“The vast majority of partners out there still don’t know about Meter technology and our partner program,” said Meter Vice President of Sales Adam Ulfers. “It was built from a place of experience trying to align incentives where in the industry they have become misaligned.”
The additional margin comes on top of the average margin increase of three to four times over the margin provided by legacy networking providers, said Ulfers (pictured).
“This adds additional margin potential for partners across hardware as well as services,” he said. “We are looking to boost and complement partner businesses to ensure that from a hardware standpoint they retain and increase great margins and from a services standpoint that they can utilize Meter to do more with their teams and increase margins there as well.”
The additional margins will come in the form of customer credits, rebates and presale MDF funds, said Ulfers.
Ulfers said one of the driving forces behind the new partner fund is raising the visibility of Meter in every segment of the partner ecosystem.
“The vast majority of partners out there still don’t know about Meter technology and our partner program,” he said. “It was built from a place of experience trying to align incentives where in the industry they have become misaligned.”
Ulfers said current legacy network providers are facing increasing costs to produce networking gear and as a result are reducing margins for the partner community. Besides the margin hit, partners are also facing a slowdown in innovation from legacy providers, said Ulfers.
“At Meter we are bringing innovative technologies to the market that we control in a vertically integrated fashion,” he said. “We are passing through costs to maximize partner margins and keeping costs palatable for customers so they can enjoy the most innovative technologies on the market and do so without having to make the capital expense up front. Most importantly for this announcement, our partners have been enjoying larger margins compared to other providers in this space. This fund will increase those margins that our current partners have been seeing and new partners will be able to enjoy by 50 [percent] to 75 percent.”
Here’s a look at what partners need to know about the game- changing partner fund.
An Invitation To New Partners To Provide Disruptive Technology At Big Margins
Meter is inviting partners of all stripes to take advantage of the disruptive technology and game-changing margins it is bringing to the channel community with the $100 million partner fund, said Ulfers.
“We now have hundreds of partners that can draw on this [new fund] already, and we are inviting net-new partners to join this community to bring Meter technology to the market,” he said. “We want to invite all partners—VARs, MSPs, Tas [technology advisers], managed network service providers, carriers—to come and learn more about Meter, to understand how Meter is changing the networking space and how they can make more selling Meter technology. [They can also understand] the opportunities they have identified with their customers who are looking for a better way to build and maintain networks and get out of the old cycle of that constant refresh and planned obsolescence that many of the legacy providers have created. We can be an answer for that. We know that our success will only be because we have great partners that sign on with us and we want them to enjoy in the success we are forecasting as well.”
Ulfers said Meter is hoping that the $100 million partner fund will result in a wave of new partners working with the company and boost the success of existing partners.
“We want this to put Meter in a place where it is much better recognized as a household name and there are more customers out there coming to us to break away from the old ways of doing things.”
Meter Is Ready To Provide Relief To Customers Grappling With Rising Memory Prices And Shipment Delays
Meter has “ramped up production” of its networking gear to meet growing demand even as competitors have slowed down production in the wake of rising memory prices, said Ulfers.
“A lot of our competitors are increasing prices every single day; some of them are increasing prices after customers have signed deals,” said Ulfers. “What Meter is doing is we are ramping up our production as others are slowing down or stopping their lines. We want to offer these partners a way that they can bring a solution to their customer that is in desperate need of a network refresh where today it is becoming less and less economically viable for them because of what is happening in the industry across memory and product price points.”
Ulfers said the current memory shortage and supply chain issues have resulted in an “unpredictable” scenario with current legacy network providers.
“All I can do is share the pain that I have been hearing from partners in what has become a very unpredictable space for them with regard to how they are purchasing from their legacy partners,” he said. “What I have heard is pricing is of course going up, availability of products is going down and forecasts for their calendar or financial year are in flux.”
In contrast, Meter is “flush in inventory” and is increasing products, said Ulfers. Furthermore, the company is not increasing pricing based on its current inventory, he said.
“We’re trying to build stability where there is a current lack of it and that is baked into our business model and how we are looking to establish a utility approach to this business,” Ulfers said.
Meter Is Offering Both CapEx And OpEx Relief For Customers
Ulfers stressed that Meter is offering customers both an OpEx and CapEx capability.
“We work with a lot of retail, real estate investment trusts, private- equity-backed companies and publicly traded companies that only want to acquire networking gear on capital budgets,” he said. “What they can do is take advantage of Meter’s model where they require no capital outlay up front but only one-fifth of what they would spend otherwise per year on that capital budget.”
The bottom line, said Ulfers, is Meter is allowing partners to bring relief on budget constraints on customers even in CapEx scenarios.
“Partners are taking advantage of Meter’s business model to deliver best-in-class technology at affordable price points without that capital outlay on both OpEx and CapEx subscription contracts.”
Ulfers said about 50 percent of customers opt for OpEx and 50 percent for CapEx. “It is customer to customer as to the choice that is made,” he said. “Offering that flexibility is yet another advantage for partners.”
Meter Provides Microsoft Marketplace Cloud Spend Capability For Customers
Meter is also offering through its partnership with Microsoft the ability for customers to use Microsoft cloud spend through the Azure marketplace to pay for Meter subscriptions.
“If customers have either unused commitment spend or are looking to find a way to negotiate their Azure spend, Meter is the only full-stack network option they can purchase as a subscription off that marketplace, which is a completely separate budget for them generally speaking,” said Ulfers.
The Microsoft Azure marketplace has been a “procurement” accelerator, he said. “Because of the partnership with Microsoft, customers can save money in cloud spend and move that over to infrastructure spend—not everybody has been doing that,” he said. “We have seen a progression that is very promising with more and more enterprises understanding that is an option for them. It is really a matter of education in the market that there is again a very new way to consume network infrastructure.”
Legacy Network Refreshes Of $70B In Next 12 Months
The Meter $100 million investment comes with what the company estimates is $70 billion of legacy network refreshes over the next five years, said Ulfers.
“What we’re looking to do is pursue that along with our partners and ensure that we are giving them access and the ability to use Meter to differentiate themselves in those RFPs and customer evaluations, to sell to those customers faster, to make better margins when they sell to those customers and deliver better outcomes for palatable price points not only because of this fund but because of the economics that are baked into our model,” Ulfers said.
Ulfers said Meter sees the investment as a “catalyst” that is going to drive “enormous growth” in partner adoption. “This is going to be an accelerant on the current growth we are experiencing, which is around 300 percent and more year on year,” he said. “Partners are not only going to enjoy growth but additional recurring revenue in their business, which they have not necessarily had naturally with legacy business models. That means higher valuations for partners, [more stickiness] for their business and a lot more [predictability] for their customers in terms of the technology they are receiving and equally as important what they need to be budgeting for networking on an annual basis.”
The Meter Channel Partner Program Difference: Buying Back Networking Gear
Among the most innovative aspects of the Meter channel program is the funding to buy back existing network hardware from customers with a “predictable ladder” of customer credits based on the size of the network investment, said Ulfers.
“What we have got is a stair-step approach that is progressive based on the size of the investment the customer is going to make in acquiring and deploying the Meter network stack,” he said. “So we are going to apply increasing credits against that contract so it makes it easier for them to make that change.”
The additional networking gear buyback funding is aimed at helping customers move “more quickly from the old way of doing things to the new way of doing things,” said Ulfers.
“The fact of the matter is that networks are often upgraded across the different layers of the network in different cycles so we have to have the buyback program to help customers move to a Meter integrated stack so they can enjoy our technology and economic model,” he said. “That requires us to buy back equipment that they have got with life left on it and now with this $100 million fund provide icing on top of that in the form of additional credits to help incent them to make a move to the new technology stack.”
A 20 Percent to 30 Percent Total Cost of Ownership Savings Vs. Legacy Networks
Meter has consistently seen a 20 percent to 30 percent total cost of ownership savings for customers that have moved from legacy network to the Meter NaaS platform, said Ulfers.
“We have done something pretty audacious in entering a market that is 40 years old as a new player, offering a completely different way of delivering this technology and pricing this technology, all of which was built on a decision 10 years ago to build this stack from the ground up,” said Ulfers. “Our value proposition to customers is more reliable, more resilient, and more secure higher-performing networks with no points of failure in them with no capital outlay required with upgrades that are included, with support that is proactive and, alongside partners, we are inviting in the growth that we are seeing.”
So far, Meter has seen the most success in the mid to large enterprise. “That is where the market has self-selected us into because that is where the pain is the greatest for customers, specifically on managing large, sophisticated networks across many locations. Think retail, manufacturing, hospitality. These are customers that have real pain in network management. They have budgets that they have to assess and from a technology standpoint they find with Meter that rather than making trade-offs they can get the best of both worlds. It is really the partners that have been introducing us to those opportunities and moving us into that space.”
