Net-new customers are ‘going to be the lifeblood of our future,’ says Kevin Kennedy, vice president of global ecosystem at Red Hat.
Kevin Kennedy, recently named Red Hat’s channel chief after an interim stint, said the IBM open-source enterprise software division is working to better reward the solution providers that are landing net-new customers, cross-selling and upselling, and earning Red Hat capability skills and badging.
Net-new customers are “going to be the lifeblood of our future,” Kennedy told CRN in an interview. And for more investment in Red Hat skilling by the Raleigh, N.C.-based vendor’s partners, “the greater profitability you’re going to have as a result of the program.”
Kennedy, whose official title is vice president of the global ecosystem, became permanent channel chief in January. He took over the role in October on an interim basis after his predecessor, Stefanie Chiras, became senior vice president of The Open Accelerator, an IBM and Red Hat innovation hub in Boston.
[RELATED: Red Hat Channel Chief Chiras Changes Roles, Kennedy Becomes Interim Leader]
Red Hat Partner Program
As part of the partner program updates, Red Hat is moving away from just reimbursement to a predictable model that emphasizes partner investment in Red Hat technologies and services. Partners will receive rewards for workshops, assessments and other presales activities, plus other actions taken throughout the customer life cycle, according to the vendor.
These incentives are separate from MDF and aim to reduce up-front investments by partners. Red Hat is expanding rebates and deal registration to cover OEM, cloud and other indirect routes to market. The vendor also is broadening partner eligibility for incentives and working to increase partner profitability.
In addition, Red Hat is expanding bookings activities to include application services, AI and other product segments. Coming later this year is a cloud program module for Red Hat Certified Cloud and Service Providers that focuses on annual recurring revenue for points instead of traditional bookings as consumption business models grow in popularity, according to the vendor.
The Red Hat Specialized Partner program now uses an open application instead of a nomination process to simplify applications, and these partners get more points for each specialization completed. Those points can unlock more partner benefits, according to Red Hat.
Red Hat is moving its “sell with” module to open enrollment for any qualified partner for more simplicity and consistency, according to the vendor. Red Hat has also enhanced its partner portal for automated crediting for marketing and demand generation activities managed through Red Hat Partner Demand Center and approved for MDF funding. The move aims to give partners improved data accuracy plus more autonomy by no longer needing to manually submit this data.
The vendor has also worked to provide partners with a better on-boarding process for Red Hat Partner Program modules’ digital enrollment workflows. Partners have increased permissions for more control and visibility into opportunities, progress and point accumulation, according to Red Hat.
The company also is working to differentiate partner rebates based on tiering, Kennedy said. The vendor is enriching the deal registration process for commercial partners focused on net-new customers to incentivize customer hunting. The deal registration process for enterprise solution providers is staying the same.
“We’re not really looking to reward, ‘Hey, you did $100,000 with us last year—we’re going to go renew that at $100,000 again,’” Kennedy said. “There’s nothing really spectacular about that for anybody. I would say the same thing about our direct sellers. My expectation for the partner [is] they continue to work with that customer.”
The vendor has additional incentives for solution providers that are selling across the Red Hat portfolio, with cross-selling and upselling opportunities available through products such as the Ansible open-source IT automation engine, which has been growing year on year in the midteens, IBM revealed during its latest quarterly earnings call this month.
Migration from VMware and other legacy virtualization products continues to present solution providers with a revenue-generating opportunity, Kennedy said.
As for incentivizing more skill acquisition by Red Hat solution providers, designated Red Hat Specialized Partners are going to have more incentives they can earn based on technical decision points used to determine specialized partners, Kennedy said.
These specialized partners have statements of work validated by Red Hat and customer attestation that the solution provider was successful in the engagement. Red Hat sellers will also look to specialized partners for co-selling.
“If you’re a specialized partner, you’re closing business, you’re going to get an incremental incentive,” he said. “If you’re doing that in commercial, even more so.”
Automation and hybrid cloud are other parts of the product portfolio where solution providers can grow their business looking ahead, Kennedy said, especially for solution providers waiting for meaningful revenue to come from AI projects. Customers looking to take existing technology spend, infrastructure and applications and modernize them for AI use cases or otherwise are a prime opportunity for Red Hat technology.
“You don’t have to change anything around your applications. You don’t have to change anything around the Red Hat technology. You can port those things seamlessly back and forth, which is huge,” he said. “All of that has really set us up for a great opportunity in the future.”
