Veeam also has some new competencies around Microsoft 365, Offsite Backup and MSP Backup in pilot now, with some more on the way.
Following a year in which the emphasis was on maintaining stability in their Go-to-Market, Veeam has a more aggressive strategy underway for 2021. They are engaged in encouraging partners to sell more subscriptions, which includes a new incent which makes subscription renewals more attractive by treating them as new licenses for comp purposes. They have also added more points to their deal registration program.
“Within the channel itself, our big moves have been acceleration of subscription- based licensing, and the enhancement of our deal registration program,” said Paul Strelzick, Veeam’s SVP, Americas. “We have a big recurring revenue push, so we margin around various components there. We enhanced the deal reg program by taking deal reg margin off the top and then giving rebates based on growth to Veeam.”
“We think the transition to subscription over the last two years has been incredible,” said Kevin Rooney, Veeam’s VP, Americas Channel Sales. “It’s over 50% now. With more than half of our business going down the path of subscription, it’s clear that’s how our customers want to consume it. We expect it to grow and grow until its almost 100% of the business.”
The issue for partners, Rooney said, is that what used to be a million dollar sale is now a 100,000 subscription – a much smaller sized deal.
“Partners have been fixing their comp plans to adjust for this, because it’s the right thing for the customer, but while after year one, it’s much more profitable for the partner and for the sales rep, the first year is painful. So we have added accelerators for subscription sales so people aren’t conflicted. We don’t want that conflict to exist.”
The change took effect March 1.
“We’ve enhanced our program so when the partner sells a renewal subscription, it’s treated as a new license from a discounting structure,” Rooney indicated. “Renewing a perpetual SKU is single digit margin. We have increased the subscription renewal by 2.5-3x, to treat it like a new license sale by way of discount.”
“Our massive change in Go-to-Market structure is as important to the cloud,” said Matt Kalmenson, VP of Sales , Commercial Sales and Cloud Service Providers at Veeam. “The tech transition is easier. It’s the business models that are harder – managing the comp models and making sure everyone is happy. No one flips a switch and moves to an ARR or MRR model and everyone is instantly happy. We have internal plans for own sellers to entice them to lead with subscription.
“I’ve seen this go from conflicting Go-to-Market strategies depending where you were in the ecosystem, to working out friction with everyone pointed in the right direction, by realizing there were ways to work around it,” he added.
In addition to this tripling of margin on deal registration, Rooney said that deal registration has been enhanced.
“We have added more point to our deal registration to further distance ourselves from the market,” he stated. “Our deal reg numbers are big – 12-14 points, not 2-3.”
The AWS Marketplace is now eligible for deal registration for AWS opportunities, to protect them.
Rebates have also been put in place on alliance resell relationships with Lenovo, Cisco and HPE.
“Before this year, if a partner sold Veeam on an HPE SKU, we counted it towards revenue targets, but didn’t give rebates on revenues,” Rooney indicated. Platinum partners [4 points], and Gold partners [2 points] now get these back end rebates.”
Veeam’s competency programs are in the process of being expanded.
“This program has been consistent over the last few years, but we are now adding additional layers to separate the best of the best,” Kalmenson said. “Microsoft 365, Offsite Backup and MSP Backup competencies are in a pilot phase now, with more to come later.” These will include Veeam’s Disaster Recovery as-a-service.
“On the Veeam Cloud Service Provider side, we will also continue to see enhanced competencies, with our marketing and enablement tools to be focused on use cases, and playbooks to help service providers be revenue ready at a faster pace,” Kalmenson added. “We will continue to add directories which allow customers to find service providers.”
Strelzick said that conditions are favorable to see Veeam’s growth in sales continue this year.
“Microsoft 365 has provided incredible growth for us,” he noted. “Microsoft is great at getting products out, and the last 12-15 months, they have been pushing it hard. With us adding things like Teams support, it will continue to accelerate.”
Strelzick also pointed out the impact of the quick pace between V10 of their flagship Backup and Replication product, which was delayed in its release, and V11’s release earlier this year.
“With all the new releases between V10 last year and V11 this year, it gives the partners many more at bats,” he said. “Now with Kasten for Kubernetes, more customers are talking about that, and we will continue to develop that, and do some integration back to Veeam Backup and Replication, so you get the best of Kubernetes and the best of Backup. We have had some great Kasten transactions already. The Backup for the three major cloud platforms are also a tremendous win for us.
“Another thing we are seeing is a real uptake in our enterprise transactions,” Strelzick added. “There has been a big growth in the enterprise as we move upstream without sacrificing the low end, in part because of all the wins with the VCSPs.”
Finally Strelzick pointed out that in contrast to the earlier period, the turnover both in his own position and the channel leadership has stopped.
“This stability of people has been a huge win for Veeam and the channel,” he said. “The core leadership has been consistent the last three years. That makes it easier to help partners get more margin.”