vmware oracle sap cisco ibm rackspace channelincentives
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VMware Oracle SAP Cisco IBM Rackspace ChannelIncentivesTRANSCRIPT
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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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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
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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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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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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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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
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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)
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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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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
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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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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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* 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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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.