Red Hat targets midmarket with Keating, Tech Data partnerships

Luc Villeneuve, country manager, Red Hat Canada

Luc Villeneuve, country manager, Red Hat Canada

Red Hat Canada has unveiled a new approach to reach the lower end of the enterprise and the upper midmarket in partnership with Keating Technologies and Tech Data Canada.

Under the program, Keating will work with the vendor to uncover and qualify leads in the $500 million to $1.0 billion market. Once fully developed, those leads will be handed over to existing Red Hat Canada partners to close the deal, and will be fulfilled through Tech Data.

Luc Villeneuve, general manager of Red Hat Canada, said that as much as possible, leads will be handed out to partners that are either incumbent to the customer involved, or preferred by the customer. Where there’s no incumbency or preference, leads will go to partners with the right geographical, technological, and/or vertical focus, as appropritate.

“We’ve been working for 12 months on getting this in place, working with legal, with ethics, on payment and money flow,” Villeneuve said. “We launched a month ago, and we’re already seeing partners engaging with Keating.”

While the volume closed has been small in the first month, Villeneuve points to a healthy pipeline, and an encouraging sign — partners who have been involved with the Keating arrangement are going back to the manufacturer’s rep and outsourced marketing and sales company with their own list of existing customers that they haven’t been able to follow up with as much as they’d like.

“Keating’s not there to close the lead, but they’re there to follow-up. It’s not just generating leads, it’s pre-qualified, so they’ll follow up with the customer, even sometimes meet with the customer, and then hand it over to the VAR to close,” Villeneuve said. “It’s not just telemarketing — they’re doing presentations and they have to be certified in terms of sales. They just don’t close the deal.”

The strategy is actually firmly based in Villeneuve’s experience — he was a longtime Sun Microsystems employee, and describes an “independent marketing organization” model the vendor used to cover “tier two” markets for “some 15-plus years” while it was still growing. The strategy was successful, but was later abandoned when Sun Canada was growing.

Villeneuve said that for the first six months of the program, the primary measurement of the program’s success will be pipeline generated as they “learn as they go” and tweak the program as needed. But over time, he estimates this new initiative could account for 10 to 15 per cent of the company’s revenues in Canada.

“We’ve generated a dozen leads in the last month, so we’re seeing some revenues already,” he said.

But in the long term, Villeneuve said he sees the strategy as a great way not only to attack a segment of the market the vendor has trouble reaching itself, but a way to accomplish one of the company’s biggest goals — getting sales more evenly-distributed across its product lines.

“Customers know us very well from a Linux point-of-view, so we’d like the program to evolve to focus on middleware, virtualization and cloud over the next six months,” he said. “It’s a huge opportunity that we don’t really have the time to go after in that space.”

And if the model is proved out, Villeneuve suggested taking it to other vendors could prove a way for other vendors to get involved, and for Tech Data and Keating to pick up some more business.

“This opens the door for Tech Data to bring this to any subsidiary with a limited coverage model like we have,” he said. “We focus on the big cities and the big accounts, and there are thousands of customers who don’t get touched. And there are a lot of OEMs like us. This will be very popular with them.”