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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
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Summary
Ease of use (rank)
Sales Method Incentive Elements Key Differentiator
VMware 1 Indirect through Disti-Reseller
various front/back-end rebates, SPIF, MDF
limited time incentives, localized rates and eligibility,
profitability for reseller much higher than disti, partner can't
claim both influence and sell fee
Oracle 2 Direct and indirect (through SIs)
"sell" rebates up to 10%
3 rebates all stackable
Microsoft 3 95% revenue through partners
Enterprise, Cloud, SMB, SAM incentives
large partner network
IBM 4
Hardware: 33% through partner, Software: 15% through partner
fees for identifying, selling, and fulfilling
limited time incentives, 2X incentive for displacing
competitor
Cisco 5 80% through partner
various front/back-end rebates, SPIF, non-monetary rewards
localized rates, 6 month design cycle, high bar for eligibility,
incentive for displacing competitor
Rackspace N/A Not known referral fees, 5-15% hosting, 5-15%
reseller discounts
progressive rates
SAP N/A 20% through partner
MDF (3-5%) various non-financial benefits
VMware
As of 2014, VMware has 17,585 partners in North America1. VMware
sells through a two tier disti-VAR
channel. VMware allows distributors to receive on average 1-2%
margin and VARs typically get 10%
through backend rebates.
Solution providers (=Resellers)
Professional Enterprise Premier
Financial
Benefits
Solution rewards
Sales rewards (SPIF)
Advantage+ Opp Reg / Development Fund contribution
Volume Purchasing Program
Enterprise License Agreement preferred pricing
Premier rewards
Requirements 1xVSP/VTSP 2xVSP/VTSP/VCP* 4xVSP/VTSP/VCP
1
http://www.crn.com/partner-program-guide/ppg2014-details.htm?c=190
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
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Infra & virt competency Infra & virt + 2(1
developing)
additional competencies
$10,000 ($2,500 developing)
revenue
$1,000,000 ($500,000
developing) revenue
*VSP: VMware Sales Professional, VTSP: VMware Technical Sales
Professional, VCP: VMware Certified
Professional
Consulting and integration partners (=SIs)
Regional National Global Global Premier
Financial Benefits Advantage+
Volume Purchasing Program
Requirements 3 competencies 3+ verticals 3+ verticals
1 service line 2+ service line 2+ service line
Solution rewards is a quarterly backend rebate to resellers with
an eligible competency calculated off
the list license value of all eligible strategic product sales
that are relevant to the partners solution area
of expertise. This is stackable with Advantage+ incentives, does
not have minimum deal size
requirements, and available to all partner levels. Product
eligibility and rates are adjusted every six
months.
Eligible competencies for Solution Rewards Rate
Server Virtualization (formerly Infrastructure
Virtualization)
Management Operations
Management Automation (formerly Cloud IaaS)
Business Continuity
Virtualization of Business Critical Apps
Hybrid Cloud (vCHS)
Desktop Virtualization
5% for ThinApp, vCHS, Site
Recovery Manager
10% for Horizon View, vSphere
with Ops Management
Advantage+ incentives consist of 3 different rebates.
Opportunity Registration discount provides up to
12% discount when partners resell. Development Fund Contribution
(similar to Microsofts Coop)
provides up to 12% in marketing funds when partner influences
sale but the deal is fulfilled through
other partner. A partner can get either opportunity registration
or the development fund but not both
on the same deal. Product accelerators provides additional
discounts for specific strategic products
and are evaluated every six months. The minimum deal size is
$6,000 list license value. Starting May 12th
2014, the Advantage+ applies to US Federal opportunities.
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
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Volume Purchasing Program (for SMB and CTM customers) allows the
partner to give the end customer
volume based discounts. Points are accumulated for each deal
after the initial order (2 year roll-off). 1
VPP point = $100 VMware MSRP.
Level Points Discount
1 250-599 4%
2 600-999 6%
3 1000-1749 9%
4 1750+ 12%
Enterprise License Agreement preferred pricing offers 10%
discount to the transacting partner or 10% as
development fund contribution if the approved sale is fulfilled
by another partner.
Premier Rewards provides Premier level partners with a 2%
quarterly rebates if they have met or
exceeded quarterly net license and support and subscription
revenue targets set by VMware. Rate
multipliers are applied on a sliding scale of attainment from
80% to 120%. The Partner can earn 1% in
development funds if attainment falls below 80%.
Renewal rebate offers Premier Solution Partners a 2% rebate for
all qualified renewals.
Cloud Credits Purchasing Program allows customers to buy credits
from an SI partner and redeem it for
hosted services. Premier partners get 2% backend rebates.
According to the 2012 Infotech survey as part of the MPN Loyalty
project, partners said that they were
satisfied with VMware incentives payment accuracy/timeliness,
rules and requirements, and incentive
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
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dollar amounts whereas partners were less satisfied with
Microsofts opportunity management,
incentive dollar amounts, and rules and requirements.
In June 2014 VMware launched its new vCloud Hybrid Service
program with additional enablement,
partner incentives, customer promotions and enhanced support to
benefit its entire U.S. and UK partner
community. As of June 1, partners now have access to incentives
focused on delivering vCloud Hybrid
Service - Disaster Recovery, Virtual Private Cloud and Dedicated
Cloud to its midmarket customers
through the new Mid-Market Cloud Surge Program. From June 2014
to December 2014, partners will be
paid a quarterly back-end rebate for signing up mid-market
customers (=New Logos) that are new to
vCHS (rates below). A one time rebate of $500 will be earned for
each qualified sale during June up to a
maximum of 300 qualified sales per quarter per partner. In
addition, a one-time rebate will be earned if
the qualified sale includes certain vCHS SKUs. The eligible SKUs
and rebate rate are below. Minimum
payout threshold is $100 and max cap is $100,000 per SKU.
In addition to the partner incentives, VMware is providing all
end-user customers with a price promotion
for a three- or 12-month Virtual Private Cloud, vCloud Hybrid
Service Disaster Recovery, and Dedicated
Cloud. Details on this promotion, including up to a month of
free service are available here. As a way of
providing additional training for its partners, VMware has also
instituted a Hybrid Cloud Solution
Competency initiative meant to help resellers get up to speed
with the new service and sell the vCloud
system to end users.
With VMware, resellers have more to gain financially than distis
and the partner can only claim a
transacting or influencing incentive but not both, so SIs are
free from LSPs claiming both influence and
sell fees. The company also runs accelerator incentives for
short periods of time. VMware announced
during Partner Exchange 2014 in February that they will now
allow partners to join the VMware Partner
Network without having to identify with a specific program
(Solution Provider, Reseller, Distribution
etc.) This is a way of protecting partners from cornering
themselves into an individual partner program.
The company also announced Elite Partner initiative where
qualifying partners will be provided with
access to early tech and go to market strategy behind it. Also
Professional tier partners will now be
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
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eligible for the Advantage+ sales rewards (SPIF for sales reps)
with the rate increasing for Enterprise and
Premier tier partners.2
During the EMC World 2014 Conference in May, EMC announced the
new Business Partner Program,
offering rewards for building investments with the company
across EMC and its federation of
companies. The company is offering partners qualified in VMware,
Pivotal, RSA and VCE programs cross
program training credits, with additional incentives added for
reselling solutions built using a
combination of EMC, VMware, Pivotal, and VCE technology.
VMware Transactional Purchasing Program (TPP)
TPP provides tier-based volume discounts for partners to offer
to U.S. Federal customers. For most
products, one TPP point is roughly equal to $100 in U.S. Federal
List Price. TPP points are assigned as a
calculated value, and vary by product. TPP discounts are only
applied to the license portion of a
customers purchase
TPP Level Point Range Discount
1 50-599 5%
2 600-999 7%
3 1000-1749 10%
4 1750+ 13%
VMware defines US Federal Government Customer as
- All Federal agencies, departments, commissions, boards,
offices, councils, or authorities,
including Government Agencies as described above situated in
U.S. Territories outside the
Continental United States, Hospitals, Medical Centers, and,
other Health Facilities operated by
U.S. Federal Government agencies.
- All U.S. Tribal Government entities, including, but not
limited to those listed at this site:
http://www.usa.gov/Government/Tribal_Sites/index.shtml,
including For-Profit entities
operating under the authority of a governmental bureaucracy such
as Indian Gaming Casinos
- All Federally Funded Research and Development Centers
(FFRDCs)
- All Resellers or Systems Integrators (also referred to as
"Prime Contractors") operating on the
behalf of an otherwise-qualified Govt User (as identified in the
first four bullets) is considered a
Government Customer for the specific tasks performed for that
End-User
In September 2014 VMware launched a new partner program for ISVs
called vCloud Air. Through this program, ISVs will be armed with
the tools they need to help guide customers on their hybrid cloud
journey, including information on key hybrid cloud use cases, such
as dev/test, packaged application migration, and disaster recovery.
ISVs taking part in the program can get their apps certified with
"VMware Ready" status, which shows the app has been tested and
validated to run on the vCloud Air
2
http://m.thevarguy.com/information-technology-events-and-conferences/021214/pex-2014-vmware-unveils-channel-partner-program-enhanc
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
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public cloud. The program has three levels -- 'Access' is the
entry-level, 'Elite' is the midrange and 'Premier' is the top tier.
Each comes with a logo for ISVs to display on their websites. The
vCloud Air ISV Partner Program also includes business, sales and
marketing assistance for ISVs that are looking to adjust their
business models to the cloud. . VMware has been running the program
as a pilot with "key" ISV partners.3
To target the education sector, partners can gain the academic
specialization and become eligible for
Academic SKUs and pricing.4 A typical academic/non-profit
discount is 40% off US list cost on licenses.5
For higher education institutions VMware provides a $250 annual
subscription (VMware Academic
Program) that offers unlimited downloads of their most popular
products, with renewable 365-day fully
functional licenses (limited to a single license key per
product, per user), lab Installation, eLearning
material, and discounted vouchers for Certification
Examinations.6 In addition, vSphere, View, and
Zimbra qualify for E-rate funding (administered by USAC,
provides discounts to schools and libraries on
tele/IT services).7
Airwatch Partner Program
VMware acquired Airwatch earlier this year. Effective July 1,
the AirWatch Enterprise Mobility
Management Platform through Subscription Cloud (SaaS) SKUs will
be available on the VMware price list
to our global network of more than 75,000 VMware partners
VMware partners who are not already enrolled in the AirWatch
partner program can complete a four-
hour on-demand AirWatch Cloud Partner Training and pass a short
exam to gain access to the SKUs.
Current AirWatch partners can now also join the VMware Partner
Network. Partners who currently
participate in both VMware and AirWatch partner programs can
either continue to purchase as they do
with AirWatch or chose to instantly transact with VMware SKUs
via authorized VMware distributors.
AirWatch sales will remain a separate sales and channel
organization, and will continue to sell directly
and through channels.
- Referral Partners are organizations that may or may not have a
strategic presence in the
enterprise mobility marketplace. AirWatch Referral Partners
identify new opportunities
and are compensated for their involvement in the selling
process. All business is sold
through AirWatch with the referring partner receiving a
commission upon AirWatch
receiving payment from customer. No fees to join.
3
http://blogs.vmware.com/vcloud/2014/09/introducing-new-vmware-vcloud-air-isv-partner-program.html?utm_source=rss&utm_medium=rss&utm_campaign=introducing-new-vmware-vcloud-air-isv-partner-
program 4
http://www.itx.com.au/updates/documents/VMware_document_9403.pdf 5
http://www.softchoice.com/licensing/vmware/ 6
http://labs.vmware.com/academic/licensing-overview 7
https://www.vmware.com/files/pdf/VMware-Eligibility-for-E-Rate-Funding-FAQ.pdf
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
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- Reseller Partners are organizations that have a strategic
presence in the enterprise
mobility marketplace. AirWatch Reseller Partners identify new
opportunities and are
compensated by purchasing AirWatch solutions and services at a
discounted margin
from MSRP and selling at a partner-defined price point. Fees:
$2,500.
- Service Provider Partners are organizations that currently
deliver mobility solutions to
their customer base. AirWatch Service Provider Partners maintain
control of their
environment within the AirWatch-hosted infrastructure and
provide their customers
with enterprise mobility management as a managed service.
Service Provider Partners
can "white-label or rebrand AirWatch solutions to maximize
partner brand recognition.
Fees: $5,000.
- Technology Partners are empowered to integrate their hardware
or software systems
with the AirWatch solution to increase market opportunities and
provide a
comprehensive solution to customers. Our mutual customers
benefit from this
combination of industry and technology knowledge in the mobility
marketplace.
Technology partners include device manufacturers, software
vendors, OEMs, and
service providers. Fees: $0.
- App Partners are concerned with developing enterprise-grade
applications with built-in
security and management controls. AirWatch App Partners leverage
the AirWatch
Software Development Kit (SDK) to integrate the same features
and functionality
provided by AirWatch into their own custom-built
applications.
Oracle
Oracle Partner Network (OPN), which is targeted at global system
integrators, now has 25,000 partners.
Revenue from the indirect sales efforts has continued to grow.8
In June 2014 Oracle announced a two-
tier distribution program for the Oracle Cloud portfolio,
engaging the value added distributors (VAD) to
extend Oracle's reach in the broad market and scale its network
of Oracle Cloud resellers.
Oracle has three stackable rebates for VARs and VADs. The
Registration Rebate is a 3% rebate on the net
license and/or hardware revenue recognized by Oracle for Broad
Customer Base transactions that are
registered by the reseller under the Oracle Open Market Model
resale initiative. Strategic Hardware
Rebate is a 5% rebate on the net license and/or hardware revenue
recognized by Oracle for named
Strategic Products in Broad Customer Base transactions. Added in
June 2013, Oracle on Oracle Rebate is
a 2% rebate for registered Oracle partners who sell both
hardware and software to the same end user
within 90 days. In June 2014 the company has announced that they
will be moving rebate payment from
8 FY13 Microsoft Compete Retreat Priority Competitor Handbook by
Gartner
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
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quarterly to monthly and added the Oracle Virtual Compute
Alliance Infrastructure system (integrated,
software-defined converged system designed to run any
application) to their Strategic Products List,
making it eligible for rebates.
In EMEA, public sector end user transactions are eligible for
these rebates. In Latin America, public
sector end user transactions are eligible for rebates provided
that both the VAD and the reseller
involved in the transaction have met Oracles due diligence
requirements. In Japan and Asia Pacific,
public sector end user transactions are eligible for rebate
credits, but rebates will be paid only in the
form of credit memos that may be applied against future
purchases of Oracle products. In North
America, transactions by and/or with public sector entities are
not eligible for rebates under any
circumstances. For purposes of the OPN Incentive Program, a
public sector entity is any government,
legislature or decision-making body, judiciary, instrumentality,
department, or agency at any level
(national, local, municipal or otherwise); entities managed,
controlled or majority owned by government
interests; public organizations or foundations of any kind
(including political parties, political
organizations, or political candidates); and any public
international organization, such as, but not limited
to, the International Red Cross, United Nations, or the World
Bank.
The licensing for education sector is based on the Oracle CAMPUS
model, with significant discounts of
more than 60%. For example, university departments that
participate in the CAMPUS license will not be
charged a licensing fee, and departments will not need to
procure and negotiate a license directly from
Oracle. Maintenance fee is shared across University departments.
CAMPUS licenses are eligible for
Oracle rebates.
According to the 2012 Infotech survey as part of the MPN Loyalty
project, partners said that they were
satisfied with Oracle incentives payment accuracy/timeliness,
clarity of support availability and
resolution, and incentive dollar amounts whereas partners were
less satisfied with Microsofts incentive
setup process, incentive dollar amounts, and claim
submissions.
SAP
20% of SAPs revenue come from the channel.9 As of 2014 SAP has
2950 partners in North America (75
Gold, 145 Silver, 890 Bronze, 1840 Open)10. Through their
PartnerEdge program for VARs, Service
Partners, Software Solution/Tech partners, and Authorized
Resellers, SAP provides various support
including tools and training. For VARs SAP offers a standard
discount (rates not known) on the list of
products that the VAR is authorized to sell, commensurate with
the VARs program level (Bronze, Silver,
Gold). The VARs can also accure MDFs (Bronze 3%, Silver 4%, Gold
5%) as percentage of current SAP
customer license sales calculated at the beginning of the month
for the previous months performance.
9
http://www.asugnews.com/article/new-and-improved-a-look-at-saps-channel-strategy
10
http://www.crn.com/partner-program-guide/ppg2014-details.htm?c=148
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
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Cisco
Cisco has a mature sales / marketing organization that exists in
a matrix design that allows them to align
resources and expertise (particularly vertical) with client
need. Programs like the Global Enterprise
Theater allow Cisco to focus deep sales, marketing, and
technical expertise on a limited number of
strategic accounts where Cisco is interacting directly with the
CIO. Cisco has approximately 18,000 sales
and marketing FTEs with 16,000 devoted to the core networking /
DC offering and 2,000 focused on UC.
Direct / partner sales both count towards a sales persons quota.
Cisco attributes 80% of its revenue to
its partner ecosystem, which is made up of over 69,000 partners
worldwide (more than 13,500 certified,
plus 45,500 registered partners). Cisco reorganized its sales
efforts into two global go-to-market models
(partner led and customer led) to better allocate resources
across the various customer segments, and
to develop programs to support the ecosystem's diverse partner
models. The partner program benefits
from a historical commitment from Cisco to partner success
augmented by clear rules of engagement.
For example, Ciscos HCS UCaaS solution is essentially private
labeled and only available through the
channel. Customer must leverage the channel for service
delivery, which dramatically lowers the
channels concern about competing with Cisco.11
Ciscos incentive offerings to partners are similar to Microsoft
in terms of diversity.
Cisco-Funded Network Assessment Program (NAP) - Offers partner
with an ability to book a $200k deal
$1000-$5000 incentives for performing on-site network audits in
targeted end-customer accounts over
1,000+ PCs/Servers/Nodes. This is the equivalent of Microsofts
Software Asset Management.
Cisco Rewards - Cisco Rewards is open to Account Managers and
Sales Engineers of Cisco Select
Certified and Registered Partners in participating countries
within Emerging Markets. Points are earned
for selling eligible Cisco products and solutions and through
participating in Cisco activities. Points can
be redeemed for brands, enriching experiences, travel, and other
non-monetary rewards.
Opportunity Incentive Program (OIP) - Gold, Silver, Premier,
MSCP and select certified partners are
rewarded for identifying, registering, and closing new business
opportunities. Partners receive 8%-25%
incremental discount on global price list (minimum deal size
$10,000) at the time of placing the OIP
order. Reduces Ciscos cost of sales by promoting partner
independence. The account manager
automatically approves the incentive as long as the opportunity
is not in the Cisco Forecast. The first
partner to register the opportunity is awarded. The rates are
usually 8 points extra from partners
discounts. Normal Gold discount is 42%, so 50% total.
Teaming Incentive Program (TIP) - Rolled out in Aug 2011.
Rewards Gold, Silver, Premier and select
certified partners by creating tighter alignment with Cisco
Partner Account Managers and partners by
teaming early in the sales cycle to win the opportunity. Partner
must complete 2 pre-sales activities and
have Partner Value Statement. The program grants 5 margin points
to partners identified early in the
11 FY13 Microsoft Compete Retreat Priority Competitor Handbook
by Gartner
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
10
sales process jointly executing with Cisco on sales
opportunities. Minimum deal size is $50,000 ($25,000
for first order). This provides Cisco with a partner loyalty
lever, reduces cost of sales, and increases
win %. This requires proof of engagement and approval from the
account manager.
Value Incentive Program (VIP) - This program is geared toward
partners with focused practices on
technologies that are part of Cisco architectures such as
Collaboration, Data Center and Virtualization,
Borderless Networks, or Express (SMB). Participating partners
will receive a semiannual backend rebate
(rates not known) when they meet or exceed program requirements.
The program is re-launched every
6 months. VIP 22 launched in Aug 2013 brings a new 90-day grace
period on select SKUs so partners can
adapt to new product transitions quickly and with less impact on
their payout. VIP supports partners in
developing tech within a Cisco practice and the resulting tech
is a Cisco app/solution. Partners enroll to
this program and must have minimum $50k in UC or Video sales.
Products are grouped into different
rates ranging from 5-20%. For UC/Video they have 16-18% kickback
for the yearly revenue. The partner
must meet the customer satisfaction (CSAT) score threshold from
minimum of 10-20 valid responses to
be eligible for payment. VIP reduces Ciscos R&D costs.
Not for Resale (NFR) - Allows eligible partners to purchase
discounted Cisco hardware and software for
use in non-revenue-generating activities such as labs, demos,
and internal course development or
training.
Technology Migration Program (TMP) - This global program gives
trade-in credits to customers for most
major products offered by Cisco and for select competitive
products when upgrading to a new Cisco
networking solution.
Solution Incentive Program - Ciscos solution incentive program
is targeted at business solution
providers and not SIs or equipment resellers. SIP provides
partners discounts when developing and
selling solutions that integrate vendor-partner business
applications and services using Cisco technology.
At least one part of the solution must have advanced
technologies such as voice and security, and it
must be repeatable (meaning the partner has to sell it more than
once to qualify). This is a Trojan horse
for Cisco and increases Cisco participation in deals.
Partner Pre-qualification
- Cisco Gold, Silver or Premier, MSCP Certification
- Cisco specialization in relevant advanced technologies,
depending on the solution
- Focused sales staff selling the solution (Minimum of 2 sales
people for SMB solutions; Minimum of 5
sales people for enterprise solutions)
- Reference solution architecture that includes Cisco as the
networking component
- Business plan template for selling the solution (Solution
overview, GTM strategy, support model,
reference architecture)
- Forecast for Cisco hardware, software & services validated
by Cisco acct team
Solution prequalification
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
11
Solution is repeatable, must include proprietary or third-party
business-relevant application, solution
expands need for network bandwidth resulting in upgrade of core
networking technology and/or re-
engineers a manual business function to leverage networking
technologies, solution includes all
required end-customer planning, design, implementation and
operation support services for both the
network and applications components, Cisco products and services
are no more than 80% of overall
solution based on net value of the total solution.
Deal requirements
Minimum $10,000 Cisco list price in SMB solutions or $100,000 in
Enterprise market solutions, solution
is approved 12 months from approval date
Discounts
Up to 54% discount off list price for eligible products, up to
25% discount for eligible services, stackable
with VIP.
Cisco is also known to have a compete program targeted at
Microsoft where a partner can get up to 65%
discount and access to SKUs where they can give 2 for 1
endpoints by displacing Microsoft.
Public sector deals are eligible for Opportunity Incentive,
Solution Incentive, and Network Assessment
Program (SAM equivalent) but the rates remain the same. There
are no incentives aimed specifically at
government customers but the company does provide General
Service Administration (GSA) pricing to
federal agencies. For the academic sector, education deals are
eligible for Opportunity Incentive and
Solution incentive with a similar/same rates. Ciscos solutions
are eligible for E-rate discounts (between
20-90%) and schools not eligible for E-rate can leverage various
financing options (payment deferral,
tax-exempt lease purchase etc.) through Cisco Capital.12
During the Cisco Partner Summit in March 2014, Cisco announced
that the current 15,000 SKUs eligible
for VIP will be reduced in August to focus on hybrid IT, and
activation and renewal will also be incented
through VIP. In the second half of 2014, Cisco will bring all of
its deal registration programs (SIP, OIP, TIP)
12
http://www.cisco.com/web/strategy/docs/education/Education_Financing_Options.pdf
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
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under a single umbrella called the Cisco Deal Registration
Program to make it easier for partners to
apply for incentives and be rewarded for their full value. Cisco
will still provide incentives in all the same
areas in deal registration, but will now do so through a single
program, and will increase margin lift for
solution selling from five points to eight points of incremental
margin. Cisco will also phase out the Silver
partner tier over the next 24 months. Currently, the company has
about 300 Silver partners worldwide,
and for most, the tier is a stepping stone. For partners with
narrow and deep specialization, it is a step
en route to a Master specialization, and for broader partners
touching more Cisco technologies, it is a
step en route to Gold partner status. Partner feedback was that
the value proposition and brand
strength of Silver was not very strong.13
According to the 2012 Infotech survey as part of the MPN Loyalty
project, partners were more satisfied
with Microsoft compared to Cisco in every aspect of incentives
including incentive dollar amounts,
payment accuracy/timeliness, and clarity of support availability
and resolution.
IBM
As of 2011 partners led about one-third of IBM's hardware sales
and served as the fulfillment channel
for about 50 percent of hardware deals. The channel generated
15% of IBMs software sales.14 50% of As
of 2014, IBM has 140822 partners worldwide (3441 Premier, 4865
Advanced, 132516 member).15
According to the 2012 Infotech survey as part of the MPN Loyalty
project, partners were relatively more
satisfied with Microsoft compared to IBM in all aspect of
incentives except the incentive setup process.
Partners were not satisfied with the incentive dollar amounts
and the claims submission for either
companies. IBM provides the following incentives to
partners.
Software Value Incentive
Software Value Incentive (SVI) is an IBM initiative designed to
reward Business Partners (Value Add
Resellers, Independent Software Vendors, Consultants, and
Integrators) for the value that they
contribute across different phases
(Identify->Sell->Fulfill) of a sale of IBM Passport
Advantage
Middleware licenses. SVI allows IBM Business Partners
participating in the Identify and Sell phases to
earn a fee payment (paid directly to the IBM Business Partner)
for demonstrating a contribution in these
phases. These fee payments are independent of any discounts and
rebates earned by Business Partners
participating in the Fulfill phase (paid through their Value Add
Distributor). The first IBM Business
Partner to register an opportunity and demonstrate active
engagement with a customer will be
approved to earn incentives. Incentives are contingent on the
customer completing the purchase but
may be earned independently of how the transaction is fulfilled.
Thus, IBM Business Partners who are
investing time to perform value-add sales activities such as
proofs of concept around SWG middleware,
or who design solutions integrating IBM software, can invest
their sales time with the confidence that
13
http://channelnomics.com/2014/03/27/cisco-scrap-silver-tier-next-channel-program/
14
http://www.crn.com/news/channel-programs/232602448/ibm-raises-the-bar-for-2012-channel-sales.htm
15
http://www.crn.com/partner-program-guide/ppg2014-details.htm?c=80
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
13
they will earn incentivesif the customer buys. They need only to
register and be approved for the
opportunity, and provide proof of performance. Once IBM Business
Partners are approved for Identify
and Sell phases, they can earn incentives regardless of who
fulfills the purchase. This protects the time
invested in selling on behalf of IBM. Each incentive element has
two components; a base fee and a
premium fee for transactions that are sold to end users that are
designated by IBM as general business
(GB Accounts).
In order to be eligible, the partner must have a current
software IBM Sales Certification and two current
software IBM Technical Certifications in at least one brand
Product Group or in one Brand (for open
distribution products). The partner must be approved by IBM for
SVI participation. Approval for SVI is
granted at the Product Group level. Product Group approval
criteria for SVI will differ based on the
distribution model for the country and the product. Ability to
register SVI opportunities for products in
one Product Group is independent from ability to register for
products in another product group.
Business Partners are not eligible to receive fee payments for
the same value-add under more than one
program.
There is a dedicated IBM channel incentives team responsible for
evaluating opportunities submitted for
SVI eligibility and approving them for Identify and Sell
incentives. IBM will review the registered
opportunity records to determine whether or not the opportunity
is known to IBM and the Business
Partner will be notified whether or not the registered
opportunity is eligible for SVI fees. This eligibility
decision is determined at the Brand Family level (ex., WebSphere
App Servers, Tivoli Security Data
Services, Lotus Notes/Domino) and it is possible for brand
families within an opportunity to have
different eligibility decisions. For example, if a Business
Partner registers an opportunity at an end
customer which includes products in both WebSphere App Servers
and Lotus Notes/Domino brand
families, but there is already a known opportunity to IBM for
Lotus Notes/Domino at the same end
customer in the same country, the Business Partner may only be
approved for the WebSphere App
Servers content of the opportunity.
If more than one Business Partner submits a registration for the
same opportunity, the first Business
Partner to register is the one who may be eligible to earn
incentives. When a Business Partner submits
an opportunity for SVI eligibility consideration, the SVI
Expiration Date is set 270 calendar days
(approximately 9 months) from the date it is submitted. If the
opportunity is not closed prior to the
expiration date, it becomes ineligible for SVI fees. To be
approved and receive an SVI Identify and/or Sell
fee payment, the Business Partner must demonstrate active
selling engagement with the customer for
the IBM products by providing supporting documentation that
shows their activities that contributed to
the customers decision; and the customer must complete the
acquisition of the IBM products.
Examples of supporting documentation would be a proposal for a
solution, statement of work, proof of
Concept, etc. and must support the forecasted revenue in the
opportunity in order to be approved.
The Business Partner must indicate when the opportunity is won
and provide supporting documentation
to show their influence of the customers buying decision when
they submit their SVI payment request.
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
14
After a registered opportunity has been matched to an IBM sales
order, the Business Partners sales
documentation is reviewed by IBM to determine whether or not the
sales activities performed by the
Business Partner met the Sell criteria.
Once the SVI eligible lines items in the resulting IBM sales
order for an eligible SVI opportunity for which
payment has been requested are determined as payable, the
Identify and Sell fees are calculated for
each of these line items based on the SVI fee schedule. There
are no caps on the amount of SVI fees that
can be earned for an eligible opportunity; however revenue
eligible for the SVI fee payment cannot
exceed the revenue forecast as described below.
To calculate SVI fees, IBM will use an approximated Suggested
Volume Price, approximated suggested
retail price or approximated special bid price, as applicable,
for the Eligible Products included in the sales
order deemed as payable. IBM sets this approximated dollar
amount. If the forecasted revenue for a
brand family in an eligible opportunity is greater than the
actual revenue in the associated eligible sales
order line items for that brand family, the incentive will be
calculated based on the actual revenue
amount (provided the actual revenue amount is greater than the
minimum order threshold for the
GEO/Country) for those line items. If the forecasted revenue for
a brand family in an eligible opportunity
is less than the actual revenue in the associated eligible sales
order line items for that brand family, a
25% uplift will be applied to the forecasted revenue for that
brand family. The SVI incentive fee
percentages will be applied to the lesser of the actual revenue
in the associated eligible sales order line
items for the brand family, or the uplifted revenue amount for
the brand family (provided the actual
revenue amount is greater than the minimum order threshold for
the GEO/Country). Effective, July 1,
2014, IBM has limited influencer fee payments for Software Value
Incentive (SVI) and SVP Solution
Incentive The new maximum influencer fee payment is $250,000 US
per Business Partner, per
transaction. The new influence fee maximum payment rule applies
to all influence opportunities world
wide, except as follows:
SVI opportunities submitted and approved for eligibility prior
to May 12, 2014, will be honored
at the previous limit amount
SVI opportunities submitted and approved for eligibility and SVP
Solution Incentive
opportunities approved after May 12, 2014 and with a sales order
date prior to July 1, 2014
have a payment limit of 500,000 USD.
SVI and SVP Solution Incentives when the Business Partner
fulfills the licenses continue to have no limit.
A transaction for SVI, SVP Solution Incentive or a combination
of both incentives is defined as:
1. A single opportunity or multiple opportunities against the
same IBM sales order submitted by
the same Business Partner.
2. A single opportunity with multiple IBM sales orders submitted
by the Business Partner.
This change will assist IBM to rebalance its available incentive
budgets and funding to focus partner
incentives and rewards on the Enterprise Non-Select and Mid
Market end-user customers where the
opportunity for growth is greatest for the foreseeable
future.
Identify (Fee Payment) Sell (Fee Payment)
-
FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
15
Base (Enterprise/GB end user) 5% 5%
Premium for GB end user +5% +5%
The IBM Renewal Value Incentive (RVI) is an incentive on the
sale of IBM Software Subscription and
Support for IBM Business Partners who continue to provide value
add to customers to whom they sold
the new software license and received a value incentive through
IBM Software Value Incentive, IBM
Value Advantage Plus, IBM Value Advantage Plus for Government or
IBM Solution Software Value
Incentive.
The Up to Double (2X) SVI Competitive Incentive is designed to
reward Business Partners who displace
specific competitive software with eligible IBM software
products (as defined by IBM part number). The
competitive replacement opportunity must be submitted for SVI,
and must meet all standard SVI
requirements. Business Partners must provide supplementary sales
documentation which shows clear
communication with the end user regarding the competitive
replacement. To receive the full doubled
amount of fee payment, Business Partners must provide a
commitment from the customer to be a
reference.
Solution Accelerator Incentive
The Solution Accelerator Incentive rewards the simultaneous
resale by a single IBM Business Partners of
eligible IBM servers and/or storage with eligible IBM software
products (minimum $20,000 revenue).
This incentive has a base reward and a solution bonus reward
(Additional channel reward for selling
predefined solutions of hardware and software. Additional reward
only applies to the eligible software
content of the solution). Exact rates not known. Partners can
also earn a 5% rebate by including optional
IBM Technical Support Services that are eligible for the
Solution Accelerator Incentive.
Value Advantage Plus
Value Advantage Plus is an IBM initiative designed to
financially reward Business Partners who deliver
solutions through applications and/or services. At least 30% of
partners revenue must be value add
components. If these solutions are built around or designed to
operate on IBM Software, they may be
approved and qualify for financial incentives for the specific
IBM software when it is sold by the Business
Partner as part of their solution. Business Partners are not
eligible to receive both Value Advantage Plus
rewards and the SVI Sell incentive fee for the same product
sale. They can be eligible for Value
Advantage Plus rewards and the SVI Identify incentive fee if
they meet the SVI eligibility submission
rules for Identify and Sell and are approve for SVI fee
payments. The Value Advantage Plus incentive is
delivered through rebates paid to the Business Partners
Preferred Distributor while eligible SVI
Opportunity Identification fees are paid directly to the
Business Partner by IBM. Partner that fulfils with
a Value Advantage Plus solution in GB Enterprise receives 28%
rebate (VAP 15% + Fulfillment discount
13%) while a solution in GM MidMarket receieves 40% rebate
(20%+20%)
Public Sector
-
FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
16
Government deals are not eligible for the Software Value
Incentive, but are eligible for Value
Advantage Plus for Government rebate when selling pre-approved
solutions with at least 20% in value
add.16 The rebates are only for fulfilled orders and are
received from the VAD. Partners can get up to
20% rebate for General Business (GB) customers and compliance
reviews are held after purchase. A
proof of the partners influencing activities are required. For
Education, the IBM Academic Initiative is a
no-charge program providing educators with the training
materials, curriculum guides, software and
hardware needed to teach in-demand business and technology
skills. Faculty members, research
professionals at accredited institutions, and IBM employees
whose work supports the Academic
Initiative can join. Membership is granted on an individual
basis. There is no limit on the number of
members from an institution that can join. IBM offers discounted
lease and purchase options to
educational institutions whose faculty are Academic Initiative
members. Members can also download
some IBM software at no charge.17
Rackspace As of 2014, Rackspace has 3000 partners in North
America (500 Referral Program, 300 Reseller
Program, 50 Strategic Program, 200 Digital Program, 50 VC
Program, 220 Cloud Affiliate Program).18
Referral Program
When partner refers Rackspaces dedicated bare metal, Rackspace
Private Cloud (RPC), public cloud,
and email hosting to their customers and prospects, Rackspace
pays the partner the commission in a
single payment, reflecting the average monthly recurring revenue
of the lead the partner passed to
Rackspace.
Product Minimum
spend
Term
(months) Commission payout
Dedicated
Servers
and/or
Rackspace
Private
Cloud*
No
minimum
12 1x Average
Monthly
Recurring
Revenue
(MRR) of the
first 3 full
months paid
invoice
24 1.5x
36 2x
Cloud
and/or
Email
$50 None 1x
16
https://www.ibm.com/developerworks/community/blogs/5b3fcdff-c109-435b-bb73-e6a34fa4b66f/resource/MYR_06-2011/MYRSWGSalesIncentivePrograms_May2011-Vrabel.pdf?lang=en
17
https://www-03.ibm.com/ibm/university/academic/pub/page/pow_lease
18
http://www.crn.com/partner-program-guide/ppg2014-details.htm?c=136
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
17
* Rackspace Private Cloud Service Orders for recurring monthly
support services during a specified
minimum term only.
Cloud Affiliate Program
Partner uses web banners and links in their website to refer
cloud business to Rackspace and earns the
following commission.
Partner refers: Partner earns:
$150 $50
paid invoices per referred
customer within a continuous
12-month period
per referred cloud
account
Reseller discounts are as follows. Reseller also receives
marketing support from Rackspace depending on
level.
Level Revenue attainment Discount
Associate $1,000 - $4,999 5%
Preferred $5,000 - $14,999 10%
Premier $15,000 + 15%
Requirements: Have at least 2 Rackspace-trained non-technical
staff, Provide first-level support to your
customers before leveraging Fanatical Support, provide billing
and accounting support to your
customers, complete deal registration.
SAAS program
Discount to partner for their dedicated hosting (up to 15%) and
cloud hosting ($1500 cloud credit for
first 12 months of account ownership) needs.
Strategic Partner Program
Partners program tier is based on the points that they accrue
through referring or reselling Rackspaces
full suite of hosted solutions. Below is a breakdown of the
points / opportunities required for each tier
level, as well as the compensation percentage associated with
it, for each product set.
Dedicated Hosting 0.70 = 1 point
Cloud Hosting 0.70 = 2 points
Email Hosting 0.70 = 5 points
Member Silver Gold Platinum
Points Required and
Opportunities Closed
500 points or
1 opportunity*
2500 points or 2
opportunities*
30,000 points and
2+ opportunities*
75,000 points
and 2+
opportunities*
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FY15 VMware, Oracle, SAP, Cisco, IBM, Rackspace Channel
Incentives Joonseok Oh, Partner Incentives Team Worldwide Partner
Group
18
Dedicated and Cloud Hosting
(Reseller and Referral) 5% 10% 12% 15%
Rackspace Email and Hosted
Microsoft Exchange (Referral
only)
5% 10% 12% 15%
Rackspace Email (Reseller only) 66% 68% 70% 72%
Hosted Microsoft Exchange and
SharePoint (Email Reseller
only)
20% 20% 20% 20%
By mixing-and-matching multiple compute platforms the partner
can accelerate their tier level and
increase their Program earnings. Below is an example scenario of
a partner providing multiple solutions,
which demonstrates which tier level they would fall in.
Points Earned Points Earned
Partner refers 1 Managed Hosting deal for
1750 MRR (1750 / 0.70) x1 2,500
Partner then refers 1 Cloud deal for 500 (500 / 0.70) x2
1,429
Partner refers an Email deal for 250 (250 / 0.70) x5 1,786
Total Points 5,714 -> Silver Tier
Rackspace announced through their blog in September 2014 that
they are introducing a Master
Agent/Agent Program, a program through which a new segment of
partners can offer Rackspace
Managed Cloud and Fanatical Support to their end customers.
Through this new partner program,
Rackspace will provide the highest level of support to ensure
that an agents clients enjoy a smooth
cloud implementation and support experience, which ultimately
will enable agents to focus on building
their business and engaging with clients. Partners that join the
Master Agent/Agent Program will have
the opportunity to leverage market competitive compensation,
pre- and post-sale resources, and
training and sales enablement.