More rebates, higher bar: Palo Alto rewrites partner playbook after decade-long gap

EMEA channel boss Patricia Murphy speaks to Christine Horton for CRN on how Palo Alto has reset its partner playbook with a decade-first overhaul as the CyberArk deal lands

Palo Alto Networks has lifted the lid on its biggest partner programme overhaul in nearly a decade – just as it prepares to fold in its largest-ever acquisition, CyberArk.

Speaking to CRN UK, EMEA channel boss Patricia Murphy positions the revamped NextWave programme, launched last month, as a deliberate reset of how the vendor drives growth through partners.

“The last time we did a major NextWave programme update was in 2016, so this is significant for us,” she says.

“You can really see this as a real step change to where we were before.”

More money on the table – but strings attached

At the centre of the overhaul is Palo Alto is putting more margin into the channel – but the cybersecurity vendor expects more in return.

Murphy says the new rebate structure is designed to reward partners that align tightly with its platform strategy.

“It will be specifically looking at how we can add additional rebate dollars based on their investment in specialisation driving net new logos [and] platformisation and cross sell,” she explains.

The vendor claims the model will “significantly increase the overall earnings” for partners.

But it is also introducing tighter controls over how those earnings are used.

A new Partner Development Fund will require partners to reinvest a portion of rebates back into joint growth.

“We’re going to give you a lot more rebates but we want to take half of that and put it into partner-led innovation or demand gen or skills development,” says Murphy.

Murphy added that Palo Alto is “raising the bar in certain areas in terms of what we expect from being a diamond partner or being an MSSP partner.”

The Palo Alto partner programme - One programme no longer fits all

The revamp also reflects a rethink of how vendors engage increasingly complex partner ecosystems.

Rather than forcing partners into a single framework, Palo Alto has rebuilt NextWave around distinct routes to market.

“For each route to market, you have very specific programmes that are adapted to the type of business that they are building.

“It’s much more custom versus just having one programme and one size fits all,” says Murphy.

That shift mirrors what’s happening inside enterprise accounts, where multiple partners now play different roles across the customer lifecycle.

“In any given account today you’ll have three to six different partners adding value at different areas of the lifecycle,” she explains.

Palo Alto leans into ‘frictionless’ channel model

Alongside financial changes, Palo Alto is also trying to remove operational bottlenecks that have historically slowed partners down.

Murphy says the company is pushing a “frictionless selling” model, giving partners more control over deals.

“Making it much easier to do business with us… they’ll have much more autonomy to grow that business,” she adds.

That includes increased automation and fewer manual approvals.

“We’ll do a lot more auto approval of things like deal submission.”

MSSPs move centre stage in EMEA

If there is one area where the programme overhaul is most targeted, it is managed services.

Murphy says MSSPs are now central to Palo Alto’s growth strategy, particularly in EMEA, where demand is accelerating faster than in North America.

“In EMEA in particular, that business is growing exponentially.”

European customers are increasingly opting to consume security as a service, creating a highly competitive, and lucrative, partner market.

“This is very profitable for partners,” she says.

The result is a land grab across the ecosystem, with telcos, specialist MSSPs and even traditional resellers all moving into services.

“I also see even the value-add resellers getting into the managed service business.”

Palo Alto’s answer is a more structured MSSP programme, including pre-approved pricing and faster routes to market.

Behind the scenes too, the exec says Palo Alto is investing heavily in partner systems and tooling.

“There’s a whole IT organisation focused on the automation piece for our partners,” says Murphy.

CyberArk deal adds identity to Palo Alto

The programme overhaul also lands as Palo Alto integrates its largest-ever acquisition of CyberArk, completed last month, for $25bn (£18.9bn).

Murphy says the vendor will stick to its tried-and-tested “speed boat” approach – allowing CyberArk to operate independently in the short term.

“The identity platform exists as a separate speed boat and will remain that way until it makes sense to integrate them,” she explains.

From a channel perspective, integration is already underway, adds Murphy.

“We wanted them to benefit fully from our new programme.

“About 80 percent of the partners are the same.

“Most of the GSIs are already working with CyberArk extensively.

“They do hundreds of millions of dollars of services.”

The challenge now is aligning those relationships under a unified model.

“How do we leverage the strength of their partnership to fully drive the benefit back to our customers?” highlights Murphy.

And while revenue still matters, the EMEA channel boss makes it clear that capability-building is now just as important.

“Financial objectives [are] one piece of the puzzle. We also are being very prescriptive around where we need them to build capability.”

That includes skills across sales, services and managed operations and other areas critical to scaling a platform-led business.

“We will not scale if we try to do this all by ourselves.”

What comes next?

Murphy says the February overhaul is unlikely to be a one-off. Palo Alto is already working on further updates, particularly around MSSP pricing, GSI engagement and specialisation.

“We’ll continue to invest in predictable pricing models for MSSP providers,” she says.

The vendor is also sharpening its focus on the midmarket, working with distributors to expand beyond its traditional enterprise stronghold.

“Historically, we’ve started up market, and now we’re looking to go down market,” says Murphy.

With more automation, more programme tweaks and a major acquisition still bedding in, partners should expect more changes.

“Watch for future updates,” she explains.

“There’s a lot going on.”