Cobalt Iron features higher renewal margins on SaaS renewals in new partner program

Rodney Foreman, Cobalt Iron’s chief revenue officer, emphasizes that the unique nature of the company’s SaaS model in enterprise data protection allows them to offer significantly higher margins than competitors.

Rodney Foreman, Cobalt Iron’s chief revenue officer

Cobalt Iron, which offers their Compass enterprise data protection solution through a SaaS model, has launched their IronClad Partner Advantage program, which they are hailing as being as differentiated in their market as their solution offering. A key is using their lower cost delivery model to be able to pay partners more in margin, with margins being higher on renewal than on the original sale.

“This program is very different from a number of aspects,” said Rodney Foreman, Cobalt Iron’s chief revenue officer, who designed the program. “We are focused on making sure that the partners reap the benefits of having sold a SaaS-based solution.”

Foreman noted the quixotic nature of traditional software compensation models, in which vendors typically pay less for renewals than on the original sale, despite the fact that renewals are the key to long term success.

“We are doing something that no one in the software industry is doing today – paying a very competitive margin upfront, and then paying more on renewals,” he said. “That’s is unheard of in the industry. When you have a SaaS model, it seems very odd to me that vendors only really pay on the front end of the contract – not the renewal. We pay a very competitive margin upfront and then add more margin for renewals.”

Foreman said that depending on the competitor, Cobalt Iron pays around 10% more at the time of closing. Then, at renewal, it is 20% or more, with additional quarterly back end rebates being paid as well.

“There’s no smoke and mirrors here,” Foreman emphasized. “It’s a very rewarding, very competitive model. “Partners will make more money with Cobat Iron than with any other competitor in this space.”

Foreman said that the nature of the company’s Compass SaaS offering is what lets Cobalt Iron pay partners more.

“Compass is truly intelligent and automated, and requires no human intervention,  so we can deliver it at a lower cost than the competition,” he stressed.

The IronClad program has three partnership tiers: Trek, Base Camp, and Summit – with the unusual names being reminiscent of the Pioneer, Scaler and Master tiers in the Nutanix channel program that Foreman designed.

“Our tiers are based on the number of customer opportunities – not on revenue,” he said. “Data always grows. All of our customers have grown and we have never lost a customer. So we want to reward for increasing the number of customer opportunities, versus pure revenue.” The program is set up, like the Nutanix program, to allow smaller partners to be able to reach the top tier.

The program is designed to support four primary type of partners: VARs; VADs; MSPs; and GSIs.

“Lots of programs focus on the reseller, but ours is balanced across all partner types,” Foreman said. “It aligns down to the business model. That includes separate contracts, but also technical and sales support alignment, as well as marketing platform, and how we support partners through the sales process. The IronClad program is designed to support all those different types of partners.”

Cobalt Iron already had a 100% channel Go-to-Market model, but Foreman said that the new partner program makes it stronger.

“I looked at all the best of breed programs, including different attributes of programs from Microsoft, Cisco and Nutanix,” he said. “I put all the best parts of those better to create our program. We are very proud of what we put together here. I think this raises the bar for a software vendor.”

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