Today, we announced a new kind of partner program, one that’s been designed from the ground up to meet the needs of today’s channel. It is also the first partner program that enables MSPs and resellers to position Secure Access Service Edge (SASE, pronounced “sassy”) as a converged, future-proof, global, network and security cloud service.
While creating the program, I found myself wondering why IT resellers and vendors have even called each other partners. Partners are supposed to share core values, work towards the same goals, and split profits and losses. But for years, the IT industry has broadly abused and misused the term partner. In relationships between IT vendors and their channel “partners”, both sides of the deal often had different goals, different core values, and in some cases, even inherit conflicts. It comes as no surprise then, that loyalty and commitment are no longer required to form these “partnerships.”
At Cato, we wanted to fix the “IT partnership problem”. For starters, we wanted to get the vendor out of the business of the channel. Traditionally, vendors have involved themselves in each channel deal and in this way controlled “the partnership.” How? By using a high-price-high-discount business model. The list price was so high that partners can’t progress independently and must ask the vendor for excessive discounts in order to be competitive. It puts partners in a very awkward position, forcing them to disclose details about a project that might as well involve solutions from competing vendors.
Dependency is only one aspect. Forcing themselves into every deal means vendors have a significant impact on the partners’ profitability, often granting customers high discounts by reducing the partner’s margin. As a result, resellers try to keep their “partners” away from the customers because they suspect that their own best interests might be compromised. I’m sure all vendors ask themselves; how can we build a more profitable, highly differentiated, and future-proof channel ecosystem? However, achieving these goals requires sacrifice that we rarely see and requires a real channel-first mentality across the organization. Hence most partner programs look the same and no one bothers to take a second look at them. Not even their own creators.
Cato’s New Partner Program – Independency, Protection, and Accelerated ROI
At Cato, we faced the challenge of creating a framework to enable channel-led growth, knowing all the above. Long before the announcement of our newly released partner program, we decided to do things differently.
First, we wanted to solve the partner dependency challenge. Our list price was designed to be competitive and win deals. We sell SASE, not discounts. It allows our partners to go deep, wide, and fast, independently. It also helps our partners with forecasting. They know exactly what gross margin to expect any deal, no matter how big or how small. On top of that, we commit to a positive ROI from the first deal. We gained this by basically eliminating all costs associated with onboarding a new vendor – building the demo lab, getting staff trained and certified, and investing in lead generation activities. These are all provided to authorized partners for free. Also in the name of independence and minimal investment, we launched Cato’s partner portal, where partners can independently get trained and certified, register deals and track their statuses, manage the pipeline and collaborate on opportunities, propose marketing and lead generation activities and get funding and other resources allocated to them to support their ongoing efforts — all of which have involved the vendor in the past .
Second, knowing that trust between partners and vendors is not at its peak, we created the Rules of Engagement, which we communicate to partners during onboarding, monitor internally, and built processes and approval cycles to protect partners’ assets and investments. These rules address deal registration protection, incumbency on renewals, and other aspects that are crucial to building partner confidence. We also minimize potential channel conflicts by planning our needed coverage and calculate channel capacity, so we don’t overpopulate any territory or market segment. In that, we allow our partners’ growth, differentiation, and profitability.
Third, we simplified everything, such as the value proposition, ideal prospects definition, and core use cases. Our partners know exactly when not to spend time pitching Cato, so it’s easier for them to focus their efforts and increase their ROI with Cato. Customers also appreciate simplicity. This simplified messaging allows our partners to enjoy an 80%-win rate post POC, and >90% renewal rate, with massive, upsell opportunities. All due to simplification and expectation alignment which our partners embrace.
To be honest, even the most compelling and well thought out partner program, is only secondary to a real market opportunity for one’s partners. Today, more than ever before, we know that the market opportunity for our partners is immense. Why?
The World’s First SASE Platform Gives Our Partners a Huge Head Start
SASE is probably the first successful attempt of a third-party, let alone the world’s leading IT analyst firm, to capture what Cato is all about. With this validation of Cato’s five-year-old vision, our partners know that they’re able to become market leaders themselves. Our partners are visionaries and foresee the inevitable change to the Wide Area Network, and how to secure it.
Partnering with Cato allows partners to expand their services offering both horizontally and vertically. By converging many disparate network and network-security capabilities including one cloud-native platform, Cato partners can deliver SD-WAN, SWG, CASB, SDP/ZTNA, and FWaaS with minimal difficulty. If they specialized in security, they can now deliver SD-WAN and global networking. Alternatively, if they specialized in networking, they can now go into security. If they wanted to shift from reselling appliance-based solutions and deliver managed services but couldn’t afford to, now they can, out of the box (or, should we say, out of the cloud).
The Bottom Line: 500% growth YoY
New partner programs are introduced by countless companies looking to build a channel ecosystem and grow their business exponentially. Veteran resellers (MSPs, VARs, and SIs) can see right through them. They can also recognize a true, channel-oriented vendor when they come across one. Cato’s channel led revenue grew more than 500% YoY (2018/17). That’s the best indication for us that our partners believe us. We respect our partners and our partners respect a better bottom line.