Canonical continues evolution of channel management by establishing GSI program

Canonical continues its strategy within the last year of investing more to better manage relations with their high-value partners, by establishing a separate program for GSIs.

Regis Paquette, VP of Global OEMs and Channels at Canonical

Canonical, publisher of the Ubuntu Linux distribution, has announced a channel program specifically for Global System Integrator [GSI] partners. The new program reflects market changes which have made Canonical and Ubuntu more attractive to many GSIs, as well as the maturation of Canonical’s channel strategy.

Canonical’s ecosystem management efforts were originally focused on the OEM market

“I have been at Canonical for three years, and the focus at the start of this period was on big OEMs like Dell, HPE, IBM and SuperMicro,” said Regis Paquette, VP of Global OEMs and Channels at Canonical. “We spent a good two years putting a program for that type of partner in place to certify Ubuntu stacks on their solutions. That was our focus until about a year ago.”

Canonical did have VAR partners during this time – quite a few of them – which were not managed very effectively.

“The situation with more traditional VAR partners was not great,” said Paquette. “They were primarily engaged in fulfilment. A lot of deals would come in through our website and those customers’ preferred VARs would do one-off opportunities. That consumed a lot of energy of our very small team, and wasn’t very efficient, since we had around 300 of these VARs. So we reset on that. We decided to focus on our top 40 VARs, ones with a strong Linux and open source focus. All the rest we put behind distributors.”

Canonical noticed that some of these select ‘VARs’ were in fact GSIs.

“They were much bigger than VARs, and included some very big logos,” Paquette said. “We really wanted to do strategic things with them.”

As a result, Canonical decided to expand the GSI component, which ultimately led to the creation of a separate program for them.

“We looked at the GSI market, which is $350 billion, with the 12 big ones being 2/3 of that,” Paquette said. “We built a small team to go strategically after these GSIs. We had a team that mapped our value onto named GSIs, and we also took a bottom-up approach with a marketing program.”

Paquette said that Canonical is able to offer GSIs a strong value proposition.

“We want them to build managed services with our technology,” he said. “Compared to our competitors we have an interesting market position. Our differentiator for them is that Ubuntu does most of what is happening on public cloud. 70% of Linux there is on Ubuntu. Container as-a-service offerings on the public cloud are all built on Ubuntu.”

Paquette noted that recent market developments have strengthened their position.

“When IBM bought Red Hat, that made Red Hat less attractive to GSIs because IBM has a big GSI itself,” he said. “That means that when they work with Red Hat, they are also working with a competitor. Another key competitor, SUSE, was stopping OpenStack operations. These things made us an obvious target.”

Another attraction, Paquette said, is Ubuntu’s ability to make GSIs more money.

“We allow GSIs to build services with Ubuntu that have much better margins than any other technology,” he said. Canonical’s tools include DevOps automation of apps and infrastructure, cloud style provisioning of physical servers and apps that can be built, published and updated remotely without the need for manual intervention. Those all improve Ubuntu’s value proposition.

“Our distribution is also true open source,” Paquette added. “We don’t have a community version that’s free and unsupported, and an enterprise version. So our server pricing with our one SKU is better compared to other companies.”

The program itself emphasizes joint working with the GSI partners. Canonical will  assign dedicated resources to GSIs including account management, sales, engineering and marketing support. They will also  engage with GSIs to train their sales and consulting teams on the value of Canonical’s full suite, identify integration opportunities with the GSIs own offering and work together on specific customer requests such as strategic proof of concepts. Enablement benefits include deal registration and volume discounts.