Internap: ‘We Are Wholly Committed to Our Channel Partner Program’

By Kelly Teal Comments
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Colo and cloud provider Internap on Friday confirmed that it’s trimming its agent rolls, but said the true number is from 40 to 10 – not hundreds as other sources close to the situation claim.

The disagreement stems from interpretation. Internap is cutting 30 master agents; but anonymous agent sources note that each of those masters has dozens of subagents, adding up to the reported 300-400 who this week learned they will lose their evergreen monthly recurring commissions from Internap.

For its part, Internap – which agreed only to an email interview and declined to answer all of the questions – says it continues to support the indirect channel. Reducing its agent numbers from 40 to 10 means Internap can put more investment into staff and training, said Nelson Santini, vice president of sales operations. Further, Internap now can “align with agents" who understand Internap’s strategy, he added.

“These agents share Internap’s go-to-market vision and have the capability to succeed," Santini said. “Further, with an increased investment in the program, Internap is much better able to engage and support this group of agents." 

That may come as little comfort to impacted partners. Santini confirmed that Internap has eliminated its evergreen commissions.

“Previously, certain agents received commission payment in perpetuity for sales leads which were referred to and subsequently contracted with Internap," he said. “The unintended consequence of this evergreen clause was a misalignment between current agent performance and compensation. Specifically, the evergreen clause created an ongoing annuity that undermines the urgency and incentive for supporting new business while creating a mismatch between cost and benefit for the agent program as a whole."

Internap appears to be skirting outright contract-default. According to agents affected by the evergreen change, Internap isn’t rescinding payments altogether – it’s dropping evergreen commissions from the 10-15 percent range to around 1 percent. That way, Internap continues to pay evergreen commissions on existing deals, although it reportedly will honor only one renewal, at the lower commission rate. After that, agents associated with the 30 masters that were cut appear to be out of luck. And the remaining 10 master agents stand to earn lower commissions on existing and future deals. In response, a lawsuit looks to be pending but details have yet to be revealed to the press.

Meantime, Santini said Internap is “wholly committed to our channel partner program and expect[s] to continue to increase our investments in the program with a group of highly motivated, successful agents."

 

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