Alkira Channel Chief On Record-Breaking Growth As Demand For AI-Ready Networking Infrastructure Surges

‘We’re getting more ubiquitous adoption because [partners’] customers are asking them about us, and that’s exciting. I think our partners are starting to get paid more money, [and] that will help accelerate the journey for sure,’ says Doug Houghton, director of channels.


Network Infrastructure-as-a-Service specialist Alkira is seeing its business grow like a weed, and the company’s channel ecosystem has been a driving force as businesses turn to their trusted advisers for agile, AI-powered networking solutions.

In fact, San Jose, Calif.-based Alkira had a record-breaking fiscal year, complete with 255 percent year- over-year growth in channel annual contract value and more than half of its global partners actively contributing to new opportunities. According to Alkira’s director of channels, Doug Houghton, the company’s success can be attributed to Alkira’s commitment to being 100 percent partner-led with no direct sales, the upstart’s aggressive global expansion and businesses looking for a different approach to networking.

Network infrastructure demands are changing. Alkira emerged from stealth mode five years ago with its consumption-based Cloud Services Exchange (CSX), a unified, on-demand offering that lets cloud architects and network engineers build and deploy a multi-cloud network in minutes. Its approach to networking is growing in popularity, and channel partners are increasingly displacing legacy networking hardware providers as businesses big and small seek out more agile and scalable networking offerings, according to Alkira.

In a recent interview with CRN, Houghton spoke with CRN to talk about what is driving the startup’s impressive growth, macroeconomic factors that are impacting the networking space, and his plans for partners. What follows are excerpts from the conversation.

How are channel partners contributing to Alkira’s record growth?

Let’s start with some data [because] it’s compelling. The channel last year brought us 72 percent of our new logos, which I thought was pretty good. The rest of those were developed by our direct sales staff but still obviously matriculated into a partner’s hands ultimately. It was a fantastic year for the channel. We had a nice mix of partners. We’ve got [about] 130 partners globally now, and we had contributions from about 60 percent of those partners, which I was surprised by. And there’s nothing special about this. We pay for those opportunities, and we pay handsomely. They’re taking 20 percent margin on new deals, expansion deals, and on renewal transactions as well. That’s maybe not so usual in the SaaS space, at least the networking infrastructure on demand space, so that was pretty cool. We’ve also shortened our sales cycle. We’re [about] two and a half months faster than the direct model. Our typical sales cycle is anywhere from six to nine months. But when a partner brings us [an opportunity], it’s a qualified opportunity already, and we just pass go, we collect our $200 really fast, and then we move toward the brass tacks, which is, ‘Hey, let’s get this into production as quickly as possible.’ So we’ve noticed the differentiation in how fast we can recognize revenue when a partner brings us the opportunity.

We doubled revenue [Fiscal Year] 2024 to 2025, [and] partner growth led 72 percent of that. We released a couple of new components to the solution last year, from the Zero-Trust network access, and the F5 load balancer, ingress and egress for multi-cloud. Those helped drive business and became of interest to new partners as well. Now, we’re [also] seeing more play on the global backbone as a service [offering], and our partners have taken that message to market and we see, again, deal cycles decreasing, which is exciting, and more upside in China and in other markets.

Tell us about Alkira’s global expansion strategy.

We opened Canada last year. We opened China and Australia, and we’ve got multiple deals in China now with customers who are accessing the rest of world from their manufacturing facilities in China through our service. In Canada, we’ve got kind of a value-added distribution model that’s working quite well, where they’re finding partners with customers, and then we have a two-tier arrangement, which is nice because these [partners] are old Rogers [Communications] guys, and they seem to know everybody. It’s not yet a market where I can afford head count, but it’s quickly getting there so I’ve incorporated that as a tool to get to market in Canada.

We’ve seen good growth around the world, [and] we’ve [grown] through partners. Last year was a big year for the channel, and I expect the same contribution, or at least to be within 2 or 3 points of the same contribution that we did last year.

How is Alkira’s presence on cloud marketplaces contributing to the company’s record growth?

In terms of growth, we did see and continue to see marketplace consumption because our customers want to retire their EDPs [Enterprise Discount Programs]. Last year we added Google, so we’re in three marketplaces: the GCP [Google Cloud Platform] Marketplace, [Microsoft] Azure Marketplace [and] the AWS Marketplace. One of our competitors, who shall remain nameless, has started sort of taking business direct through the marketplace. But that’s problematic in my view,because it doesn’t retain your credibility. You’re not really 100 percent channel. Cloud service providers are my partners. But when we do private offers or deals come in through a marketplace, we’ll pay commission in both instances. [If] it transacted through the marketplace through a consulting partner, private offer or multi-party private offer, or Google resale, we’re going to pay, and the cloud service provider makes it really easy for us to extend commissions to those partners. In the event that it’s a private offer but it doesn't have a consulting partner associated with it, we pay on the back end, and we’re really transparent about that too. We want to make sure that our partners know we’re not trying to get one over on them and squeeze them on margin. We want everybody to make money, and that’s how we set it up. So it continues to be this engine of growth.

Are you seeing an impact from tariffs in your business as Alkira expands globally?

We’re cautious, and we’re being optimistic and opportunistic. The three heavyweights—Cisco, Juniper, HPE—have facilities both in mainland China and in Taiwan so you can expect delays and more expensive component parts. Does it provide an opening for a service like ours? Absolutely, because our value proposition isn’t necessarily tied to a piece of hardware or some sort of transport so those component parts aren’t getting more expensive for us. But the cloud service providers also buy Cisco, Juniper and HPE, and those component parts will ultimately probably be more expensive on refresh to those cloud service providers. ... So right now, it’s an opportunity for us to distinguish ourselves. We’re seeing a lot of growth of that use case I mentioned—the global backbone as a service—where [a customer] is going to recycle a Cisco Catalyst router that they have and they’re just going to use our network to connect all of their various bits across their corporate network. So, for now, it’s a great opportunity for us to win.

What are the next steps that Alkira is taking with its partners?

I expect to double revenue again. I think what’s next for the Alkira partners, they are in the process of catching fire a little bit. Our partners are starting to get paid. It’s really interesting when you start a channel, especially like this one. Everybody is really happy for that $87 first commission that they earned on the first $1,000 commit. But everything grows remarkably. We’re getting more ubiquitous adoption because [partners’] customers are asking them about us, and that’s exciting. I think our partners are starting to get paid more money [and] that will help accelerate the journey for sure. We have customers in every vertical now. And was I surprised? Yes. Huge. We’ve got two Fortune 10s right now that we’re about to close, but we’re still getting ... the really small guys that say. ‘I have a labor problem. I got multi-cloud and I’m cloud-native. But my guy just left.’

We [also] just introduced a midmarket team. We define that as 2,500 seats or less, and that is fairly new—less than six months old. The channel has been instrumental in identifying opportunities there. We’re calling into the midmarket at Trace3, Presidio and CDW and [partners] like that, and building those relationships on behalf of the midmarket team as well to drive more growth and more run rate for our channel. It’s been good. When you move into the midmarket, [customers] are not always as sophisticated, but they have the same issues, especially if they’re multi-cloud and they want to consolidate services and they’ve got compliance and regulatory obligations. I expect this year we’ll see a bunch of midmarket growth to include inside of SLED.

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