Most vendors want a channel partner on every corner just in case there’s a nearby customer with a need. But not Apptio.
Instead of thousands or even hundreds of partners, the Bellevue, Wash., startup that has become a darling of the Fortune 500 by helping them better manage their technology assets, wants only a few dozen partners. But the ones it wants need to be big, capable and committed. Among other things, they must be able to help big enterprises manage the systems, software and services they leverage through the cloud.
The solutions that Apptio provides are part of a growing portfolio of capabilities that belong to a new category of software called Technology Business Management (TBM). It’s actually a category that Apptio named, but others are falling into line. Big companies including Boeing, Target, Xerox, Safeway and Royal Bank of Scotland are huge fans.
The job for managing the company’s partnerships falls to Michelle Hodges, Apptio’s newly named vice president of global channels and alliances. For nearly two decades, Hodges has worked with leading companies on designing, building and managing partnerships and alliances. She’s worked for Microsoft, SAP and VMware.
In an interview with Channel Partners, Hodges explained the unique mission she is on at Apptio, one of the hottest companies in all of cloud computing.
Channel Partners: What was it about this opportunity that attracted you to the company?
Hodges: I’ve really had a jungle-gym approach to my career leading up to running all routes to market globally for a big vendor. This is certainly part of that. [The opportunity] here is taking a company with a market of $100 million onwards to $1 billion. It was a good fit from that aspect. And from my experience at VMware, I repeatedly competed against Apptio and lost quite often [laughs]. I saw a company that understood its space and saw the market in a different way than big vendors. What the “cloud” has done to the ecosystem for a channel geek like myself, is just fascinating. For a company like Apptio, which understands that deep in its blood, to be a part of this change, is pretty interesting.
CP: What do you mean by “what the cloud has done to the ecosystem”? Finish that thought and articulate a bit more what you mean …
Hodges: A big company or solution provider is not going to feel the impact of the cloud quarter by quarter. Year on year, they are going to feel their large systems-integration revenue decline and their dependency on services increase. A company that understands the services and process value around the software-as-a-services opportunity clearly offers a level of stickiness to the channel that is just purpose built for this transition. I hope that’s not too esoteric.
CP: It’s damned esoteric but not too esoteric.
Hodges: [laughs] At VMware, we were part of the creators of that. We knew what we were doing with the channel. Now I get to take that experience and help build an ecosystem that can take advantage of the new opportunities. We have the opportunity to build the level of services and extensibility into our go-to-market strategy that will be unparalleled compared to some other companies. We want to create an exciting opportunity for these partners to offer value to CIOs and the office of IT.
CP: What do you have in terms of channel infrastructure and programs, and what do you need going forward?
Hodges: We have a great 1.0 version of a program in place. We have an agreement stack, metrics in place for revenue, services and marketing leads, etc. The team here has done a great job of identifying our technology partnerships, identifying our advisory services partners like KPMG, etc. They have also started to peel back on who we want to do business with in the regional SI space and who we might want to do business with in the global space. Maryville and Evergreen might be good prospects. We have a very good foundation from which we can then start to build strengths around our go-to-market disciplines, capacities and services, etc. We could do some work around referrals, and we have a lot of opportunity around the Apptio marketing engine.
CP: When you think about partners, what’s the one skill set you need most? What don’t you have that you think you’ll need going forward?
Hodges: I will need more resources around global SIs. There’s a difference we see between global SIs and advisory services and cloud services providers. I need someone who understands all those influencers and the enterprise and corporate marketplace. That’s hard to find.
CP: How many partners do you need?
Hodges: We don’t that many more partners. We’ve probably got about 35 that are out there. We probably need to mix it up a little bit more in the regional SIs, add some global SIs and focus on cloud service providers. What I really need to do is focus on our enablement function. We need to enable and teach our partners how to fish. You’ll see us focus on enablement and TBM. We also have a strong boot-camp focus. We did what many small-to-midsize companies do and took our boot-camp on the road to partners. We’ll now start bringing partners in to run those boot camps, and invite them to work with our customer field sales folks. We’ll make them part of the Apptio family as opposed to merely passing on information.
CP: What percent of sales are done through partners?
Hodges: In aggregate, it’s up to about 30 percent. That’s less in the U.S. and more in EMEA and Asia-Pac.
CP: In the future?
Hodges: It might inch up a little bit but what you might see is a greater differentiation between “net new” and “influence.” What you’ll likely see is a shift from services out to the partner community. Today, we do a big portion of services ourselves; we need to share that with the partner community.
CP: No. 1 goal for the next six months?
Hodges: Wow, there are a lot. If you go out to the partner community, they will say, “Wow, that sales force is super friendly.” But they will also say that our go-to-market [approach] is not so partner-friendly. We have very much today an enterprise-direct sales process, and that needs to change. Having an integrated channel [strategy] that helps reduce our cost of sales, broaden our geographic reach, gain access to relationships, create economies of scale and broaden our base of technology partnerships — that’s what I’ve got to do. I’ve got to get us to a place of global partner friendliness.