Egress Makes Rapid Shift to 100% Channel Sales

Email security firm Egress is on course to make the switch from direct to 100% channel sales in 2024.

A renewed focus on channel over the past 12 months has seen the U.K.-based vendor grow partner-generated revenues by 220%. Its MSP program has seen a year-over-year revenue increase of more than 400%.

While Egress has existed for more than 10 years, this is the first time it is committing to an indirect sales model. In the U.K. this has propelled it from 15% channel sales to 80%.

Come January, that will become 100% channel, said Dan Hoy, director of strategic partnerships at Egress.

“We’ve rapidly flipped the business in terms of being predominantly a direct business to being a completely channel-orientated business,” he said.

'Carrot And Stick' Needed for Switch to Channel Sales

Hoy said making the transition from direct to channel sales has involved “a bit of carrot and a bit of stick” internally. The company is compensating internal sales teams for handing business over to partners — but that is just temporary.

Egress' Dan Hoy

“There is education for sellers who have traditionally been direct, to understand the value,” said Hoy. “Because they’re looking at their margins and they're [saying], ‘I’m giving away business; what’s the value in it?’ So, we internally are heavily incentivizing the team initially this year to accelerate that, to drive the right outcomes.

“When we get to next year, some of that incentivization will go away. The rules will be the rules in terms of, we’re 100% channel. But what has changed is the education and the understanding of the stakeholders on the value that true partnership brings. And suddenly an understanding that by working with a trusted partner, it isn’t about giving away 10% fulfilment on a deal that you’ve generated. It’s about building that relationship with that partner salesperson and what they’re bringing to the table to add value to what you’re doing.”

Disruption In Email Security Market

Egress tackles inbound and outbound risks around email. They include advanced phishing attacks, business email compromise and social engineered email attacks.

“Businesses have never felt so vulnerable to attack. There’s disruption in the market because Microsoft 365 has come in as potentially an alternative from an email security perspective. [This] has disrupted the traditional secure email gateway players, the Mimecasts, the Proofpoints, the Barracudas. There’s that disruption in the market and a lot of customers know that email security isn’t a ticking-the-box exercise. This has real ramifications if you get it wrong.

“What partners like about our product is that we can answer multiple use cases. And the value and the return on investment is very demonstrable.”

Expansion In U.S., Australia

Building on partner momentum, Egress has expanded to the U.S., and more recently, Australia. The U.S. is following a similar trajectory to being channel-first, with plans next year for Egress to be a channel sales business in the U.S.

“As a business we have always recognized that the potential and the scalability of the channel. But the market conditions now lend themselves much more to that channel investment. And actually, our product fit is a better product for channel businesses as well,” said Hoy.

“We haven’t hit the ceiling of partner growth in the U.K. onboarding partners … and we mirror that in North America.”

Growing Managed Services Business

2024 will also see a greater focus on growing the managed services part of the business, said Hoy.

“We’re not one of those vendors that [call itself an] MSP, but in reality, everything’s been backed off to our engineers. We’re delivering products that our partners can manage, install, offer support, the full autonomy that an MSP wants. That is an area of growth that will ramp significantly next year,” he said.

“That is going to be continuing to accelerate both partner growth but also the scalability of the business. I think we are the only vendor offering that is an advanced inbound and outbound, fully outsourced managed service that partners can deliver to their customers.”