Over the last year, Red Hat has been on a mission to increase the relevance of non-Linux business, with the goal to find a 50/50 balance between its Red Hat Enterprise Linux and its non-Linux properties.
To do that, it needs to aggressively grow its storage business.
And to do that, it needs to grow the channel around its storage business.
Looking at Red Hat’s overall business, some 60 per cent is done through or with channel partners. The company doesn’t disclose the exact percentage of its business done through the channel, but Ben Cherian, director of partnerships, alliances, and channels for storage at Red Hat, admits it’s “a very small percentage.”
“It’s a fraction of that amount,” Cherian said. “There are a lot of reasons why. The product set is emerging, and as new markets mature, it takes some time to figure out the use cases they map to. It takes a while for the world to get their heads around it.”
But, Cherian says, today there’s a “practical opportunity” in the company’s storage wares, primarily its Ceph and Gluster products. The market, he says, is maturing for software-defined storage offerings, and although the company’s storage channel is still relatively small — measured in tens rather than hundreds — the company is now seeing partners getting “reasonably-sized deals” based on its storage offerings. The company has been in the channel for storage products since the end of 2015, and Cherian said there’s an opportunity to grow the today-small channel into something of significant scale. With that will come the channel volume the company needs to continue the storage business growth.
“Our goal over time is to mature that group [of storage partners], grow that group to 40, to 60, to 100, and to give them the solutions they need, the support they’re going to need, and the additional partnerships they’re going to need,” Cherian said. “We’re looking at everything we can do to make it as consumable as possible for them, to solve all the problems for all sets of partners.”
Today, much of the flow of leads and new business is from the vendor to its partners. Cherian said that by building those supports, the company hopes to get to the point where that flow is largely reversed.
“That goal is to find a way to grow revenue indirectly and teach these partner how to fish, and then we believe they’ll be bringing us more opportunities than we’re bringing them,” he said. “We have to do that. We know a direct sales force isn’t the way to really scale a business, and we want to really scale this business.”
To support that education — the “learning to fish” that Cherian describes — he said the company is going uniquely high-touch with its storage partners, offering extensive support and monitoring for the first 20 or so deals a partner does, keeping a close eye both on partner and customer satisfaction with the process of working for the vendor. Beyond that, he said Red Hat would look to build out the programmatic portions of partner interactions, getting feedback on how to best address important channel points like joint marketing and deal registration.
“Over the next year or so, there will be a lot of investment by my team with these partners,” he said.
While the high-growth, high-value storage products are the primary focus, the company is also trying new channel tactics on the high-volume side of its business. In its Asia-Pacific region, the company at the start of the year announced that it would be 100 per cent channel for its volume-storage business, the first time it’s put a stake down like that before. Global channel chief Mark Enzweiler said the he believed it would result in “more clarity in our go-to-market, and investment getting concentrated.”
Enzweiler said the company was waiting to see early results of the shift before deciding whether it makes sense to make the change in other geographic theatres around the world.