iXsystems’ open source storage model both facilitates the economics of the new program, and brings in leads that their internal people nurture until they are ready to close, then pass them on to partners who have brought in a deal of equivalent value.
Today, San Jose-based open storage solutions provider iXsystems has announced that their RevMatch Channel Partner Program has gone live. The program is a formalization of policies that the company has been implementing informally for some time. The core of the program, and its distinctive element, is iXsystems providing dollar for dollar revenue matching for partners who close new business. That revenue comes in the form of a fulfillment lead of equivalent value, that iXsystems believes is ready to close, being passed to the partner within two quarters of the closure of the deal. If for some reason the partner does not close the fulfillment deal, iXsystems will provide a significant back end rebate on the deal that the partner closed.
While iXsystems has been around for thirty years, this is their first formal channel program.
“We have been channel-first for years, so have always believed in the channel, but we didn’t have an official way of stating the unique position we bring around reciprocal business,” said Matt Finney, iXsystems’ Vice President of Sales. “Because we are open source-based, it allows us to do some really unique things compared to other storage vendors out there.”
The dollar for dollar revenue matching policy actually precedes the formalization of the program.
“This is something that was always part of our conversation with partners,” Finney said. “Because we get so many inbound leads because of our open source element, we were always looking for partners to facilitate business, so we provided leads to partners who closed registered deals with us. Partners wanted to see this in writing. So it has been our philosophy, but hasn’t been formalized until now. We promise the partner fulfilment revenue based on deals they bring to us, and as an alternative provide them with a back-end rebate if for any reason we can’t deliver on that fulfilment opportunity provided.”
Here’s how it works.
“If a deal is registered and approved, and the partner wins the deal, we commit that within two quarters after closing the deal, we will pass them a fulfilment revenue opportunity,” Finney indicated. “These are not just warm leads. They are customers our sales team has been working with who are on the finish line, and who we believe are ready to buy. So the partner gets a lead that is ready to close, and also an introduction to a likely new customer, which is of great value in itself.”
Finney explained that if the partner brought in a $100,000 opportunity, iXsystems will provide them with a $100,000 fulfilment revenue opportunity from a different customer.
“It’s a one for one revenue mesh,” he said. “But if the fulfilment opportunity doesn’t close for some reason, we will offer a back end rebate on the amount of registered business they provided us to augment their margin.”
There are some secondary components to the program as well.
“We have a spiff component to incent resellers to get deal registrations, to get introductions into verticals that we aren’t already in,” Finney noted.
Given that the dollar matching process is the heart of the partner program, it’s no surprise that it’s a single tier program.
“We have tried to make it simple and easy to understand,” Finney said. “We have been around for many years, and we have been in other vendors’ partner programs, and this is based on our experience of what we wanted to see as a partner. We feel it protects all partners because of deal registration and pricing, and that it incents all partners. I’m not a fan of pipeline reviews, training commitments or commitments to revenue objectives. They never appealed to me because a lot of it seemed to be creating work rather than focusing on what’s important, which is customer relationships. So we have a flat reciprocal sales model.
“I don’t think there’s another program out there where the vendor is committing to getting you revenue for every dollar you bring in to us,” Finney added. “Our open source commitment gives us the ability to run this type of program.”
Finney indicated that the formalization of the program isn’t designed to recruit large numbers of new partners above the 200 or so already working with iXsystems.
“The goal isn’t to significantly increase the number of partners, but to clearly define what we provide to our reseller partners, and appeal to partners who believe in that business model, who want to see a return, and who find value in new customer revenue introductions for the fulfilment opportunities we provide,” he said. “I want partners where we can both grow together under this reciprocal business model.”
The new program is live now, and partners are being signed on today.