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ExtraHop: Partners Poised To ‘Own SMB and Midmarket For Us’

Q&A

ExtraHop’s new head of global channel envisions a day when the channel owns entire market segments – such as SMB and midmarket – for his company and gives it the leverage to reach $500 million to $1 billion in revenue.

Chris Lehman, formerly FireEye’s vice president of North America sales and channel, recently was appointed ExtraHop’s new senior vice president of worldwide sales. In his new role, he will drive the company’s global sales and channel strategy, helping the company continue to expand its footprint in IT operations and networking, as well as break out in the IT security market.

ExtraHop's Chris Lehman

ExtraHop’s Chris Lehman

In addition to FireEye, his career includes global sales, sales engineering and channel leadership positions at companies including EMC and Salesforce.

Last month, ExtraHop announced new professional services for cloud migration, data-center migration and microsegmentation.

In a Q&A with Channel Partners, Lehman talks about his company’s big growth opportunities, including cybersecurity, and what he plans to accomplish in his new role this year.

Channel Partners: How is your new job different from your previous job with FireEye?

Chris Lehman: It’s really just different in terms of the scope. So at FireEye, I ran the Americas enterprise and commercial sales organizations, as well as a renewals team. At ExtraHop, I’ve got the global organization — so global field operations and sales, as compared to FireEye, which was just specific to the Americas region.

CP: How do you plan to help ExtraHop expand its footprint in IT operations and networking?

CL: What I would tell you is that historically the primary use cases for ExtraHop have really played more in the network-performance and application-performance management and diagnostic space, as well as IT operations and analytics. So that absolutely has been a big focus of ours historically and we see the opportunity to expand into cybersecurity. The interesting thing is that this was really not something that we set out to do; it was something that our customers showed us they were doing already with ExtraHop. The analytics capabilities and the ability that we provide them to basically understand what’s going on inside of their network in real time by analyzing wire data is the perfect use case for that, for detecting anomalous behavior inside of a network, inside of the perimeter for cybersecurity purposes. So what we realized …  is either 50 percent or 60 percent of our existing customers are already using ExtraHop in a cybersecurity context, and when the company saw this and realized that, “Wow, our customer base is already using us for this,” and we looked at our breadth of capabilities and what we’re really good at, it just matched up really well with the cybersecurity use case.

I don’t want to speak for our CEO, but what he’s told me is one of the big attractions or appeal of bringing me on board was going to be my cybersecurity background and knowledge, and that I could help guide the company further into cybersecurity, and we just see it as one of our big growth opportunities.

CP: What sort of challenges does breaking out in the IT security market pose?

CL: Anytime a company expands into a new category or makes an explicit push into a new category, a big part of making that successful is how we market and position ourselves. We’re a platform and we always historically positioned ourselves as a platform. And the language that you use as a platform provider can sometimes be a little bit more broad, a little bit more generic than when you are a purpose-built solution.

A big part of how we’ll break into and create more momentum in cybersecurity is going to be the language that we use, how we market ourselves and to show that we’re not just a platform, that we are a purpose-built solution for certain cybersecurity use cases. So when we go into a customer, we’re not just talking about generic IT analytics; we’re talking specifically about our machine-learning capabilities and our ability to detect anomalous east-west traffic that’s going on inside of their environment, and to do that in the context of cybersecurity detection and response.

In large part the technology is already there, and we built out and added some additional capabilities, when we introduced Addy, which is our machine learning technology … we’re going to continue to expand on that in these bundles that we’re using as a company and these bundles will take our platform to a more purpose-built place for certain use cases, with cybersecurity being one of them.

CP: What is your take on ExtraHop’s channel strategy? Are changes needed?

CL: We have [more than] 200 reseller partners today, and my experience is that channel partners are looking for two things. No. 1 is you break your partnerships into two categories: You have your technology partners and then you have your VARs. And on the technology partner side, there [are] a lot of great synergies that ExtraHop has with other companies … there [are] a lot of different companies that we can work with from a technology-partnership standpoint where we fill gaps and holes in their technology stack, and we don’t really see any competitive elements. So there [are] lots of great synergies from a tech standpoint.

From a VAR standpoint, my experience is the VARs really want two things. They want predictability and the ability to earn very strong gross margin profits. And a big part of the successful channel strategy is creating and providing that predictability of how they work with ExtraHop, what specific solutions can they go out and position to their customers, how can we insert ExtraHop into their reference architectures and solution playbooks so that their salespeople can know exactly when to use ExtraHop, the problem that we solve, what makes us different/better than the competition, and they can do that in a high-velocity, very repeatable way.

So we want to create this predictability in terms of the solutions that they can use ExtraHop for, No. 1, and then predictability in terms of how we engage with them, and there [are] lots of different ways that you can engage with a channel partner. In some instances, it’s when they bring us into the opportunity, and in other instances we may be bringing them into the opportunity. But we want to make sure they have a very clear sense of what their gross margin opportunity is regardless of how we’re engaging with one another. So if we can create that predictability, we can give them certainty on the amount of gross margin that they can earn – and oh, by the way, make very rich and profitable margins – then we can be a very attractive partner for them.

CP: What do you plan to accomplish in your first six months to a year in this position?

CL: For me, the first six months is all about laying the foundation to help the productivity and growth of ExtraHop. And a big part of creating a productive, leveraged sales organization is in your partner strategy. So it’s laying the foundation on the rules of engagement that we use and follow when engaging with partners. It’s outlining and creating those clear expectations with the gross margins and solutions that we partner with. So a big part of my first six months is focusing on the productivity side of the equation in the sales organization. It’s making sure that our marketing message and our go-to-market selling motion is well defined and understood inside of the sales organization. And by focusing on the productivity of our sales organization, it’s going to put us in a position in another six months to really start to expand our sales organization, expand the number of sellers that we have, expand the number of partners that we work with, so that we can really start to accelerate our growth rate. We’re already a high-growth company, but we see an opportunity to really accelerate the growth even further.

CP: What sort of feedback have you begun receiving from partners? What are they telling you? Are there things they like and don’t like?

CL: It’s early on, but the feedback I’ve gotten is the channel community sees the power of ExtraHop and they see the power of our technology, and they see the ability to make strong gross margins and help their customers. So we think in a lot of ways the kind of core assets are there and we’re really poised to do a lot more and accelerate with the channel. But I think the channel is looking for greater predictability and greater certainty around the gross margins that they can receive from us, and they want to make sure they’re attractive and rich. So the good news is those are pretty easy things to clarify and work on … and can really help drive further engagement and acceleration with the channel. But they’re very excited about ExtraHop and what we can do together.

CP: How do you think ExtraHop’s channel strategy and partner program will look in three to five years?

CL: I hope it’s just bigger and better. We’ll continue to refine what we do, but we want to continue to expand on the breadth of it. One of our big goals and objectives it to get more leverage in our selling model. And we all know that the best way to create leverage in technology sales is through the channel. So I envision a day where the channel could own entire segments of the market for us, where they could own the SMB and midmarket segments for ExtraHop, where our salespeople are more focused on kind of the very high end of the market. And even in the high end of the market, we would continue to partner with the channel, but I hope to get to the point where they are a completely integral part of our distribution strategy and give us the leverage that we need to become a $500 million-$1 billion in revenue company.


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