Nutanix Channel Chief On New Software Rebates, Attracting Dell Partners With XC Core And Attacking 'White Space'

'This Moves The Needle'

Nutanix's new channel chief Rodney Foreman is shaking up the hyper-converged leader's channel strategy by infusing new software rebates and incentives aimed at making partners the most profitable they've ever been selling Nutanix.

"These rebates are just the start of what we're going to work on to transform and mature our channel business and grow with our partners as we evolve as transform to more of a software company," said Foreman, in an interview with CRN.

The San Jose, Calif.-based company's new incentives unveiled on Tuesday coincided with the launch the new XC Core, a joint hyper-converged infrastructure solution between Nutanix and Dell. Foreman talks to CRN about the market impact of the XC Core for partners, new rebates and incentive, as well as Nutanix's bullish channel strategy.

How big are these new channel incentives for partners?

This isn't a light-hearted announcement. This isn't fluffy. This moves the needle. We're making a strong statement to the partners in the market that we're serious. We want to grow our market share with partners and want to reward them for their growth and investment in us. This is the first time we've had rebate incentives for our software, so this is a first for Nutanix. I'm happy we're able to introduce these incentives to our partners. We have a lot of great momentum in the market, and we want partners to take advantage of that and expand our reach the market … These rebates are just the start of what we're going to work on to transform and mature our channel business and grow with our partners as we evolve as transform to more of a software company.

What are the new software incentives? Are they only for XC Core?

Yes, only with XC Core to start. We're offering a tiered rebate based on the size of the XC Core system. Three different levels up to $3,000 per node when partners sell our software on this new XC Core system. The rebate amount corresponds to the level of system: it's either $1,000, $2,000 or $3,000 rebate depending on the size of XC Core.

Dell is the first vendor that we're starting this promotion on with the new XC Core system, but we will expand [this rebate]. We want partners to sell our software on not only Dell hardware but Lenovo hardware. We have partnerships also with IBM.

What is Nutanix's new customer rebate incentive?

When you acquire a new customer for Nutanix as a partner, you can earn up to 5 percent additional on that software sale. So we also tiered that depending on the number of new customers you bring us during the year that have not bought from Nutanix before. We have a lot of white space and there's a lot of customers that our partners cover that have not purchased Nutanix and we want to penetrate those customers and make them a part of our family. We want to grow our market share. We've got a lot of potential with our partners. Look at CDW, they have 250,000 customers, we want to have those customers reap the benefits of our hyper-converged solution. We want to grow our penetration in the market with our partners. This incentive will focus on white space, bringing us new customers and helps us transition to becoming more of a software company.

What's the third new incentive you're launching?

This last rebate is not going to be offered broadly to every partner. It's a top partner growth rebate. It's just for our top six partners in each region – the Americas, APJ and EMEA. So for each partner, we're setting a goal to grow off of their current growth rate. We'll give them an additional 2 percent if they achieve those goals quarterly. The goal is quarterly growth on top of their run rate. That's 2 percent of their total software sales. You can stack the new customer and this top partner rebate. That's significant. That really shows that we're really making an investment and focused on making our partners successful in the market.

Are you trying to attract more Dell partners to sell Nutanix with these new rebates?

Just a small percentage of Dell partners are Nutanix partners. So we want those Dell partners to be able to sell this system. This allows us to bring on new partners to sell our software on the system and take advantage of – not only the money they'll make from Dell on the hardware – but also what they'll make from us on the software and rebate.

We're working closely with our distributors like Tech Data to work with partners around marketing campaigns, enablement and recruitment of those partners to grow our partner base, then expand our reach into the market with this system. We're really excited about it. It's really going to open up a lot of new opportunity for us, these rebates, and working with Dell on this new XC core. All of these things are definitely going to move the needle for us to drive some good incremental growth.

What new opportunity does the XC Core bring for partners in the hyper-converged market?

It drives us towards a new buyer. We're going to be able to attract more new customers with this system that will allow us to sell more in the mid-market. The way that we're looking at the system is, this system combined with our software – when I talk about software we're talking beyond hyper-converged, also our Calm and Prism [solutions] our complete software offering – delivers great value to our customers. It's driving our transition to selling software.

So is this a new midmarket attack?

We've had success in the mid-market without a doubt, our growth speaks to the success we've had in the midmarket and enterprise. But there is a lot of white space for us and a lot of opportunity for us. We continue to bring on new customers in every quarter. This will help to accelerate that motion.

What's your message to the channel community with the new rebates?

Our partners are strategic for us. We're treating our partners as an integral part of our sales team. We want them to be successful. I mean that's what I wake up every day thinking about is, 'How to I make our Nutanix partners successful in the market?' These rebates are just a start of what we're going to do to make our partners more successful in the market.