F5 Networks Eases Transition to Software Company with Program Updates

F5 Networks says it has updated its Unity+ channel program to give greater levels of discount and margin to partners.

The changes are in response to partner feedback, said F5’s director of channels and alliances for the U.K. and Ireland.

F5 Networks’ Neill Burton

“Partners were asking for greater rewards, based on certain investments they’re making because their customers are driving them that way,” said Neill Burton. “For example, the move from physical to virtual, then virtual to cloud journey, was missing from our previous Unity program.”

F5 has increased margins, discounts and the profit that partners can make selling things like enterprise license agreements (ELAs), subscriptions and utility licencing schemes.

“Our partners are educating us that customers want to buy ELAs that don’t tie them down to a specific architecture. For us, it allows us to have a multiyear relationship with a customer’s transformation journey, as opposed to rocking up every year and doing a technology refresh.”

The company has also started to offer rebates for the first time.

“We’re a rebate company now, and we never used to be at all,” said Burton. “Frontline margins and backend rebates were introduced, tiered on the things that are important to both F5 and the partners, and what the customers are asking the partners for.”

F5 is also making it more lucrative for partners to bring in opportunities.

“Partner-initiated opportunities are much more profitable that just transacting F5-generated opportunities,” said Burton. “They’re getting 40% discount on partner-initiated business. In that way, it makes F5 a much more relevant vendor in quite a crowded security market.”

Traditional Partners Struggle

At the heart of these changes is the fact that F5 is a company in transition. F5’s CEO and president, François Locoh-Donou, on Monday reiterated the company’s move to a more software-driven business ahead of its second quarter earnings call. On the call he noted strong demand in subscriptions, security and technology from its 2019 acquisition of NGINX.

Burton, however, noted that some partners have struggled with the company’s transition to a software model.

“Our trajectory is based on cloud enablement, secure cloud architectures, and helping customers with an application digital transformation journey. It is less about pure play security. That has challenged traditional partners, which have been very infrastructure-based.

“Going forward, the market is consuming our solutions via Amazon or Azure, consuming our solutions as a service, as opposed to capex procurement. I’m seeing our partners having to evolve with that,” he said.

This friction between traditional infrastructure partners and the demands being placed on them by the customer is highlighted by F5’s acquisition of web server NGINX. F5 snapped up the open source application delivery specialist for $670 million last year.

Burton notes DevOps is outside the comfort zone of many traditional F5 partners, prompting a new recruitment campaign.

“Most of my traditional partners were infrastructure partners. And with a few exceptions, [they] didn’t have anything to say in the DevOps space. So, the first thing I found with the acquisition is I needed to look for new, different partners.

“I’m hungry for more partners in the DevOps space. These are typically professional services companies. They’re not people that typically sell product, because most of the product that’s used at that end is open source.”

Last December, F5 announced it was acquiring Shape Security, a provider of app security and fraud prevention solutions, for $1 billion.

About 95% of F5’s sales go through the channel, with between 400 and 500 partners in the U.K.