Cloud Software Group to Revamp, Unify Partner Programs, Starting with Citrix
Citrix layoff news is dominating the headlines, but the new head of CSG's global channels says its commercial business will be 100% channel.
January 11, 2023
![diversity problem_making puzzle pieces fit diversity problem_making puzzle pieces fit](https://eu-images.contentstack.com/v3/assets/blt10e444bce2d36aa8/bltb5f93c5f6a44b521/652409f824235e5c432d1be5/Diversity-problem_making-puzzle-pieces-fit.jpg?width=700&auto=webp&quality=80&disable=upscale)
Sjutterstock
Channel Futures: Citrix and Tibco are not companies that you would normally expect to see in the same room, so to speak. So, how are you rationalizing these parings to customers and to the channel?
Cloud Software Group’s Ethan Fitzsimons: It’s really about providing a unified engagement model. And for us, it’s all about becoming simpler. There were some complexities that were built in from for various reasons.
CF: What is the road to that unified experience?
EF: The first piece of that is the introduction of the new partner program. The legacy Citrix business grew pretty complex to work with. We received feedback from partners all the time. They said, “You’re too hard to work with and you need a Ph.D. in channel programs to understand how and when we make money.”
CF: And what did you do to address that?
EF: We’ve combined all of the pieces of our various resale programs. We had multiple flavors of resale programs based on partner type, or geography. That’s now all consolidated under a single program. And then we’re segmenting that by customer type and partner type underneath. Rather than have multiple flavors of program guides, multiple flavors of program rules, it’s one consolidated set based on who you are as a partner, who you’re engaging with as a customer and the value you’re providing in that equation. From a resale standpoint, it’s one program.
CF: How does that impact managed service providers?
EF: We have a really strong managed service provider program, that frankly, we’re leaving alone. We feel like it’s functioning very well. The feedback that we get from partners is positive, and internally, it is working well. So basically, we have these dual pillars of the program.
CF: How will this affect Tibco partners?
EF: We’re not doing that today; we want to get the platform set, make those changes first and get that settled. And we’ll be doing a migration of all partners into the single contract vehicle single program later on in the year.
CF: How fragmented was the legacy Citrix partner program from your point of view?
EF: It could be pretty fragmented. It varied a lot by who you were working with, and how you were working with them. An SI would have one program, a LAR would have a slightly different program, a traditional reseller would fall under our CSA [Citrix Solution Advisor] program. It caused complications between our folks and partners. And sometimes even within the partner based on the motion, where there just wasn’t predictability. They didn’t go into engagement with the customer and know what they were eligible to earn.
For us, it’s really about making that clear, in real time at the time of a quote, and then empowering the partner to manage that profitability moving forward from there.
CF: The other big complaint was, of course, as you alluded, that there was channel conflict with the Citrix sellers. How are you addressing that?
EF: I think things have improved quite a bit from a conflict standpoint. You’re going to have some of that at times. But when you look at the new program, we’re segmenting our customers in two clear segments. Our segmentation will result in a smaller number of customers than we’ve previously had in our enterprise space. Then everything outside of that enterprise space will be what we consider a commercial customer account.
And that business is 100% channel. It had been heavily channel in the past but was not 100% channel. And that’s really the mode for us. All new business that we run through that segment will all be partner-driven, and partner-led, and it’ll be a channel motion, through and through. And that’s a change from what we’ve done in the past. I think the partners are definitely going to see benefit in that. And it’s a core tenant of the program as well, in that they make an incremental discount on every deal that they do in that space immediately.
CF: When the new program launches, what will change?
EF: For the enterprise space, we’re continuing to make sure that we’re aligned properly with our partners and the partners are still going to be just as important as ever in that space. But delineating specifically that a large portion — the vast majority of our business is 100% channel — is a key value to eliminate any doubt or any variance in anybody’s mind. Where a deal might land or who it might go through is now one uniform motion.
We have changed the customer segmentation. There will probably be fewer customers that are under enterprise than there were in the past, where we had different flavors of enterprise, commercial and midmarket. Today, there will be two, it’s enterprise and commercial. And the number of customers in that enterprise segment will be less than it historically has been, from a Citrix perspective.
CF: How much less?
EF: Significantly less. I can’t share a definitive number, but it is a notable difference. And partners will be able to notice it. And I think they already are as we start to look at some of their accounts and talk through it.
CF: Is there a way for those partners that are working with enterprises in some way to ensure that you can deal with whatever conflict may arise there?
EF: Absolutely. And one of the key pillars in the program is really two things. One is protecting the partners that are most invested in us as a company, and are most invested in the accounts, and then really driving that focus and reward the return on investment for partners in the commercial space. One of the things that you’ll see in the new program is a deep discount for deal registrations. And there’s going to be a tremendous focus among our field sellers and our partner managers to make sure that those partners are involved early and often, in qualifying for deal regs in that the right partner is rewarded.
CF: How will that work?
EF: As an example, partners can earn up to a 16% discount, and in most cases, it will be 16% of the incremental discount for deal reg, but then no other partner can touch. They have that from a protection standpoint.
CF: Are you developing a new deal registration engine?
EF: We are. It will be an evolution of what we’ve done in the past, but it won’t be one in the same. In the past, the closest thing that we had to a traditional deal reg program was what we call Spark. But we also had another flavor — back to the complexity that we call Drive. Spark was for opportunity identification. And Drive was more for sales support. The new deal registration platform will consolidate them. And again, for simplicity, just one program, one registration. And we’ve greatly improved as well the automation of approvals tremendously. And that’s something we’re focused on again, just to drive simplicity and speed.
CF: As a public company, Citrix was constantly under pressure to move more cloud business, more recurring revenue, but for the way Citrix compensated partners, it wasn’t always to their advantage to do promote that shift. How are you addressing that now?
EF: There’s a lot to that. I don’t think that was necessarily a Citrix move. I think the ecosystem is moving to a recurring revenue cloud-based model. And one of the dynamics that has changed in the last 12-18 months is partner models have evolved into that as well. So, we’re getting partners pulling us along as much as we are encouraging them. You’re certainly going to see a focus from us around ARR and recurring revenue.
CF: What kind of activity do you expect to see this year in terms of customers either staying with the on-premises hosted model or moving more aggressively to the cloud or shifting to a hybrid mix?
EF: This is my personal belief, but I think where many customers are landing is in some flavor of hybrid. And I think folks have become much more adept at looking at use cases and [finding] what’s right for what they’re trying to accomplish with this initiative. And sometimes it’s a mix of what’s right for that within a specific initiative, which leads you to the hybrid. But some applications are going to run better in the cloud. And some, whether it’s security concerns or connectivity issues, may need to be closer to home and on prem, which is why I think you see a lot of people landing in that hybrid model.
CF: What kind of lift are you getting from Microsoft’s Azure Virtual Desktop and Windows 365 these days?
EF: Microsoft is a longtime strategic partner — a tremendous number of our core partners are also partnered with Microsoft. I think we’re becoming more effective in working with them, specifically from an Azure standpoint. From a technology standpoint, there’s a tremendous number of complementary pieces. And then from a go-to-market and a business standpoint, I feel like we’ve improved our alignment. When you think about those specific strategic things, every day we’re focused on improving our engagement with the Azure Marketplace. And that’s an area we’ve seen customers ask for. We continue to invest in that to make that experience better for customers and partners. And that would be an area I think … is paying dividends, where we focused, and it continues to improve.
(Photo courtesy Koshiro K/Shutterstock)
CF: Have you put in any kind of mechanism for partners when customers use the cloud marketplaces?
EF: Historically, we have had a mechanism for partners; obviously, everyone is trying to solve this. Some are doing it better than others. We’ve had functionality for partners to make money through our Drive incentive through marketplaces, along with anything that they aren’t from the hyperscalers. And now we’re working directly with AWS, Google and Microsoft all in new iterations of what that looks like going to market with them. Some of those are going to be closely aligned to our new program launch that haven’t been announced yet, but we’re closely working with them around the next evolution.
CF: What kind of changes in terms of incentives will partners see as a program rolls out?
EF: If you’re going to transact an order, whether it’s a renewal, new business, transition from renewal to cloud, whatever that may be, there’s a baseline 5%. We will look at the partners that have the capabilities to best serve customers together. We are making the deep investments to make sure they get the return that warrants the continuation of those investments. We built into the program an accelerator for our GSIs and our platinum partners. The platinum partners are going to be our top partners globally. They earn 10% or 8%, respectively, of additional discount on any new business, or transitionary business that they do with us. It’s automatically applied. So stackable on top of that 5%.
And then the next piece is the deal reg. For all customer accounts, whether they’re enterprise or commercial, if they have the deal registration on an opportunity, there’s an additional 8% front end discount, regardless of customer type. When you move down to the bottom tier, these are for commercial accounts only, but they’re stackable in addition to the discounts above. All of the discounts above continue to apply. And then additionally, for new business there’s an automatic 10% of additional discount applied to all partner new business — for all partner types working in a commercial account.
We really wanted to make sure that the partners that are heavily engaged in an account that are doing the work with us in an account are rewarded for that and limiting competition between partners. We want healthy competition in terms of driving value; we don’t want competition within an account to erode profitability or erode the customer experience. So there’s an additional 8% for deal reg, for commercial. That’s a total of 16% for commercial partners.
CF: How will you be providing these incentives?
EF: In the past, when we’ve tried to roll up promos or incentives, sometimes we were a little slow to be able to execute based on systems challenges, and so forth. We’ve actually built in a component in the system with the new program, where essentially at the flip of a switch, we can turn on a new incentive for whatever the behaviors we’re trying to drive, whether it’s deals of a certain ilk, specific product set, license type, whatever that may be, we can hit that systemically and provide an additional discount within the parameters of that promotion.
The secondary piece is we focus tremendously on transactional activity as an industry, growing up as a as a salesperson — nine times out of 10 times that’s how you’re getting paid, you have to close the deal. That’s a little bit of the DNA that most of us have in the system. But I think one thing that’s lost in that transactional activity is what’s being done to support the customer, and support the customer success, because if that customer is not having a great experience, they’re not coming back for the next set of new business and expanding their licenses.
Over the last several years, we’ve put a lot of effort around what we call our PCSM program. That stands for partner customer success manager. We have a specific rebate designed to incentivize those partners. We have a pool of partners who are part of this program that continues to grow, and it’s become very well established. They are able to earn the rebate incentive is based on customer utilization. So, if their customer utilizes 60%, or more of their license for three consecutive months, and they’re using the product, to us that indicates success. And we’re rewarding those PCSM partners specifically for that, especially in the commercial customer segment. For the vast majority of our customer base, that’s where those folks are focused today.
CF: What kind of changes in terms of incentives will partners see as a program rolls out?
EF: If you’re going to transact an order, whether it’s a renewal, new business, transition from renewal to cloud, whatever that may be, there’s a baseline 5%. We will look at the partners that have the capabilities to best serve customers together. We are making the deep investments to make sure they get the return that warrants the continuation of those investments. We built into the program an accelerator for our GSIs and our platinum partners. The platinum partners are going to be our top partners globally. They earn 10% or 8%, respectively, of additional discount on any new business, or transitionary business that they do with us. It’s automatically applied. So stackable on top of that 5%.
And then the next piece is the deal reg. For all customer accounts, whether they’re enterprise or commercial, if they have the deal registration on an opportunity, there’s an additional 8% front end discount, regardless of customer type. When you move down to the bottom tier, these are for commercial accounts only, but they’re stackable in addition to the discounts above. All of the discounts above continue to apply. And then additionally, for new business there’s an automatic 10% of additional discount applied to all partner new business — for all partner types working in a commercial account.
We really wanted to make sure that the partners that are heavily engaged in an account that are doing the work with us in an account are rewarded for that and limiting competition between partners. We want healthy competition in terms of driving value; we don’t want competition within an account to erode profitability or erode the customer experience. So there’s an additional 8% for deal reg, for commercial. That’s a total of 16% for commercial partners.
CF: How will you be providing these incentives?
EF: In the past, when we’ve tried to roll up promos or incentives, sometimes we were a little slow to be able to execute based on systems challenges, and so forth. We’ve actually built in a component in the system with the new program, where essentially at the flip of a switch, we can turn on a new incentive for whatever the behaviors we’re trying to drive, whether it’s deals of a certain ilk, specific product set, license type, whatever that may be, we can hit that systemically and provide an additional discount within the parameters of that promotion.
The secondary piece is we focus tremendously on transactional activity as an industry, growing up as a as a salesperson — nine times out of 10 times that’s how you’re getting paid, you have to close the deal. That’s a little bit of the DNA that most of us have in the system. But I think one thing that’s lost in that transactional activity is what’s being done to support the customer, and support the customer success, because if that customer is not having a great experience, they’re not coming back for the next set of new business and expanding their licenses.
Over the last several years, we’ve put a lot of effort around what we call our PCSM program. That stands for partner customer success manager. We have a specific rebate designed to incentivize those partners. We have a pool of partners who are part of this program that continues to grow, and it’s become very well established. They are able to earn the rebate incentive is based on customer utilization. So, if their customer utilizes 60%, or more of their license for three consecutive months, and they’re using the product, to us that indicates success. And we’re rewarding those PCSM partners specifically for that, especially in the commercial customer segment. For the vast majority of our customer base, that’s where those folks are focused today.
Layoffs at Citrix dominate the company’s headlines Wednesday, but the company and its parent also have significant partner program news. Cloud Software Group (CSG) plans to implement a common channel program across its various holdings, starting with Citrix. Citrix partners will transition into the new partner program on March 6, led by head of global channels Ethan Fitzsimons.
Cloud Software Group’s Ethan Fitzsimons
CSG has tapped Fitzsimons, who joined Citrix in early 2020, to form and lead the new global partner program. Ultimately, the program will serve the companies that make up the new CSG portfolio. Besides Citrix, CSG’s holdings include NetScaler, Tibco and Information Builders.
Private equity firms Vista Equity Partners and Evergreen Coast Capital formed CSG on the heels of its $16.5 billion acquisition of Citrix. Fitzsimons joined Citrix as managing director for worldwide distribution, and later became COO of worldwide partner sales and ecosystems. Before joining Citrix, Fitzsimons provided strategic business development for Logicalis US. Fitzsimons spent a decade working for two distributors: Tech Data and Avnet.
Citrix was without a dedicated channel leader since the last year’s departure of Mark Palomba. Palomba had only held that role for only six months. Chief customer officer Hector Lima was tasked with overseeing the company’s partner sales. Lima announced the new program last week.
Citrix’s Hector Lima
“Based on the feedback of many of our partners worldwide, this new program is designed to bring great predictability, profitability and joint success for Cloud Software Group partners,” Lima wrote. “It dramatically simplifies our channel approach to drive better transparency and efficiency for our partners and ensure we are rewarding those partners most invested in the success of our joint customers.”
Later this year, CSG will bring its other holding companies including Tibco, into the program. Fitzsimons, CSG’s new head of global channels, discussed the new program with Channel Futures. Echoing Lima’s statement, Fitzsimons said partners will see more consistency from the company.
Commercial Sales Now 100% Partner-Led
The new program classifies customers into two categories: commercial and enterprise. While the Citrix sales force will continue to target enterprises, the company will classify a fewer number of those customers as enterprises. Citrix will classify all other customers as commercial, 100% of sales will go through channels.
“It had been heavily channel in the past, but was not 100% channel,” Fitzsimons said. “And that’s really the mode for us. All new business that we run through that segment will all be partner-driven, and partner-led, and it’ll be a channel motion, through and through. And that’s a change from what we’ve done in the past. I think the partners are definitely going to see benefit in that.”
Excerpts from our interview with Fitzsimons appear in the slideshow above.
Want to contact the author directly about this story? Have ideas for a follow-up article? Email Jeffrey Schwartz or connect with him on LinkedIn. |
About the Author(s)
You May Also Like