HashiCorp channel chief Michelle Graff talks with ChannelBuzz about the company’s channel progress since the revamp of their channel program and strategy a year ago, and indicated what’s new for the year ahead.

On Tuesday, HashiCorp, which makes enterprise open source infrastructure automation software, held its HashiConf Digital Partner Summit. It lacked the drama of last year’s event, when then-new channel chief Michelle Graff announced the company’s commitment to strengthen its nascent reseller channel. That involved HashiCorp transitioning its channel organization from relying on volumes to relying on specializations, launching a new channel program that emphasizedvalue-add skills, and announcing their intent to transition large amounts of enterprise and commercial business from direct to partners. This year was more about continuity, with the new goal being to extend that transition to HashiCorp’s largest strategic accounts. The company also took stock of the other channel initiatives since last year’s event, and the opportunities available to partners today.

“We have made it over the hurdle and are becoming a partner-first organization,” said Graff, whose full title is VP Channels & Partners at HashiCorp.

“HashiCorp was founded as an open source technology company and spent many years building out a robust community, that has landed itself in almost every Fortune 200 company out there,” Graff said. “The two leading solutions are Terraform and Vault, with Consol also being significant.

“In 2016 HashiCorp launched its enterprise software,” Graff indicated. “Since then, we have been selling Terraform Enterprise, Vault Enterprise and Consol Enterprise. Vault was the beachhead at first, bringing in 60% of our revenues, because of the importance of security in the cloud. The last 18 months, it has equalized more, and Terraform’s compliance has become front and centre, which you can’t do in open source.”

The channel was a late arrival to the Go-to-Market model

“It’s questionable if it was there before I came [in March 2019],” Graff said. “In 2016, when they introduced the enterprise software, they didn’t need to go to market like a traditional startup. They didn’t need a channel to be evangelists – because the open source community did that. They were the channel 1.0 before building out a real channel. When I got here, there was a fulfilment channel with non value-add partners. We didn’t have a robust capability-based partner program. So I revamped the partner program and we launched it last September.”

The new ecosystem that the new program laid out focused on value-added capabilities, not transactional volume.

“Partners now can’t get to higher tiers without specializations,” Graff said, noting that the Tier Names – Enabled, Specialized and Hyperspecialized – reflect this focus on certification. “We have more than doubled our partner base from 200 to 500 partners, although we have a high degree of focus on about 50 partners with specialization in more than one product.”

Graff also indicated that her conception of how the ecosystem would work has evolved since last year, based on field experience.

“Last year at Partner Summit, I launched the partner in the cloud operating model, with CSPs at the top and SIs and GSIs around it. Fast forward 18 months. It is still a partner in the cloud operating model but for customer transformation, SIs are now in the centre. They are stitching together the hardware and software, using HashiCorp.”

Graff said that the commitments made last year to transfer enterprise and commercial business to the channel had generated results in creating more active and motivated partners who would hunt for new business effectively.

“Before Partner Summit last year, 20% of business went through partners and zero per cent was partner sourced,” she stated. “We made a commitment to move a great portion of the direct business to enterprise partners if they invested in us, and we have seen great results. We have gone in the last year from under 5% being partner sourced to 22% of our business being partner sourced.”

This year, Graff said that the goal is to get nearly 100% of the enterprise and commercial business shifted to partners, and to get more than half of their Strategic Business, which is Fortune 500, shifted to partners.

“Last year the focus was on moving enterprise and commercial, and this year it’s on the largest accounts,” Graff indicated.

HashiCorp has also made other channel enablement moves during the last year.

“A year ago, it was hard for partners to deliver because we didn’t have the training programs,” Graff said. “As part of our ‘land and expand’ model,  implementation beyond integration is critical to customer success. So we doubled down on training this year.” In  April, they introduced Cloud Engineering Certifications for Terraform, Vault, and Consul, and 150 partner engineers have now earned their implementation certifications.

“We also now incent and compensate our sellers when a partner closes, whether the deal is on our paper or on the partner’s paper,” Graff stated.

At the Partner Day, Graff emphasized the metrics behind selling more HashiCorp.

“While HashiCorp is an incredible market opportunity with a $64 billion TAM, partners’ ability to receive both licensing revenue and services attach with 3-4x drag is a fantastic opportunity. Combined with CSP consumption, it increases their cloud consumption revenue by 2-3x.

“We also just launched Terraform Cloud for Business in August,” Graff added. “Before, Terraform was only being leveraged in-house by companies with staff to do so. Now partners have new leverage to go into accounts with Terraform Cloud for business, with a much lower barrier to entry. Partners have the licenses and services opportunity, but the actual infrastructure is managed by HashiCorp. Partners now have a massive opportunity to go back in to their install base with this.”

HashiCorp also announced at Partner Summit that the  HashiCorp Technology Partner Program has grown to include more than 100 technology partners with more than 250 integrations in its ecosystem. They have deepened product integrations with partners like Datadog, F5, GitHub, Palo Alto Networks, and worked on new integrations with partners including Cisco, MongoDB, ServiceNow, and Splunk.

“Our goal has always been to have a very robust Technology Partner Program, to make us the infrastructure company in the cloud, and provide better solutions for enterprises in the cloud model,” Graff said. “Many of these ISV partners are also working on Go-to-Market with us. We have a team that works on joint selling motions with them, and we also work with vendor partners like Splunk and F5 in the field.”