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The cloud computing company continues to upgrade its channel program for a subscription world.
September 21, 2022
The Nutanix Elevate partner program is going to the next level.
On Wednesday, Nutanix, which enables hybrid cloud and multicloud computing, unveiled several key enhancements for its resellers. The changes come as part of the company’s overall strategy to get away from legacy compensation and sales models.
That’s because it’s a subscription world now — most cloud channel partners no longer want or need to be paid one time. Rather, they want opportunities to make money beyond the point of sale. But, for the most part, cloud vendors seem to be taking their time digesting and acting on that message. Two companies, Nutanix and VMware (competitors, incidentally), stand out as the most prominent exceptions. Both vendors have instituted so-called customer life cycle compensation, and they keep improving how they reward and motivate their partners.
The Nutanix Elevate changes, in particular, have been in the works for some time as the company implements upgrades in phases. Recall that, last year, the company started emphasizing partner expertise and capability over size, and began paying on a recurring-revenue basis.
Here’s our most recent list of important channel-program changes you should know.
Nutanix’s Christian Alvarez
“I’m proud that we went away from a traditional tiered partner program to a 100% competency-based program,” Christian Alvarez, Nutanix’s channel head, told Channel Futures exactly one year ago.
The updates announced on Sept. 21, 2022, reflect Nutanix’s ongoing efforts to give cloud partners what they want, specifically by shoring up that much-ballyhooed “customer life cycle” approach.
“[W]e’ve addressed many of our partners’ needs to engage with customers through their life cycle — not just selling the technology, but enabling them to adopt, perform, expand and ultimately renew,” Alvarez said. “Elevate now supports and rewards partners along this entire journey.”
Nutanix is kicking off the Elevate enhancements with something not yet common within the indirect channel: paying partners’ salespeople and engineers when they sell Nutanix into net-new accounts. Nutanix calls the initiative the New Business Individual Incentive.
“We really took our time” putting this aspect of Nutanix Elevate together, Alvarez told Channel Futures. The company had to consider local and federal laws, which require the compensation to count as ordinary income, and executives had to get partners to agree. With all of that cemented, Nutanix now may pass incentives and rewards back to the partner, where they then go from the partner to the individual.
“We’re somewhat arm’s length but we’re putting the onus and management of those rewards straight to the account manager and systems engineers,” Alvarez said. “Treating our partners as an extension of our sales is really fundamental and this is one big step in that direction to incentivize them for inserting Nutanix at the right time.”
Alvarez said that adding the individual incentives represents a direct response to partners’ requests.
“This is one that we’ve heard about from all of our partners,” he said.
The next change comes in the form of a pilot program for an incentive that will pay select partners for consistent, on-time renewals. Remember, Nutanix is now all software.
“This pilot program is essentially the first big step toward …
… continuing to do renewals alongside our partners and rewarding them for on-time renewals within that quarter and aligning incentives alongside lifetime value of customer,” Alvarez said.
To help secure those renewals, Nutanix also will provide partners who have a customer-success practice with access to data that will enable proactive selling. With end-user consent, Nutanix partners will be able to see which components clients use or don’t use, how they use it all, and where they might do better.
“I believe we are going to be at the forefront of this,” Alvarez said, emphasizing that Nutanix only will share data when customers approve.
Next, Nutanix Elevate also now features a channel-led selling rebate for partners who handle deals throughout the entire sales cycle on their own. Just like it sounds, the incentive pays partners for doing everything by themselves, taking Nutanix personnel out of the equation.
“It’s what we refer to as autonomous selling,” Alvarez said. “Historically, Nutanix has gone to market with our partners … but we believe that … we need to untether ourselves from our partners.”
Of course, when partners need Nutanix to help land a sale, the company will be there.
“This by no means means that we’re going to walk away and leave partners on their own,” Alvarez said. “But there are a good percentage of deals that partners should be able to do on their own.”
To help partners sell on their own, Nutanix also has revamped its Sizer capacity planning tool. And it is introducing a related Sizing Associate accreditation to its certification program. Nutanix will provide coupons and incentives to make sure all of its partners can access the training.
Those efforts will free up Nutanix – which is in the midst of some pretty big layoffs due to previous CEOs who “significantly overspent” – to “go uncover new earth,” Alvarez said.
That is not to imply that partners need to worry about Nutanix taking deals from them.
“We are certainly not competing with them,” Alvarez said. “We do not take opportunities direct.”
Nutanix in late August reported narrower losses and higher revenue than analysts expected. It showed a 10% increase in annual contract value billings, reflecting its shift to a subscription-only business, even though billings went down.
Channel Futures reached out to a couple of Nutanix partners for their opinions on the changes but did not hear back by time of publication.
Contributing Editor, Channel Futures
Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC.
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