Splunk sees cloud and COVID strengthening its channel play

Splunk’s channel growth has been a logical complement to the company’s cloud-first focus, and has also helped them deal with the pandemic-related challenges and respond to its opportunities.

Aziz Benmalek, Splunk’s vice president of worldwide partners

Splunk’s channel business has been growing significantly in recent years, and the company continues to show strong momentum there. Going forward, the company is particularly optimistic about its channel business. They believe their multi-faceted channel strategy positions them well in today’s environment, with their shift to a cloud-first strategy, backed by strategic partnerships designed to complement that. They also believe that this focus has positioned them well for the workplace changes created by COVID-19.

The pandemic quickly impacted Splunk’s channel initiatives this year, compelling the restructuring of their global partner summit. This year it was virtualized, but Aziz Benmalek, Splunk’s vice president of worldwide partners, said that the event was still a major success.

“We held the partner event as a virtual event in April and May, which involved a webcast series with senior execs, and we had over 1600 attendees from over 87 countries,” Benmalek said. “That was a great turnout, which is much higher than in person events.”

Benmalek said that will build on the strong partner momentum from FY 2020.

“Our partner-sourced booking business grew 32% YOY in FY2020,” he indicated.  – more than 50% of new logos added in FY2020 were through our partner ecosystem. There is a partner profitability study we do every year, and what we saw this year was an 18% YOY growth in profitability from services. Our most profitable partners do $7.43 in services from every dollar of Splunk that they sell, and that’s exciting to see. Partners who are expanding our use case scenarios are seeing more dollars here.”

Benmalek said that cloud is a key to this, and that partners who are moving in tandem with Splunk towards cloud and hybrid solutions are seeing particularly strong benefits.

“We are moving cloud first, which is reflected in our investments, product and Go-To-Market,” he said. “We now have over 2000 active partners, and are seeing  more of them aligned with our cloud-first strategy and the motion that we are driving in the marketplace. Every company today is starting or in middle of their digital transformation, and data and cloud are in the core of that. Over 75% of cloud services force companies to have a cloud-first strategy.”

Benmalek said that the growth of cloud is also building up Splunk’s MSP channel.

“Our MSP business saw 94% growth YOY and continues to be key as we move into cloud in a big way,” he noted.

Benmalek said that Splunk’s $80 plus billion market today is just scratching the surface, and that they have a multifaceted strategy together with their partners to capture more of this market.

“We are expanding our use cases with existing customers, and expanding how we enable new customers and new logos,” Benmalek said. “Our strategy around this is centred around four pillars.”

The first is continued intensification of Splunk’s cloud and hybrid focus.

“We have deeply partnered with AWS, and announced our partnership with GCP,” Benmalek said. “We also continue to work with Azure around BYOL on the Azure cloud. We have launched successful cloud migration portfolio and continue to expand our cloud integrations. Cloud remains a great opportunity to expand to other customers.”

Broader strategic partnerships beyond the cloud hyperscalers are the second element of the strategy.

“In addition to our products and our recent acquisitions like SignalFx, we have been expanding our strategic partnerships to allow us to expand our data footprint,” Benmalek said. They have recently expanded their endpoint-focused partnership with Cisco, adding Cisco Endpoint Security Analytics Built on Splunk, integrating Cisco’s AnyConnect Network Visibility Module with Splunk Enterprise to provide an added layer of visibility into endpoint data. Splunk also recently expanded their strategic integration with the Intel Cyber Intelligence Platform, which has a major GSI channel component with Deloitte, EY, Accenture and  CapGemini.

The third pillar is continued growth of partner certified consultants.

“Growing the solutions and build-in capabilities of SI and MSP partners is a huge focus area for us,” Benmalek said. “We now have over 700 partner certified consultants, which continues to build out our capabilities.”

International expansion into newer markets is the final pillar.

“As we continue to expand internationally, we are driving this in a targeted way with a partner-led model, which involves a joint Go-to-Market with our most focused partners,” Benmalek indicated.

Benmalek said that Splunk’s strategy positions them well to handle the COVID environment as well as cloud.

“The feedback from partners has been very positive, both on cloud and COVID,” he stressed. “The exciting piece here is where Splunk is from a data point of view. We are in a great spot. It’s more critical than ever in the world we live in. The remote work initiatives we launched have really taken off. We have launched trial scenarios with Cisco around endpoint security for CESA, and more integrations with Teams and Zoom around remote work. We recently launched a back to work initiative, involving tracing and geofencing and ability to leverage all data.”

The vertically specific nature of remote workforce solutions means that Splunk is heavily dependent on partners.

“This is really a partner-led initiative for us, because it involves so many different industries,” Benmalek said.