Palo Alto EMEA boss says vendor will not adopt a direct strategy
VP of EMEA says certain customers will buy direct due to pre-existing agreements with acquired businesses
Palo Alto Networks has no plans to take its core product set direct, according to EMEA channel boss Mike Herman.
Speaking to CRN, Herman (pictured) said any perception that Palo Alto Networks is developing new commercial models with direct strategies is off the mark.
He explained that only a small subset of software products will be available direct due to pre-existing agreements they had with companies acquired by Palo Alto.
"All of our core Palo Alto Networks product set is sold through our business partners, and we have no plans to change that, that I know of anyway, and I'm very much involved in discussions," he explained to CRN.
"Products that we acquire can have a different route to market - these would only be software products, by the way - and customers that have a significant install base that they've acquired through a portal of some kind through pre-acquisition.
"We are going to continue to allow those customers to procure the licensing through a portal, but we're not preventing the channel from also participating in that.
"So if the customer says, ‘I don't want to buy directly from a portal' - whether that's from a public cloud provider or vendor - we want to continue to leverage the supply agreements that we've got with our large system integration partners or resellers, then we allow them to do that. So we don't mandate it one way or the other."
Herman added that this is not likely to change in the long term, claiming that as the company continues to grow at an average of 30 per cent quarter on quarter, it presents an increasingly huge financial opportunity for partners.
He also claimed that partners were told that Palo Alto could develop its own portal for certain customers to buy direct but that partners would be given a referral fee in such a scenario, as well as the opportunity to add services to it.
"We told our partners 18 months ago that this is what we may need to do if we continue to make acquisitions," he stated.
"Some of our large global accounts, which have some professional procurement departments, would like to acquire some of the technology through a portal because they believe that - although it's not always true - their acquisition costs would be cheaper.
"If a customer says, ‘I want to continue acquiring my software licences through a portal from you guys', we don't have one today so they can't do it today. We will develop it in the future, but it will be for a small cross-section of technologies," he said.
"If they want to buy through a public cloud provider's portal, they can do that as well. But we will compensate our channel partners through a referral fee scheme to make sure that they still earn margin from any technology that we fulfil that way, and then they provide all the support on top."
Herman explained that this decision comes as a result of the M&A flurry it has undertaken in recent years.
"When we make acquisitions, the routes to market for those technologies is not always the same as we have at Palo Alto; they come with different distributors and often a different reseller base," he added.
"We really need to ask ‘What's the best way for us to go to market? Do we continue with the distributors, [as] they've got the skills and capabilities? Or do we consolidate our distribution base around the bigger ones that we use today, who we know have lots of capability, and retrain them?' Which is our preferred route, because we get economies of scale doing that.
"Whenever we make an acquisition, whenever we look from a channel perspective as to how we go to market, we do try to consolidate around their existing partners that are in the partner programme, which we believe are a fantastic community of partners."