Citrix channel chief Kimberly Martin was brought into the company last fall to restructure and improve the company’s channel operations. She discusses her mission, the changes that she announced at her first Citrix Summit, and what remains on the drawing board.

LAS VEGAS – Kimberly Martin, who replaced Tom Flink last fall as Citrix’s global channel chief, made her first Citrix Summit address to partners Monday. She gave a strong reaffirmation of Citrix’s commitment to the channel, a channel angle on Citrix’s sales strategy this year, and a preview of the new channel initiatives Citrix will be rolling out – which revolve around a dual commitment to services and to the mid-market.

“Citrix is a partner-led business, and we believe that is key to our success in the future,” Martin said “90 per cent of all product sales were made through partners. We also saw 30 per cent growth in our CSP [hosted] business.”

Martin also indicated that Citrix is making a new commitment to increasing partner services business.

“At one time, the trick to partner profitability was all about selling products,” she said. “Services were 20 per cent of revenues in 1995, and 35 per cent in 2015. However, they are projected to rise to 60 per cent in 2020.”

To help partners capitalize on that change, Citrix will be reducing its own services activity in the mid-market to open it up to partners.

“In 2016, Citrix will decrease the amount of Citrix-led services in the mid-market to increase the amount of services partners can offer to customers,” Martin said. “If you build services around our solutions, it results in more product revenue, and we are both successful.”

Martin contrasted this with what she said was a lack of commitment from rival VMware to partners in this area.

“We know you want an ongoing predictable services relationship,” she told partners. “VMware’s cloud strategy is direct. Ours is putting partners in the middle so you can create ongoing predictable services revenue.”

The services emphasis runs parallel to an emphasis on the mid-market, which Citrix defines as between 300 and 20,000 seats, and which has been growing at a 30 per cent CAGR since 2010.”

“This market is underserved today,” Martin told her audience. “It requires the partners in this room. We have identified new mid-market use cases and we are going big in 2016 to win in the mid-market.”

A key aspect of the mid-market strategy will be partner mid-market success kits around both vertical and horizontal use cases. Seven of these kits are available now, covering verticals like healthcare and finance, and horizontal areas like Windows 10 migration, secure remote access, secure ADC, and lower TCO. The kits cover sales presentations, at-a-glance one pagers, use-case sales scripts, campaigns-in-a-box – and coming soon, customer prospect lists. The marketing campaigns are also social media-based, which is especially important in North America.

“Each of these are designed with your service opportunities in mind,” Martin told partners. “The partner sales kits are available today. We start with seven, and there will be more to come. Soon you will see services success kits for the mid-market.”

Martin also told partners that the increased services compensation wouldn’t be paid for by reducing compensation on product.

“Services is only part of the equation,” she said. “We are not reducing product incentives, but are actually increasing our incentives in the midmarket, with Net-New partner-sourced incents. You will be hearing more about this in the next few months, but there is an increased opportunity for incentives starting now. If you invest, you will get paid.”

Martin said that the Net-New incents will be for new opportunities the partner brings into Citrix.

“It is in the final design phases now, and we want to then vet it through partner advisory boards,” she said. “We aren’t giving specific launch dates but we expect to finalize it in either Q1 or Q2.

CARs [Citrix Advisor Rewards], which have been a bedrock of the company’s channel program for many years, are also being enhanced.

“CAR is available on all customer segments now,” Martin said. “CAR improvements include easier CAR processes, shorter SLAs, and being more predictable. We want to be the easiest partner to do business with.”

Citrix support for managed partners have been completely revamped, with CDMs replaced by PAMs [Partner Account Managers], whose training and role have been rethought. Partners making more than 80 per cent of revenues will be covered by a PAM. The rest will have self-service and tele-PAMs, to have access to the same training tools.

“Previously CDM was implemented in different fashions throughout the world,” Martin said. “We are standardizing that since many partners span multiple GEOs. We also had a group of CDMs who were focused on core desktop virtualizations. As we build out that team, we want more networking expertise, and for some of that, we will hire.”

The PAMs will undergo a rigorous retraining.

“We start with boot camps, and are going to train everybody,” Martin said. “One third will nail it, one third will be ok, and one third, it won’t be a good fit for them, and we will find a new role for those people which will be a better fit. We are adamant that PAMs learn about partner businesses, and not just about our product sales. That’s a large piece of the training.

“Partner magic happens at the field level, and because of this, the PAMs are being trained in social media and midmarket accounts so they can help enable you,” Martin told the partners.

Changes to distribution are also coming.

“The cloud has disrupted distribution margins, and distributors are moving to where you pay them less for operational parts and more for developing partners,” Martin stated. “So expect to see changes in disti incentives, increasing support. We are also hiring a worldwide distribution lead because it’s important to have a worldwide distribution strategy to handle things the same in each geo today. The distributor channel in EMEA in particular needs to focus less on operational content and more on the training and development of Silver partners.” More incentives are also coming to North American distributors as well, particularly around the management of the Silver partners, as Martin acknowledged performance hasn’t been strong among Silver partners as among the Gold.

Changes to the distribution structure itself in North America, where Citrix has worked exclusively with Ingram Micro since 2008, may also be coming. The company previously worked with Tech Data and Avnet as well before making the earlier decision to consolidate.

“In the U.S., we have only one distributor,” Martin said. “What other companies our size only have one distributor? We will be reconciling that, and maybe adding one. We have not made that decision. It’s a work in progress and nothing is likely for Q1.”

Making that kind of change in the U.S. would mean similar changes in Canada as well.

“I want to see distribution come to market for us which has really good networking domain expertise,” Martin added.

Martin acknowledged she had been recruited to Citrix to solve ongoing channel management problems at Citrix, which had been one of the issues raised by dissident hedge fund investor Elliott Management in their open letter to the company last June.

“The Elliott letter called out three things: fix SG&A, narrow the product portfolio, and work on the channel,” Martin said, “I have a background in channel transformation and I was brought in to do that. In the first 30 days I presented a plan and since then have been hard at work working to launch a better engagement model that’s incremental to our business. For instance, our policy on high touch accounts wasn’t a bad idea, but it wasn’t globally consistent and it caused a lot of strife with partners. Fixing these kinds of issues is my mission.”

Martin indicated she benchmarked all the incentives from Citrix competitors in considering changes to partner incents.

“For instance, partners don’t like the PROCESS of CARs, but they like us rewarding them in that way,” she said. “I think CARs is one of the more innovative Citrix incents and it’s not going away as we add Net New Source incents. We just want to be able to compensate partners at several stages across the sales cycle.”

Other changes will be coming down the road as part of Martin’s review of the channel sales process.

“We may need some new partners to address demands in parts of the sales cycle,” she said. “Demand generation partners like CDW are invaluable but we may not have enough of them. We need the right partners that generate demand on their own, and we will pay them for those leads.”

Carlos Sartorius, Citrix’s SVP of Worldwide Sales and Services, said these changes are part of an ongoing process of transformation of the sales organization.

“One of the things we need to get much better at is the whole lead generation process,” he said. “The opportunity is there for us in other markets, but we haven’t been able to do it. How we bring in our partners to do that is critical.”

Tim Minahan, Citrix SVP and CMO, also pointed out the importance of these changes to the company.

“We are going through an analysis now on our end-to-end demand management plan so we don’t let things slip through the cracks,” he said. Citrix has made a good investment in systems infrastructure that should help us there, but it hasn’t been applied in that way before.”