Xangati, Seeking Greater Growth, Takes A Major Turn Toward The Channel

Xangati, a Silicon Valley-based developer of workload performance solutions, took a major turn toward the channel Monday, launching a new partner program and setting a goal to focus on indirect sales of its well-regarded cloud intelligence platform.

Through the new Solution Provider Program, called XSP, Xangati looks to recruit VARs, managed service providers and systems integrators that offer customers virtualization technologies and hybrid cloud services, said Atch Frazer, the company's vice president of marketing.

"This really represents a shift in our go-to-market strategy and thinking," Frazer told CRN. "We got to 400-plus customers through a direct, high-touch model. But to scale at speed as a small insurgency player in a mature marketplace, we needed a more channel-friendly approach."

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Xangati's software helps users better predict application performance in complex hybrid environments, and it offers prescriptive recommendations for optimizing cloud-based resources.

The company has often worked in the past with resellers and integrators, but those engagements would typically take the form of one-off fulfillment contracts -- often requested by an enterprise customer that preferred working with a specific solution provider.

The channel approach now being adopted required a major shift in sales strategy.

The first step was moving away from a perpetual pricing format to subscriptions -- a sales methodology traditional solution providers are clamoring for. Another focus was on empowering solution providers to wrap their own services around Xangati's performance management and data analytics platform, Frazer said.

"Virtualization-focused solution providers can start to build services around that platform that are sticky," Frazer told CRN.

Xangati also expects to draw in managed hosting providers as private cloud applications are increasingly migrating to complex hybrid environments using public cloud infrastructure.

The XSP program pretty much got into swing on the first day of work for Lauren Robinette, who came aboard in April as Xangati's director of strategic alliances and channel development.

Since then, Xangati has signed about 10 partners -- some that had worked with their technology in the past, others looking for an entry point into a new market.

Robinette, a channel veteran brought in to guide the new program, said Xangati is looking for companies both with developed virtualization practices -- such as Citrix or VMware partners -- as well those looking to expand their scope.

She told CRN that direct sales staff will work closely with partners, especially when closing deals. Partners can expect to see double-digit margins on those transactions.

"There's no way we can scale without partners," she told CRN.

James Meyers, chief technology officer of Corus360, a Xangati partner based in Norcross, Ga., told CRN the new program will allow his company to better market the Xangati platform and build stronger sales relationships with customers, partly by strategically identifying the right target audience.

"We’re excited about our Xangati relationship, and being part of their new channel program," he told CRN via email. "This new channel program will allow us to become more strategic with one of the most in-depth virtualization monitoring platforms out on the market today."

But not all solution providers are yet clear on exactly what the new channel program will entail or how it will help them drive business.

Jamie Johnson, president of Deltaware Data Solutions, based in the Minneapolis-St. Paul area, told CRN he likes working with Xangati representatives and is a big fan of the product.

But the program is in flux, Johnson said, and he's not sure how realistic Xangati's newly stated channel goals are. He recently expressed those concerns to the company, he said.

In the past, Xangati representatives have been helpful and attentive, but there was no "solid, formulaic approach to the channel," he told CRN.

"They did say they were going to make it more malleable, but I haven’t seen what that means yet," Johnson said.

Frazer said he sees Xangati in "building mode" through the end of the year, and reaping the benefits in scalability sometime in 2016.

"I suspect we'll start to look a lot like the larger enterprises that take 80 to 85 percent of revenue generated by a partner, and 20 to 15 percent of larger deals they take direct. And I think that's our best best way to scale and grow the business," Frazer told CRN.

PUBLISHED JUNE 22, 2015