Rackspace Debuts Restructured Partner Program
Rackspace Hosting, which recently joined our SaaS 20 Stock Index, has restructured its partner program along lines that will probably seem familiar to anyone with prior exposure to channel initiatives.
The company on Dec. 8 rolled a revised Rackspace Partner Network, creating four levels of participation: Member, Silver, Gold and Platinum. The move was made to present a clearer compensation picture to partners. Robert Fuller, vice president of Rackspace Worldwide Channel, said the company’s channel team spent several weeks meeting with partners — from small IT consultants to large distributors — to see what they wanted out of an updated program. What they mostly wanted was a program easy to understand partner classifications and financial incentives.
To that end, Rackspace created the four partner tiers. The Member level, Fuller said, targets partners new to the program or those closing one hosting opportunity per year. Partners don’t need to meet a particular revenue thresholds to participate.
The compensation at this level is 5 percent.
Partners must close two or more deals a year to join at the Silver level and obtain a 10 percent compensation rate for doing so. Revenue targets kick in at the Gold level. Participants must have about $30,000 in monthly recurring revenue and close 5 new contracts each year. The compensation rate is 12 percent for those partners. The top tier, Platinum, calls for partners to close eight or more opportunities and bring in $75,000 in monthly recurring revenue. Channel partners are eligible for 15 percent compensation.
Fuller said compensation can be in the form of commissions or discounts.
In addition to a clearer comp plan, partners also sought more consistency in Rackspace’s channel program. Partners doing business globally were looking for the same partner benefits from one region to another. Fuller said the restructured program delivers the same benefits, whether the partner operates in North America, Europe or Asia. He said Rackspace has just more than 1,000 partners worldwide.