WhiteHat Security remakes channel program to remove barriers to partner profitability

Changes include a new discounting and margin system, more flexible contracts, and a much improved deal registration process that is now within the WhiteHat partner portal.

John Atkinson, vice president, Strategic Alliances at WhiteHat Security

Santa Clara CA-based WhiteHat Security has announced a major reworking of their channel program, with several significant changes that improve elements that had become seen as obstacles to partner growth.

WhiteHat, in business since 2001, is focused on the application security testing space. Their core offering is the WhiteHat Application Security Platform, which provides multiple software-as-a-service solutions.

“While the product suite has changed a lot over the years, we have been innovating in source code testing, developer testing, and mobile across all that,” said John Atkinson, vice president, Strategic Alliances at WhiteHat Security. “Just a couple weeks ago, we released a static application security testing geared towards developers.”

Their customer base encompasses the gamut from the very small to the extremely large, with the latter being in financial services, retail and health care.

“Our customers are anyone dealing with a regulated environment, or where they need to have a high degree of trust with their customers,” Atkinson said.

WhiteHat has a hybrid go-to-market model, having had partners almost from their inception.

“In the last year though, the business decided to emphasize the channel more,” Atkinson said. “Instead of being a ‘nice to have,’ it’s now seen as a strategic part of how the company is going to continue to grow.”

Atkinson was part of those changes, joining the company in January, and soon concluded that WhiteHat’s existing channel program needed major improvements.

“When I came on board, I talked to a lot of the resellers about the current program, and there were some problems with it,” he said. “They weren’t particularly specific to WhiteHat, but more of an issue throughout the industry. First, the program was designed for the ease and convenience of WhiteHat rather than the ease and convenience of our partners and customers. The result was that our partners were constrained.”

As an example, Atkinson cited the way discounts worked, where partners received margin on a sliding scale of discounts, so that discounting of prices to win deals significantly reduced margin.

“This wasn’t great for partners or for their business,” he said. “Discounts weren’t being driven by them, but by our actions. There are always cases where we have to discount to win deals, but the partner margins could shrink without them having any control or say over it.”

Atkinson said that they addressed this issue by coming up with a new way of quantifying partner value to the deal – and thus margin – by determining what they do on a specific deal.

“We have come up with ways to measure this as objectively as we possibly can, and relate it to functional discounting,” he stated. “So the margin depends on the work that partners do. The more they do, the more margin.”

Atkinson said they have identified five criteria to assess.

“Did the partner source the deal, which we can verify through deal registration,” he said. “Are they working with our sales team or the customer to help close the deal? Are they able to flow through general terms? Are they processing the order on their paper? Do they have certified pre-sales engineers?”

Atkinson said the latter requirement is now a part of the partner program.

“We created a new program for that, with proper certification this time around,” he said.

Multiple resellers are often involved in a deal, but their margin is weighted to their involvement.

“If Partner A sources a deal and sells it, but the customer wants the transaction to go through Partner C,  C doesn’t get as much margin and we rebate it back to Partner A,” Atkinson said.

A second major change is a more flexible contract system.

“We have created a contract that accommodates the sales motion,” Atkinson said. “The previous one lived in an ideal world where every sale went through same process. It’s not that simple in the channel world. There is not much more flexibility accommodated as to how deals actually closed.”

The new program also leverages WhiteHat’s new partner portal, powered by Webinfinity.

“The portal was released at the end of last year, but we have been adding more content and functionality, including deal registration which is now fully integrated with Salesforce,” Atkinson said. “Our deal registration used to be done on a separate form. It wasn’t restricted to WhiteHat partners. It had no integration with Salesforce, so it was hard to track, and there was no visibility for our partners. They couldn’t see where the opportunities were.”

Soon, the portal will also be used to feed leads to partners.

“That will be starting in January,” Atkinson said.

For now, the program has a single tier.

“We simplified it,” Atkinson said. “We may introduce some tiering going into next year, but starting fresh, we wanted to make sure everyone had the opportunity to get in in the new program.”

The program is considerably more select than its sprawling predecessor.

“When I came in, we had been working with over 400 partners, which is way too many,” Atkinson said. “That included some that had never brought us a single deal. We rationalized that considerably. We started by focusing on those who had already transacted with us. That was step one. Then we targeted partners who we felt would help us penetrate specific markets. The two mentioned in our press release,  EVOTEK, and GreenPages Technology Solutions, are in regions where we don’t have good representation.”

Atkinson noted that WhiteHat is building inroads into dev/ops-focused partners. He also said that a distribution strategy will be forthcoming in 2018.

All the changes mean a revitalized channel strategy, Atkinson emphasized.

“We are committed to the channel program,” he stressed. “It is now a huge component of our go-to-market and is getting a lot of executive attention. The channel is necessary for us to hit the numbers we want to hit.”

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