Red Hat Eyes Ways To ‘100 Percent Partner-Led Drive’ In Automation, App Modernization

Red Hat partner program changes allow partners “to move seamlessly between different activities and different routes to market,” Channel Chief Stefanie Chiras tells CRN.

Red Hat’s recent and upcoming partner program changes are just the start for the vendor as it eyes an “ecosystem-driven go-to-market” with enterprise and commercial customers and ways to reach “100 percent partner-led drive and partner profitability around” automation, application modernization and other areas of the business.

Part of the partner program changes include deal registration consistencies rolling out worldwide this quarter and next, Stefanie Chiras, channel chief of the Raleigh, N.C.-based IBM subsidiary and open source enterprise tools vendor, told CRN in an interview. A new program framework is slated for the second half of 2024. And Red Hat has launched an invite-only partner practice accelerator for solution providers with advanced technical knowledge.

“Previously, the partner program experience was quite linear,” said Chiras – whose official title is senior vice president of partner ecosystem success. “So now we're implementing a new framework. It's based upon what we're terming ‘modules’ that promote greater flexibility, choice and transparency for partners. But really, it allows them to move seamlessly between different activities and different routes to market.”

Red Hat Partner Program

Phil Walker, CEO of Manhattan Beach, Calif.-based Red Hat partner Network Solutions Provider – a member of CRN’s 2023 MSP500 – told CRN in an interview that he is tripling down on the Red Hat OpenShift practice.

He said Red Hat investing in more use cases around the internet of things (IoT) and operational technology (OT) would unlock more opportunities for his practice.

Red Hat provides a “very good neutral tech stack” and serves as “the middle ground between mid-market and enterprise in terms of middleware and access to data information,” Walker said.

About 80 percent of Red Hat’s revenue comes from solution providers, according to CRN’s 2023 Channel Chiefs.

Armonk, N.Y.-based IBM has about 55,000 worldwide channel partners, 12,000 in North America, according to CRN’s 2023 Channel Chiefs. The vendor makes about 30 percent of its revenue from the channel.

Chiras called the partner ecosystem a strategic pillar Red Hat is focused on continuing to develop over the next two to three years. Some of her goals include sustainable growth in the cloud, intentional go-to-market activities with partners in the cloud, getting closer to IT distributors for scale, more depth and breadth with distribution partners to scale in the channel

“It's about simplicity at the top front, and underneath that simplicity, it's about consistency and transparency and clarity,” Chiras said. “That's really what we're heading into here.”

Here’s what else Chiras had to say to CRN.

How do the Red Hat accelerator, product demo platform and other announcements this month fit with your partner strategy?

This announcement really aligns to the vision that we've been stating around Red Hat's ecosystem as part of our four strategic pillars that we've been focused on … for the next two to three years. … First is about sustainable growth in the cloud and driving intentional go-to-market activities with partners in the cloud.

Second is really pivoting distribution for scale and broadening the depth and breadth of the skills with our distribution partners to help us further scale out with the channel – and partnering with them in order to do that.

Third is about co-creation. … And really doing that with aligned routes to market. And specifically we've seen some examples of that with our OEM (original equipment manufacturer) partners to deepen integrated offerings– things like Dell Apex Cloud Platform for OpenShift.

And really we're looking to expand with more embedded models. … The fourth pillar of our focus areas is about transforming programs. … How do we engage with our partners? … If I look at the key tenants in that space, it's about simplicity at the top front, and underneath that simplicity, it's about consistency and transparency and clarity. That's really what we're heading into here.

Which Red Hat partner program updates would you like to call out?

New partner engagement models and talking about a program framework that incentivizes all partner types, all selling motions. And really to focus on efficiently using our investment into tools like MDF (market development funds) in order to drive business growth, both for Red Hat and for our partners.

We maintain very strongly that our goal here in the Red Hat ecosystem is to really build, connect and catalyze that coalition of experts, that ecosystem of partners, so that together we can build those customer-relevant solutions, which incorporate Red Hat technologies, but they're bigger than that. They really reach the customer outcome piece. … (The updated program strategy) will help us engage, as I said, simply and transparently.

It will help us deliver jointly with partners those co-created solutions with the go-to-market – and incentivize both.

We have spent the last two years really doing a lot of foundational work and investing. … We'll be implementing as part of that engagement model a new program framework which we will be rolling out in phases in 2024.

What’s different about the Red Hat partner strategy?

Previously, the partner program experience was quite linear based with Red Hat. And it was based upon partner identity and geography of where we worked with them. While partners could participate in more than one route, interconnection between those roads if they had different engagement models with us was a bit clunky and not very simple.

Now we're implementing a new framework. It's based upon what we're terming ‘modules’ that promote greater flexibility, choice and transparency for partners. But really, it allows them to move seamlessly between different activities and different routes to market.

It gets rid of that old structure around partner type, and it allows them to engage in activities and motions that are relevant to their business and build upon those collectively to work with us within the program.

It'll provide a standardized approach for partners to engage with Red Hat across all the multiple motions. But all of that activity then feeds into a common tiering system so that they can be recognized holistically for the full scope of their activities with Red Hat, no matter how they dock in.

The globally consistent program framework is focused on recognizing partners capabilities. So it moves away from tiering up by partner type individually into a method where based upon the partner go-to-market motions activities, it does become cumulative across all of those different ways that they engage with us or with Red Hat technology.

This will be supported by updated incentives and rebates for partners based upon program participation. And we're adding some simplicity into certain components. So we're streamlining the deal registration process to be more globally consistent … and that'll help increase the partner autonomy, which has been a big focus for us and promote greater visibility for partners on sales opportunities.

What should Red Hat partners know about the accelerator program?

This is a key new component, part of the engagement model. And it's designed to enable leading services partners particularly focused in the commercial segment, that sector, and position and help position them firmly as experts in each stage of a customer lifecycle.

So we're inviting partners who have demonstrated a proven track record of success with deep commitment into growing their practices in Red Hat. And they have a leading role in guiding customers to architect, implement and configure solutions.We'll be working with them, but … they've already achieved these professional service credentials.

And we want to really help work with them so that they can continue to advance their level of business acumen with customers side-by-side with us. And it provides Red Hat sellers a real way to identify this community of partners that are trusted, that they can lean on for this validated services skills. … We're supporting them to build up that comprehensive way to engage and recognizing them for building that skill.

So the way that it's different from what we've done in the past – we are now aligning with how partners go to market, focusing on the customer success. Specifically, we're working this to help them build up skills in automation and application modernization as the focus areas for this. … We want to highlight them and lean on them as we go to market and really focus on getting to this place where we are supporting 100 percent partner-led drive and partner profitability around the services.

How do we help them create that capability? And then how do we support them in the go-to-market in order to leverage that capability?

What changes would you point partners to in enabling and training?

We've made a concerted effort as you've seen over the past year to improve our enablement and training offerings to partners, particularly through the Red Hat partner training portal and via the Red Hat ecosystem catalog. A couple of things that folks will see are upgraded credential and certification pathways. They've been consolidated and simplified to align to the journeys of partners.

The Red Hat ecosystem catalog now includes co-created solutions … We're heading into multi-partner solutions as well. That's been a focus for us. Ansible content collections are now added as well to make sure that that's getting visibility – both to partners but also to customers. … We're introducing Red Hat demo platform, which offers partners a platform for on-demand product demonstrations.

It includes step-by-step instructions and talking points for when they're facing customers. So it comes in as a comprehensive platform both to show the technology but also how to talk and communicate that technology.

So the platform includes multi-product demos, access to hands-on labs and fully scripted workshops that the partners can leverage and … express how they can help with delivering one- and two-day experiences with the customers and simplify for the training and the work they have to do in order to get ready for that.

Partners will also get early access to demos for product releases ahead of the general availability. And Red Hat demo platform will be available in May. … It's another way that we're working to provide simplified access and a way to support our partners to have a simplified presentation as they talk to their customer and … build that trust with the customers.

What prompted some of these changes?

From a market perspective and from our partner perspective, they are engaging with our technology in different ways.

If you look across build, sell and service (models), we have partners now who are working across multiple of those engagement models.

And the way of looking at partner types and having those be separate really is not relevant in the world today because partner skills and capabilities are broadening.

The way that they go-to-market with customers and how they want to deliver value – they want flexibility and how they deliver that value. And we want to support them in that.

So one of the big things in this program framework is stepping away from any sort of partner types, allowing them from an activities way to engage in the way that they want to engage with Red Hat in all those activities and recognizing them right for the holistic value that that brings.

What are some of your 2024 goals as channel chief?

We will be focused on working hard with distribution in order to work with our channel. … And leveraging that channel in all the ways that we go-to-market, including cloud and cloud marketplace. … We are working in 2024 to really get an understanding of – who are those partners who are willing to lean in with us in the strategic ways we're going to market? And how do we prioritize investing with them?

And we're very eager to work with those partners who – their strategy is aligned with us, their way that they deliver value is aligned with us. And how do we get better visibility through the tooling to those partners who are leaning in with us so we can lean in with them? … The segmentation model with enterprise and commercial, that allows us to to segment into that commercial model, where we're really going to lean in with an ecosystem-driven go-to-market.

And by having that segment parsed out like that, it allows us to lean in, invest in that space, and align to that strategy of being ecosystem-driven in that segment. … The distributor has that knowledge of, OK, if this is with an independent software vendor and Red Hat, who in their value-added resellers has those skills, is aligned to those two? How do we then provide the demos, the kit, the collateral, the tooling with that play?

I am very eager to make these multi-partner solutions land into the distributor, have the distributor help us identify who are the right resellers to get that into the hands of because they have the right customer focus, they have the right skill set already.

To me this multi-partner solution, this distributor play is a big focus for us in that area, because they can take the simplicity of those built partners that we work with, get that into the hands of the right partners. … That's one place where I'd say, partners, look to your distributors. Make sure they understand where is your focus, where is your strategy, so they can get you those right plays and those right kits into your hands for your customers.

And certainly, we are looking for scale and we're looking for our distributors to help us scale into those spaces that perhaps Red Hat is not focused on.

What do you see as big opportunities for partners in 2024?

I'm more than ever convinced of the open hybrid cloud strategy that Red Hat has been on. In 2024, we will see it be far more intentional.

That's what I'm seeing – much more intention of what goes on-prem. Much more intentional about what goes out at the edge. … because we've just matured. The customer side has matured. The partners have matured in that knowledge base. … The second piece, of course, is AI is real. … How do we all implement it? And how do we get it inserted into the right spots?

The thing I love about AI is it is comprehensive across the whole stack. It's everything from the application to the model to the tools to the infrastructure to the accelerators that you use. … It pulls together all the different partner spaces to get together to drive a solution. … We're going to see really exciting uses of AI across all the different spaces from edge to cloud to all over.

Are you seeing more repatriation to on-premises?

We're seeing much more intentionality, with some pull back onto on-premises. But it's not just on-premises. It's a private cloud experience in my data center.

That's the evolution. … Cloud is not a place, it's an experience. And now we're seeing people want to leverage that experience all over and see the value of getting that experience on premises for all sorts of reasons – using the procurement experience of marketplaces and other things for their cloud experience in the public clouds (for example).

But I am seeing from customers much more use of all of the different spots in hybrid cloud. And honestly, I think they're gonna look to partners to provide them guidance on how and where to do that. And not only for planning purposes, but for day one, and then day two. … Cost, security and data, those are probably the three (reasons for hybrid cloud) that I hear the most.