Rackspace VP: Partners Should Share More Customer Data

Channel partners need to be more courageous in sharing customer information with cloud and hosting providers, according to Rackspace's technology vice president, but partners fear sharing customer information will impact account control.

In an interview with CRN, John Igoe, the new vice president of technology at Rackspace, a San Antonio, Texas-based hosting provider that offers its services through both direct sales and channels, urged channel partners to become more open with cloud providers and other allies whom he believes can help maximize the odds of a sale through combined efforts.

"In the past, the channel viewed suppliers as people who provided products that they could then take to the end user," he said. "But I think we're seeing a new model emerge where it's best to approach the customer jointly in order to cover all the necessary bases, and differentiate [their combined value proposition]. The channel is always very reluctant to do that because they are concerned about the vendor taking control of the partner."

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That recommendation did not sit well with Phil Mogavero, vice president of advanced technology solutions at PCM, a Calabasas, Calif.-based solution provider, who expressed concern that today's ally can often become tomorrow's competitor.

"The customer belongs to the channel partner, and those relationships are really the most important long-term value we have," Mogavero told CRN. "Giving that information to people who might someday become competitors is a potential threat to our organization. Once you have a great relationship, you end up turning information over in order to use deal registration and similar programs. But, you want to make sure that the other company doesn't have a history of taking deals direct, and doesn't plan to do so in the future."

Meanwhile, Jack Gerbs, president of Quanexus, Inc., a Daytona, Ohio-based solution provider, is conflicted about Igoe's recommendation.

"I agree that we need to get over our concerns about sharing the customer in order to better present the value, but it is extremely dangerous," he said. "The fundamental relationship is with our clients. But, the cloud is here to stay, and we need to choose our cloud providers carefully because few companies our size are going to be able to stand up their own cloud. This means we end up with co-ownership of the client. I don't like exposing the customer information because if the relationship with the cloud provider deteriorates, you could find yourself getting poached."

NEXT: An Alternative Approach

Rackspace's Igoe counters that the respective skill sets of the partners are far more complementary than they are competitive, and suggests that different areas of expertise need to come together in order to reach the buy decision. He says customers are coming to both Rackspace and its partners, looking for answers about how to migrate towards, and use, the cloud.

"The channel's role is to be the trusted advisor," Igoe said. "Rackspace has a lot of direct customers, but we are also seeing channel partners come to us who want to team with us, and work with us. We will jointly be a trusted advisor to that end user in those engagements. It's important to provide a variety of options for that end user, and I think that's going to continue as time goes on. Part of this is due to regionally based issues. We are delivering our services around the world. In order to do that, we obviously look to the channel for a variety of capabilities, especially in those regions where we do not have extensive resources. And, OpenStack is a valuable alternative for our partners."

According to Chris Mullins, business development director for Alert Logic, a Houston-based MSP, OpenStack represents a solid technology option that many players in the channel choose to pursue.

"OpenStack represents the best non-Microsoft, non-Amazon, non-VMware approach to the cloud," he said. "OpenStack will be one of those platforms that people will select, especially if they're wary [of the proprietary offerings], and the client will likely continue to need skilled help to support the integration."

The fact that OpenStack is actively engaged by multiple industry players is bound to lead to a certain amount of confusion and uncertainty, given the absence of unified road maps and strategies that partners have come to expect when dealing with vendors on an individual basis.

"The rate of innovation can be a little bit overwhelming for people," conceded Igoe. "So the channel needs to leverage their primary skills in conjunction with third-party offerings in order to achieve stability for their business. Partners should start with an assessment of their core value. Are they a software development house? Are they cloud experts? Are they experts in deployment and professional services? Once they grapple with those questions they can develop an analysis of how to work with the cloud. The ability of the IT channel to adopt new industry trends is a good way for partners to differentiate themselves."

At the end of the day, such differentiation will likely be the best opportunity for channel partners to prosper. But many partners will find themselves walking a fine line that balances partnerships with account control.

"It's a double-edged sword," summarized Quanexus' Gerbs. "I can't tell what will be the future of the channel. I believe self-service model is going to become easier to deploy over time. The way we're going to succeed is to move up the food chain and be more of a strategy partner."

PUBLISH MAY 29, 2013