Palo Alto Networks: A Next Generation Channel


Far too often disruptive technology startups put so much time into the engineering of the product that
when it comes time to develop a channel strategy it is nothing more than an afterthought.

It's ironic, given the fact that it is often not the best technology that wins out, but the best
sales and marketing strategy. In the case of Palo Alto Networks, the pioneer of the highly
disruptive next-generation firewalls that are reshaping the network security market, the company
has put as much thought into its channel sales model as its technology.

Palo Alto Networks, in fact, was built from the ground up as a 100 percent channel sales company.
And its top-notch channel sales team has made sure that its sales model is just as disruptive as
its next-generation firewall.

[Related: Palo Alto Networks CEO: 12 Reasons We're Set To Soar In 2014]

Early on, Palo Alto Networks made a conscious decision to go long and deep with a select group of
Navy-Seal-like security experts that are deeply embedded into every nook and cranny of the Santa
Clara, Calif.-based company. The Palo Alto Networks' channel partners, in fact, are treated like
they are part of the company. That means they go to market in a very disruptive fashion with the
company using its own innovative software tools.

The company's Pulse partner tool provides business planning in a box, measuring partner bookings,
profitability, enablement activities, marketing activities, pipeline conversion, and, most
importantly, sales goals. And its Tracker tool, aimed at getting partners to reach the highest
levels of the partner program, provides a single-pane-of-glass view of exactly where the partner
stands relative to other partners in every critical area including performance.

Those home-grown tools are just one of the reasons that of the top 150 partners attending the
company's recent partner conference, 141 doubled their sales in the last year. Think of it: An
amazing 94 percent of partner conference attendees doubled their sales. That doubling of sales
each year is only the start. The true genius of the sales model is that once a customer has
bought the box, they keep adding new subscription security services at a rapid clip, including
the new WildFire subscription service. For Palo Alto Networks security partners, the box has
become the ultimate recurring revenue game-changer, with the average customer purchasing 5.4
times more software services over a multiyear period.

What's exciting about the Palo Alto Networks model is the company is upping its game adding new
channel talent like 15-year channel veteran Ron Myers; security sales guru Vince Massey; and
highly regarded sales leader John Spiliotis. That channel talent adds to an already strong team
of Tracy Pallas, vice president of channels and distribution, and Donna St. John, head of
worldwide channel marketing and partner programs.

The Palo Alto Networks channel team is not just checking off the boxes building a me-too program.
It is determined to disrupt the market with a next-generation channel. That's paying off in
record-breaking sales for the company and its partners.

BackTalk: Steve Burke writes a monthly opinion column on CRN.com. You can
reach him via email at sburke@thechannelcompany.com.

PUBLISHED NOV. 26, 2013