ESET Channel Chief: We Have Closed ‘Thousands And Thousands’ Of Competitive Buyout Deals

‘The intent of the program is for the customer to take advantage of [ESET] technology and take advantage of the program with their partner,’ says Ryan Grant, ESET’s vice president of sales and head of channels in North America.

ESET has bought out “thousands and thousands” of contracts of rival vendors worth millions of dollars over the past nine months as part of its unique competitive buyout program, Ryan Grant, vice president of sales and head of channels in North America, told CRN.

ESET, the Bratislava, Slovakia-based security company with regional offices around the world, has had global buyout contract programs in the past but in March began covering small security contracts with as few as five seats, down from its previous 50-seat minimum.

The new five-seat minimum has proven to be a “tremendous success” in luring new customers to ESET, he said.

“The threshold of starting with five seats is pretty unique,” said Grant, who joined ESET late year from Ingram Micro to help build up ESET’s channel business. “The intent of the program is for the customer to take advantage of [ESET] technology and take advantage of the program with their partner.”

Grant said many customers are reluctant to switch to new security products and services if they still have a binding contract with another vendor.

But ESET, via its buyout program, will offer to pay off the remainder of a contract if a customer agrees to try out an ESET product.

“We’ll buy out for up to one year of a contract,” said Grant.

Tthe average size of an SMB buyout deal ranges from 250 to 500 seats, according to Grant, who added that there are also. “quite a few” enterprise deals involving more than 1,000 seats.

The value of contracts being bought out can range from $5,000 to millions of dollars, he said.

ESET has more than 400,000 customers worldwide. The company also has 10,000 partners worldwide, 4,500 of them in North America.

ESET’s channel partners are big winners in buyout deals since they eliminate a key obstacle that sometimes occurs when selling new products to customers, Grant said.

ESET’s buyout program, which is one of a number of incentive deals the company offers, is due to expire on Dec. 31 and the company is weighing whether to extend it, Grant said. Among other things, the company needs to fully assess the program’s overall costs and benefits, as well as get feedback from partners and customers.

Alex Beel, a sales manager at NH&A , a Juno Beach, Fla.-based ESET partner, said the previous buyback program, with the higher 50-seat threshold, generated about 10 deals for NH&A.

But the new program, with the five-seat threshold, has already generated 20 deals for the company since it began.

“This new program has been working out great,” said Beel.

Buyout negotiations typically start with talks with customers about older security offerings that need to be replaced, such as anti-virus products, he said.

“Once they switch over, they see [ESET’s] other high-value products,” Beel said. “The buyout kind of gets them in the door.”

Geoffrey James, president of Mill River Technology, Stamford, Conn., said the ESET buyout program makes it easier for customers to switch over to ESET offerings.

He noted one of Mill River Technology’s customers, a regional bank with hundreds of seats, recently used a buyout deal to switch to a “$30,000 product opportunity.”

“We‘ve displaced many different competitors,” said Ryan. “There’s not one specific one. A lot of it has to do with what the clients’ needs are and us trying to solve those needs with our product portfolio.”