McAfee boosts deal registration margins

LAS VEGAS – McAfee (NYSE: MFE) unveiled its game changing DeepSafe technology at its Focus conferences, but worldwide channel chief Alex Thurber stole some of the thunder from that announcement by offering 25 per cent margins for channel partners on its revamped deal registration program.

Most deal registration programs offer between 10 to 15 per cent margins on registered deals. Thurber told a group of channel partners at the Partner Summit area of Focus that DeepSafe marks the dawning of a new era of security and the channel program needed to adapt and capitalize on this new security technology.

Since Thurber became worldwide channel chief in 2009, he and his channel team have been working on building a solid foundation of solution providers. Currently, McAfee has 451 Elite partners on its top tier and 22,931 associate partners at its bottom level.

The next step he said was to usher in a channel culture based on partner profitability.

“Partner profitability is McAfee’s first principal. Does our technology drive your profitability? McAfee has made the largest investment in its channel in the company’s history (highlighted by the 25 per cent deal registration margin),” he said.The strategy with this margin increase was to help solution providers protect deals and help them develop new customers. “We wanted to put in a rich deal registration program and now we have 25 per cent additional margin on top of your standard margin,” Thurber added.

Also the new deal registration program will have a 48 hour response time on large deals.

ACE Program

Thurber did not stop at 25 per cent margins on deal registration. The former Cisco executive announced several more channel program enhancements starting with the ACE program. The Accredited Channel Engineer (ACE) program will now be available to all parts of the world. ACE provides solution providers with high pre-sales certification support, access to McAfee’s sales team and exclusive resources along with double McAfee rewards. But Thurber cautioned that ACE will not be easy and will take classroom work along with proof of concepts. McAfee wants channel partners to work with customers and be shadowed by a McAfee security engineer. The goal for Thurber is for every channel partner to have at least one ACE engineer on staff.

Post Sales Support

Thurber also made a promise not to hiring any people for post sales support nor will he invest in a call centre. “At the end of the day call centres can’t scale so we are not doing it even if we wanted to.” That led Thurber to announce the McAfee Authorized Support Provider program. This program has been piloted with eight solution providers worldwide and those partners have seen on average a 43 per cent increase in bookings because of the new program. This program for now will only be available for Elite McAfee partners and the security vendor wants a revenue investment from the solution provider to join. That partner must also have a case tracking system and replication lab. “Think about the competitive advantage this program gives you. You will be able to maintain intimate relationships in post sales and they will be calling on you first and this will lead to increased margins because of the higher retention,” he said.

Monthly re-occurring revenue streams

For those solution providers wonder what ever happened to the MXLogic acquisition? Thurber said that the $21 billion market in Security-as-a-Service that MXLogic pioneered was the biggest reason why McAfee acquired them back in 2009.

McAfee has been working on taking the best practices of MXLogic’s channel program and integrating those into McAfee’s channel program. With that Thurber announced a Monthly SAAS Specialization program aimed mainly for the SMB market. McAfee is working with Ingram Micro and Tech Data as the only two distributors for this program to take care of just the billing process, while McAfee provides the service and the channel partners is expected to sell. The Monthly SAAS Specialization program will be rolled out in the U.S. first.

Thurber told CDN that it is expected to come to Canada but first the company has to figure out if Ingram Canada and Tech Data Canada are capable of handling the billing. The program will them be rolled out to EMEA and then AsiaPac.

Thurber also talked about market segmentation with the channel partners at the event. McAfee has divided into high touch enterprise accounts that will still be handled by channel partners, SMB which is 250 users businesses or less and the commercial segment which is in the middle.

SMB Specialization

He announced an SMB Specialization program for the 1,000 or more partners who resell McAfee products in the small to mid-size business customers.

This program will also have a deal registration component with 25 per cent margins, but with four day approvals. This program will have a special incentive of a $20,000 vacation of a lifetime grand prize.

Managed Services

Thurber told the 650 solution providers at the Focus Partner Summit that the biggest upside in the marketplace today s in alternative delivery models – meaning managed services.According to Thurber, Managed Services is a $16.8 billion business today and growing at 17.5 per cent annually. “I have challenged my team on this. I dared them to double the managed security business in the next six months,” he said.

The Managed Services Provider program has been designed to address the unique needs of service providers with two top levels (Elite and Premier). This area will have the ability for partners to push their brand powered by McAfee with detailed training and centralized management. “This program is tricky because it requires investment and requires a higher booking goal on technical and sales resources. And, we shall work together on a joint business plan,” he said.

Social media and e-learning

McAfee transitioned from two to one learning system for solution providers. This E-Learning system is credit-based with improved search and partners will now be able to register for live events. Partners can earn credits that will help them recertify themselves, Thurber said.He also announced Star Track, a three-day intense training course that is taught in a two-way interactive way where the student gets a change to teach the class.

Also Thurber extended all certification renewals by a year. “Our overall strategy is about driving mutual profitability and growth with the channel, while working on a simple market model built on relationship with you instead of sales transactions.” Communication was another area Thurber addressed here at the Focus Partner Summit. He said McAfee will re-establish town hall partner meetings. The first will be held on Oct. 27. These town halls will be video taped and posted online.Thurber also said he was “sticking his neck out and promised a total overhaul of the partner portal by the next Partner Summit. The new partner portal will have optimize search and tailored communication for solution providers and available in multiple languages.

Finally, he urged all partners to use social media a way to give feedback to the McAfee channel team.

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Jim Love, Chief Content Officer, IT World Canada

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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