Channel Out, Partner 'Ecosystem' In as Zscaler Pursues Growth

Zscaler is adopting a new partner strategy as it enters its next phase of growth. As part of its evolution, the cybersecurity vendor is looking beyond the channel, instead adopting a "partner ecosystem" approach.

Blanca Galletero, VP partners and alliances EMEA, Zscaler, revealed the change of course at the company’s European version of Zenith Live in The Hague, Netherlands, this week. (Channel Futures was there.) There, she said the company is relying on partners to help it pursue exponential growth.

As such, Galletero revealed the company is evolving from bidirectional to multidimensional relationships with partners.

“We believe the ecosystem approach is one that maximizes return on investment on value generation for the customer. If we have happy customers, we’ll have more business,” she told Channel Futures.

As part of the partner ecosystem approach, Zscaler is encouraging partners to work together on customer projects. Research by Channel Futures’ sister company, Canalys, estimates that medium-size companies today work on average with seven partners.

Said Galletero: “We now have a stage in the sales methodology where we proactively have the conversation with the customer: ‘Hey, Mr. Customer, let’s discuss about what is the ecosystem around your project, which is going to maximize success for you.’”

Related:Partner Program Updates at Dell, 8x8, VMware, Others

Removing Internal Friction from Partner Value Chain

The company has already adapted its partner program to recognize different partners’ efforts in any collaboration.

Zscaler's Bianca Galletero

“Instead of creating value chains which are only bidirectional, we recognize value and recognise partners even if they’re in multidirectional chains. We are trying to remove internal friction about who gets recognition for what,” said Galletero. “The main purpose here is value creation for the customer, and to make sure that each part of the chain of the ecosystem gets recognized for it.”

Similarly, the security company now is creating a single SKU for ecosystem approaches, which includes the likes of technology alliances with CrowdStrike, AWS and Okta.

“We come together, we create a single SKU and we make it easier for our customers,” said Galletero. “Therefore, all the out of the box integration is not really required because now we are all deeply integrated. This is about having a single SKU, having a way in which we basically make it easier for the customer to justify the investment internally.”

Partner Ecosystem: Shorter Sales Cycles, Bigger Opportunities

While partners may assume that the sales cycle is longer, or their slice of the pie is smaller in partner ecosystem deals, Galletero maintained that the opposite is true.

Related:Zscaler Beefs Up SASE with Airgap Networks Buy

“It’s not the case,” she said. “We see that the sales cycle is shorter and the opportunity size is bigger. This is because we are taking away some of the extra work that is required so customers can focus on, ‘How we are going to say this to the board?’ Those are the use cases. This is the business value assessment that we have jointly produced for the customer. So we can also demonstrate how this contributes to the transformation journey that the customer is executing.”

Zscaler also is moving away from transactional deals to instead encourage partners to focus on customer success.

“Of course, margins are very valuable,” said Galletero. “But the total addressable market from a margin point of view is approximately $10 billion worldwide. The serviceable market for our platform is approximately $80 billion. So if we put those two together, we are expanding the way that we partner to create profitability for our partners. Because we want them to take the margins, but we also want them to take the services. And by taking the services at the same time, we are going to be securing the success of our customer projects. This is about customer success.”

Better Alignment Between Direct Sales and Partners

Zscaler most recently posted 48% year-over-year revenue growth, with an annual run rate of more than $2 billion. Its platform secures more than 40 million users, including 40% of the Fortune 500. Galletero suggests 30-40% of Zscaler’s revenue is led or sourced by partners.

The vendor is in 23 countries across EMEA. Across the region, Zscaler is investing in its partnerships. 2025 will see the vendor aligning its partners more closely to its direct sales organization “to make sure that we have a perfect fit,” said Galletero.

“We have teams that are in charge of taking the strategy, creating assets, campaigns, which later are going to be executed by our regional teams. So we are making sure that every part of the territory does have somebody which is going to be able to represent all the different partnerships, channels alliances, which in the past was not the case," she said.

“In the past, we were inheriting a model in which if I was managing GSIs, I am managing GSIs. If I am managing distribution, I am managing distribution. So, we still have subject matter experts, but now in the region we have at least one person who is the single point of contact for anything alliances, partnerships, ecosystem-related," she continued. "Because we are trying to simplify the interaction and the impact that we are making.”