Cisco's AppDynamics Aims For Midmarket With New 'Pioneer' Designation

AppDynamics is pushing its application performance monitoring platform into the midmarket with an exclusive new program element designed for smaller, regional solution providers, and based on the successful large enterprise-focused Titan partner program.

The Pioneer designation launched today is AppDynamics' response to the success of its Titan enterprise program launched last August, just months after the company was acquired by Cisco. Pioneer will eventually include about 45 regional solution providers with deep expertise in cloud, solid understanding of business applications and a track record of selling complementary technology, said Ghazal Asif, AppDynamics vice president of worldwide channels.

Solution providers that become Pioneer partners get 15 percent guaranteed margins on the resale of AppDynamics licenses, and are also encouraged to sell implementation services that can bring margins between 40 and 60 percent, and take advantage of expansion and consulting opportunities.

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"If I wasn't working at AppDynamics, I'd have my own partner because they are extremely rich margins," Asif said. "AppDynamics is a very good way for partners to grow their Cisco business and add a ton of value for their customers."

AppDynamics has already recruited almost 30 partners into the Pioneer program and is keeping the remaining 15 or so slots open this month to partners that may want to apply.

Since the acquisition, Asif said, AppDynamics R&D spending is up 80 percent. Annual recurring revenue growth has accelerated, and deals in which Cisco is involved have closed 50 percent faster, and some partners say the company is swiftly distinguishing itself from the application performance monitoring market's other major players, including Riverbed, CA and Dynatrace.

"It's great for our partners too," Asif said. "Partners can take this full, end-to-end solution stack story to market, from hardware all the way up to the software layer. It's a huge, huge value-add."

Partners that enter the Pioneer tier are considered "Titans in the making," Asif said, and get a slate of benefits similar to those afforded their larger colleagues. Those benefits include dedicated, hands-on sales and engineering support; enablement content; certifications around services, and help with business planning.

Unlike Titan partners, Pioneer partners won't be required to meet strict revenue requirements in the first year, Asif said. AppDynamics is more interested, at least for the time being, in partners' capabilities and customer profile. Being a Cisco partner is a prerequisite.

"What we're looking for is the profile of the partner," Asif said. "What we've found is that as soon as you put in revenue requirements, it filters out partners that could be really great for our customers, and ultimately we want to help our customers become as great as they can be. Instead, we're looking at technical competencies that partners have, the customers they're speaking to, what kind of problems are they trying to solve, and what are the complementary technologies they're working with today? In year one, we're not asking them to commit to a hard goal."

The Pioneer designation is generating excitement already.

Vinod Muthuswamy, president of Dallas, Texas, solution provider General Datatech, is one of the nearly 30 solution providers who have already become AppDynamics Pioneer partners. AppDynamics makes up only a low single-digit proportion of GDT's business today, but Muthuswamy said he expects that number to hit double digits in the next two years.

The margins on offer to Pioneer partners make developing a deeper relationship with AppDynamics a no-brainer for GDT, Muthuswamy said.

"We're very excited about the margins," he said. "If you really look at the margin profile of solution providers playing in infrastructure space, they are not used to large double-digit margins. When you see an opportunity to create more value, it makes sense and there's no reason why you wouldn't bet on it."

Jumping in with AppDynamics also allows GDT to seize opportunities with customers that are hungry to use the data their businesses produce to make impactful improvements to the way they operate, Muthuswamy said.

"There's a revolution to go all things digital," Muthuswamy said. "Customers want to know how to collect data from aspects of the business that can now generate data, and now they're using that information to make intelligent decisions, to react to the market faster, to improve the customer experience, or the employee experience. They expect you to understand the business and come up with a strategy in a way that allows them to make decisions on a much more aggressive timeline."

"AppD looks at the end-to-end enterprise and maps out where information is flowing and how it impacts the business," Muthuswamy said. "It gives us a platform where we can create our own value. We can create unique insights customers are looking for. Our goal isn't to create the product from the ground up. The data sits on infrastructure, on the app layer, comes in from IoT layer. It's a holistic view of everything digital. You have access to data, and you're using that data to transform the business."

For Joe Wrzosek, practice lead for enterprise monitoring and analytics at Ahead, a Chicago-based VAR and AppDynamics Titan partner, AppDynamics and its partners are in the right place at the right time.

"It's becoming clear to the market that with the complexity of applications, and the speed that development is moving toward taking core business functions and exposing them digitally across the internet to their customers, that tools in the APM space are critical," Wrzosek said.

"You're doing away with day- or week-long war rooms where everyone is pointing fingers at each other," Wrzosek said. "That's not productive anymore. For customers, if it takes more than 10 seconds to load, they're moving on to the next vendor. Now, they can resolve issues quickly and generate a better experience for their customers."