-box solutions that we can offer our customers together. It's really about simplification of delivery, and building that delivery strength.

Program tenets, continued.

The second area is our technology partner program, which is really around working with either the network infrastructure technologies that surround us, or the workflow management platforms we need to integrate to ensure we're interoperable, that we've got good solution connectivity between our products and theirs and in some cases, to create those deeper technology linkages focuses around companies that are key to our particular customers. That would be an ongoing, technical collaboration effort based on interoperability and extending value through deeper integration.

Program tenets, continued.

The last pillar is our alliance partner program. It's more focused on aligning Veriflow with what's happening with evolving standards or keeping us at the forefront of the evolving standards that are occurring within the networking space. In this particular program, we'll be focused on working with the industry forums and ecosystems whether it's in intent-based networking or autonomous networking or network verification. We'll be staying active with the communities that are driving standards in those spaces. It's purely the ability for us to maintain leadership and stay at the forefront.