Citrix Overhauls Channel Program, Increases Sales Requirements For Top Partners

Citrix Systems Wednesday unveiled a significant overhaul of its partner program, which it says is motivated by the changing economics of cloud computing and Software-as-a-Service revenue flowing through the channel.

As a result of the overhaul, Citrix Gold and Platinum partners will have to sell a lot more than they've sold in the past to retain their status in the vendor's channel program. Citrix is also introducing deal registration for its NetScaler cloud networking product, but some partners are wary of the change because it modifies the way they're getting paid for selling the product.

These moves are part of Citrix's broader campaign to focus more on higher-value partners. Last November, several partners told CRN that Citrix had been taking over enterprise and midmarket accounts as part of its so-called "High Touch" program, which launched in January 2012. That caused partners to miss out on renewals and maintenance money despite having done the legwork of bringing in customers.

As part of the new changes, Citrix is adding an incentive called Opportunity Registration for partners that procure its NetScaler cloud networking product through distribution, Tom Flink, vice president of worldwide channels and market development at Citrix, said Tuesday in an interview.

Depending on their level in Citrix's channel program, partners will have a chance to earn up-front discounts of up to 10 percent when they register NetScaler deals, Flink said. Citrix is offering the incentive because of the highly competitive nature of networking hardware deals, which rival vendors have been known to poach.

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"We believe the time it takes to close deals, and the procurement cycles involved in larger accounts, opens the door for more competitors to enter the picture as you move through the buying cycle," Flink said. Citrix wants to give a leg up to partners that can sell and influence deals in this space, he said.

While Citrix is pitching Opportunity Registration as an incentive, not all partners see it that way.

"One thing that makes me nervous is that Citrix is telling customers that starting May 1, all quotes that have been made to customers are invalid," one Citrix partner, who requested anonymity because he's not authorized to speak about internal company matters, told CRN.

"Not sure why they would do this unless they're taking the margin out of that 10 percent or using this as a mechanism to lower the street price. This has the potential to result in good things, but we'll have to see how it gets applied," said the source.

Citrix is also increasing the certification and revenue requirements for Gold- and Platinum-level partners in its Solution Advisor program. In return, Citrix is doing away with its previous invitation-only policy for granting partners entry to the Gold and Platinum levels, Flink said.

Starting May 1, Gold partners will have to sell a minimum of $850,000 of Citrix products annually (based on MSRP) to retain their status. Previously, their minimum revenue requirement was $225,000.

Platinum partners, whose minimum revenue requirement used to be spelled out in their individual agreement with Citrix, will now have to sell $3.5 million annually. Silver partners previously had to hit a $40,000 annual sales target, but Citrix is now letting them keep this status regardless of how much they sell.

NEXT: Citrix Alters Policy For Solution Advisor Program

Also changing is how Citrix grants partners access to the Solution Advisor program. In the past, entry to the Gold and Platinum levels was by invitation only, meaning that once partners hit their revenue targets, they'd still have to apply to Citrix for membership to these levels, and not everyone was accepted.

Now Citrix is providing partners with "an objective set of criteria" for gaining access to Gold and Platinum levels, according to Flink, who described the changes as "exciting and dramatic."

Citrix is also changing its Advisor Rewards program, which determines the back-end rebates partners get for the role they play in deals, whether it's selling products or services directly or influencing their sale through third parties.

Flink said Citrix is increasing its rewards for Platinum partners but maintaining the same level for Gold partners. It's also reducing its rewards for Silver partners "just slightly," though this is balanced by the fact that partners will no longer have to hit a revenue target, Flink said.

The exact amount Citrix pays partners depends on what kind of licensing agreement they have with the vendor. But for Citrix's "shrink-wrap" products, the reward would come in the form of a 12 percent rebate for Platinum partners, a 10 percent rebate for Gold partners and an 8 percent rebate for Silver partners, Flink said.

Citrix is also preparing to launch a new partner program, called the Citrix SaaS Advisor, for partners that sell SaaS offerings such as GoToMeeting, GoToMyPC, Podio, GoToAssist and ShareFile. Flink said the program, slated to be rolled out in the coming months, will consolidate the resale and referral rewards some Citrix partners are already getting today.

"Partners who join as SaaS advisors can go to distribution and buy and resell our products, or sign up directly with Citrix and get rewards for referring customers," Flink said.

PUBLISHED MAY 1, 2013