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Palo Alto Updates Channel Program, Adds MDF, Training Ops

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Lorna Garey**Editor’s Note: Click here for a list of February’s important channel-program changes you should know.**

Palo Alto Networks announced on Monday updates to its NextWave channel program. Todd Palmer, VP, Americas Channel Sales, told Channel Partners that the changes are aimed at enabling differentiation, increasing customer loyalty and enhancing partner profitability, which drives investment. The company also wants to make profitability more predictable.

Palo Alto Networks' Todd PalmerPalmer said Palo Alto’s channel program is popular with partners, and he backs that up with an independent global partner satisfaction survey.

“The feedback was phenomenal,” he says. “A Net Promoter score of 59 is off the charts. Our partners told us all the things they liked, but they also told us a couple of things we could improve upon.”

That survey, along with a study of 23 partners doing more than $1 million worth of sales and whose businesses have grown in excess of 100 percent, influenced the program changes.

“What did those [high-growth] partners do differently from those that grew at a slower rate?” said Palmer. It comes down to spending money to make money — they have invested eight times more in technical and sales training and have deep benches of employees with advanced certifications. They also tend to sell the complete Palo Alto platform, comprising next-gen firewalls for the perimeter, data center and virtual machines as well as endpoint protection. {ad}

New Wave Program

Palmer told us in November that Palo Alto has no plans to build a managed-services business and thus will be 100 percent dependent on the channel, and that’s not changing. But other than that, he’s keeping his options open and focusing on what matters to partners.

“We wanted to do things that make us a lot easier to do business with,” he said. One area he called out is the deep discount given to partners that bring in new customer opportunities.

“We have a rock-solid deal-reg program,” said Palmer. “If they are the approved deal registration, they get a significant discount delta. That gives them the confidence to invest the time, energy and resources to win that business and not worry that they’re going to get undercut.”

Palo Alto also is encouraging partners to expand their practices to the company’s Traps advanced endpoint protection. Palmer acknowledges the cost of achieving specialization and says that, as a special incentive, partners at all levels that invest in achieving the Traps endpoint protection specialization will get the same highest possible deal-registration protection – up to 25 percent – along with …

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… added business development and demand-generation help.

Specific program changes include:

  • New specializations, including a curriculum to train pre-sales engineers to become security experts. That’s aimed at helping partners grow expertise in-house versus competing to hire costly security talent. There will be nine pre-sales specializations with different levels and specialties (cybersecurity, platform, endpoint, mobile, data center, platform and data center) and roles (foundation, associate and professional).

“We spend a ton of time with technical enablement,” said Palmer. “We also include partners in all our SE training — partners can go to the exact same courses our SEs go to. They love hearing the unfiltered information.”

  • New opportunities to achieve higher deal closure rates and reduce the cost of doing business with Palo Alto, including improved Diamond and Platform margins that reward partners that exceed quarterly growth targets. One incentive is a new pool of development funds. “Fifty percent can go right to the bottom line to increase profitability,” he said. “The rest gets reinvested back into business building.” A partner might offset new headcount or buy new demo gear. That MDF program launches in August.
  • Better visibility into Palo Alto’s back-end systems, including a deep view into all deal registrations with a shortened SLA for approving registrations; enhanced details on education and certifications; and a new platform for renewals that includes proactive notifications, equipment upgrades and quoting tools. “Renewals are a big business,” said Palmer. “If a partner sells a deal, that partner is grandfathered in for all future renewals for subscriptions and support. That’s essential considering the high renewal rate.”

While he wouldn’t give an exact figure, Palmer said renewals are “higher than 90 percent.”

  • Deeper discounts and reporting on demo gear based on NextWave level. Diamond partners will see a 13 percent bump in their NFR discounts. Palmer says placements of firewall appliances at potential customer sites are a powerful sales tool. The systems are placed in a tap configuration for several weeks. Partners then go back and walk through the activity picked up on the network.

“That report tells the customer all the applications running in that environment, it shows the risk level associated with all of those applications, and it shows who specifically is using those applications,” he said. “When customers run [a security life-cycle report], we win over 80 percent of the time. Customers do not want that technology leaving their environment.”

Palmer acknowledges that Palo Alto’s security model is different from what customers might be used to, and that winning business can take some time. However, once a customer is signed on, retention is almost assured.

“We’re going to win and lose together,” he said.

Follow editor-in-chief @LornaGarey on Twitter.


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