Five9 continues channel expansion in move away from direct model

Cloud-focused contact centre software vendor Five9 sold mainly direct until last year, when it added a master agent channel component. Now it is expanding its channel with integrators and resellers.


Mike Burkland, Five9’s CEO

San Ramon CA-based Five9, which makes enterprise cloud contact center software, has formally announced the October appointment of Wendell Black as their vice president of channel sales. The company has also announced a significant expansion of its channel program.

Five9, which is the leading pure cloud company in the contact centre software infrastructure space, builds its business on disrupting legacy contact center solutions, much like Salesforce or Netsuite does in their particular areas.

“It’s a  massive market, and we have had consistent 30-35 per cent growth in our enterprise business,” said Mike Burkland, Five9’s CEO, who has run the company for the last eight years. “We have 750 employees, an annual revenue of 130 million, and went public last year.”

Burkland said that until recently, most of Five9’s business was direct, with channel participation limited to reference partners, who often came from the CRM space because of the tight linkages between the two areas.

“Our historical growth was driven by our direct sales force,” he said. “Although about 40 per cent of the  deal flow was driven by reference partners, all the business was written on our paper.”

Five9 decided last year to make the channel more significant in their go-to-market model

“While many companies thrash about in their GTM strategies, everything here has been done in a well thought-through strategic fashion,” Burkland said. “Today, we are at an inflection point for contact centres moving into the cloud, as companies replace their older legacy CRMs like Siebel. It’s a tough transition for the legacy providers to bite the bullet and change their business model, since they are cannibalizing their own business away. Now is the right time to expand our reach.”

Burkland said Five9 was influenced in this decision both by enterprise customers and by channel members.

“In addition to the enterprise demand, we have seen pull from partners who have been selling those systems,” he said. “They know they have to have an alternative in the cloud.”

About six months ago, Five9 introduced a channel component for master agents, along the telco model

“That was an appropriate first channel for us, and now we are expanding this program to expand our reach into more opportunities,” Burkland said.

Wendell_Black VP Channel Five9 300

Wendell Black, Five9’s Vice President, Channel Sales

“We  have seen some good deals come from those master agent relationships,” said Wendell Black, Five9’s Vice President, Channel Sales, whose 25 years in the industry includes sales VP jobs at Nortel and Oracle. “What we see here though is there is a logical next step for the partner that wants to be more end-to-end in their deliverables, who want to sell the deal and own the relationship,  do provisioning, professional services, first and second level support, and billing. They want the same model they had with the legacy vendors, with the same kind of scope and service as an option.”

Black said that they are also carving out a space in the program for technical consulting and systems integrator partners.

“We are providing access for these companies to be certified, and also looking for partners with tangential technologies who want to expand the scope of their offerings,” he added. For example, Five9 has partnered with solution providers who focus on workforce management suites.

Black said that since his October arrival, Five9 has segmented the different target audiences — master agents, system integrators and resellers —  and is developing programs for them. They are also changing their own financial models, which had been developed for the direct business, and have adjusted their back ends for the new partner structure.

“We are also out in the market recruiting aggressively,” Black said. “We want to go after the same community that has been providing the legacy platforms. These partners are looking for a major cloud- based upgrade to their legacy client, which will allow them to sustain legacy PBX systems while adding a cloud-based value proposition, and our systems work well with these legacy systems.”

While Five9 has just over 20 partners signed up at this point, the profusion of potential partners means that this is likely to expand significantly.

“Over time, there could be hundreds of partners, because of all their different vertical market specialties,” Black said. “The ideas is to meet the customer where they want to be served.”

Five9 does have a Canadian presence, but Burkland acknowledged it hasn’t been fully developed.

“We haven’t invested significantly in Canada, but the new program will let us do that,” he said.

“I have had a great deal of success in my past roles in Canada, and the partner path is the most expedient way to do that there,” Black said. “We will aggressively pursue new partner relationships, including old Nortel partners.”