Red Hat Canada general manager Luc Villeneuve has a couple of numbers that he’s very proud of — his company grew 36 per cent in Canada over the last year, and it’s growing with the channel.
At the company’s recent North America Partner Conference, Villeneuve told the approximately 70 assembled partners that the company is now doing 80 per cent of its business through the channel, more than double the amount of the business it did through or with partners four years ago. Part of that shift has been the company’s conscious effort to make that change. And part of it has been a notable shift Villeneuve has seen in the channel. For the last few years, he said, the company has focused on investing in its partners. And now, partners are returning the favour.
“I’m surprised by the willingness I’m seeing to invest in Red Hat,” Villeneuve told ChannelBuzz.ca. “The big change is that there are more partners paying the bills with Red Hat as opposed to hoping to pay some bills with Red Hat. They’re building a team around us.”
And that investment is coming in the right areas for Villeneuve’s priorities. The executive identified his biggest growth opportunities in Canada as around OpenStack, OpenShift, and Ansible — in other words, away from the “core” of the business that is Red Hat Enterprise Linux. And those emerging technologies — up 58 per cent versus last year — are where he said he’s seeing the biggest uptick in partner investments. But he’d like to see more of those investments.
“We need them to invest more because we’re growing faster than our partners can deliver,” Villeneuve said, noting that 75 per cent of professional services sold by Red Hat in Canada are “subbed out” to partners for delivery.
One area of particular pride for Villeneuve is the company’s government business — both because of the growth it’s seen and how it illustrates the company’s philosophy on investment. Villeneuve said that during his tenure, business with the government has gone from “tiny” to more than a third of the company’s business.
“It’s a long sales cycle, and it requires a lot of investment. Every time we invest, it takes 12 to 18 months. But now we’re really starting to see the benefits of that investment,” he said. “We’ve made some good bets. Some strategic bets.”
The next big investment frontier for Red Hat in Canada is in SME, Villeneuve said. It’s an area where the company is looking to invest in partners — likely hoping to spur the same reciprocity of partner investment he’s seen happen based on its enterprise investments — and where the company is looking to grow its partner base for what is a “completely partner-driven” segment of the market.
“You always need more people, and everyone we’re working with these is being successful,” Villeneuve said. “We’re at the mercy of how quickly our partners can invest. We’re going to drive leads and drive the market for them, but we need them to deliver on the opportunity.”
At the end of his keynote to Canadian partners, Villeneuve signaled one change we’re likely to see from Red Hat in Canada going forward to help that SME business grow. Villeneuve called out the distributors in the room, acknowledging that the company needs to expand its presence and activity.
“We don’t do a good job [with distribution] in Canada,” he admitted. “We’re going to go more with you, to leverage your business to create more demand in Canada. It’s a key component for us.”
Villeneuve has high expectations from headquarters, coming off a year when the Canadian business’ 36 per cent growth clip was the highest in North America for the vendor. But he said that year-to-date, they’re keeping up with that pace.
“It’s great to see that if you invest in a region like Canada, you get results. We’re growing in a goody way,” he said.