Transcript
I appreciate you're all incredibly busy, so taking the time to join us today is very much appreciated. As Daniela said, my name is John Bartholomew, I'm the head of global channel at Enable. I've been here for eight months. I'm really excited to have this opportunity today to update you on what is one of the key initiatives at Enable as we evolve our organization from what I think historically has predominantly been a focus on that MSP landscape to actually start to engage with the mid-market end-user base via resellers. Just before we start, I think it's good for me to point out that this isn't going to be any, there aren't going to be any updates around that MSP program through this call. We're not going to be talking about our existing MSP program or indeed any changes to that program. We really are here to talk about how we're building a world-class reseller, partner program and go-to-market strategy engagement that we can compete on a global level. This is really the first step in informing you of what we've built and what we're doing to evolve what we've already established in North America. There will, of course, be more questions at the end of this. We're not going to have the answers to all your questions. I've only got an hour and there's a huge amount to cover, but as Daniela said, please do post your questions in the chat. We ran a similar session for our EMEA distributors earlier on today. We've got lots of questions from that and off that and this call, we will create a FAQ that we will share with all of you to make sure that all of your questions, if not answered today, will be answered. What I want to do today is just, first of all, take you through the journey that Enable have been on, mainly focusing on why. Why we've decided that today we want to go and work with resellers to engage with the mid-market. It's an important step for Enable and a process that's been in the making for a long time. Secondly, I want to talk about why it is we believe that now is the right time to do this and certainly now is the right time to significantly increase our investment in this. Then I will get into the details of our new global partner program and then all of the backend systems, the portals that we've built, just to give you an indication of how we're going to support your resellers, your customers, as they engage with us on this journey. First of all, I think most of you hopefully know who Enable are. If you've been working with us for a while, you'll know that we are an organization that is predominantly known in the market as an organization that reaches the end user via MSPs. In fact, we've done a very good job of that. We effectively work with 25,000 or in excess of 25,000 MSPs today. We're managing, I got an updated number yesterday from our CFO, we're managing roughly 9 million endpoints globally. We've got a lot of customers and a lot of end users that are trusting us, a lot of MSPs that trust us. The very fact that we've engaged those end customers via MSPs just shows that we have that linearity. We have that exposure to working in channel. That's what we've been doing for 20 years. As I said, we've done a relatively good job of that. Certainly in the last five years, we've evolved as an organization that engage very well with our MSPs. However, we understand that the market has changed. About three years ago, a few things started to really point us in the direction that we needed to evolve significantly in engaging with the mid-market. This isn't a instead of program. We're not moving away from our focus. We're not moving away from our investment in MSPs, far from it. In fact, we continue to invest significantly in resource, time, marketing funds, and everything that we do with our distributors within that MSP space. About three years ago, we started to get feedback from our MSPs and from some of our distributors who were spreading or feeding back the feedback they'd had from their MSPs that they wanted the opportunity to have a resale motion with Enable. In us not offering that, they were having to go and talk to our competition. In some instances, probably some of your competitors as well, where Enable simply didn't offer that ability for an end-user to purchase the technology themselves. Again, those MSPs were feeding back that some of their larger customers, specifically larger customers, those that we would define as probably mid-market to enterprise, were not always buying a managed service. They wanted to own some of that technology themselves. They wanted to manage it themselves. We decided in North America to start a very base-level partner program and a partner engagement and start allocating some resources to that. Over the last three years, that has been incredibly successful for Enable. Incredibly successful, actually, so much so that a year after that, we started to employ that same principle in our DAC region, the Switzerland, Austria, Germany region in Europe. Then last year, the organization, Enable, decided that we were now going to invest significantly in this, and we wanted to build a program and a team and a back-end support infrastructure that would allow partners to really have a much, much better and more efficient experience with us that ultimately would improve the customer experience. I joined, as I said earlier on, eight months ago in September, and my task was to take everything we'd already done, start to look at the market, and build a program and a team that would allow us to massively accelerate the growth that we've seen so far in that reseller world, but also make sure that we had a proposition that would be attractive to resellers and make the lives of us and also our distributors easier to go and position that with resellers so that those resellers could then have an easier task of positioning that with their customers. Then at the end of last year, another very important milestone happened in our history. We acquired an organization called AdLumen, and this was an incredibly exciting step forward for Enable because not only did it increase our ability to execute in channel in North America, but it also accelerated our desire to be a cyber security vendor, and in fact, more than be a cyber security vendor with our technology stack, and I'll talk about this later, offer a cyber resilience story, which is one of the hottest topics in the market today. The other reason, of course, is that the total addressable market in that mid-market space is so much larger than it is in the MSP space, and it's in an area that Enable hasn't properly really played in, and it's something that we identify as a miss for us. If we look at the analysts' reviews of the three specific technology areas we perform in and we play in, we operate in, unified endpoint management, which is what we're best known for, the data protection element, which is something that we've been involved in for a number of years, and then more recently, that cyber security space, we can see that there are some data points that really help us understand why it's so important we go and talk to resellers to engage with mid-market customers. First of all, in data protection specifically, the total addressable market is double in the reseller world what it is working with MSPs, and even if we just focus on 60% of that space, which is in the mid-market space, the area that Enable will predominantly focus in, organizations of between 100 employees and 5,000 employees, that space is still worth more than the total addressable market for MSPs. And then in cyber security, there has been an incredible shift. There are so many organizations now positioning cyber security. When I started in this industry back in 1997, there were only a handful of organizations and end-users could then talk to those organizations and understand what the security risk was, threats were, and understand how to find a solution to that. Today, the market is incredibly crowded and end-users are increasingly becoming more and more frustrated and concerned and confused about what technologies they should employ, where they should get those technologies from. They're now looking at resellers more than ever as trusted advisors, those organizations that are supporting end-users on multiple solutions and asking them which technologies, which solutions they should engage with. So it's vitally important that Enable are in that environment, are talking to resellers and making them aware of who we are and what we do, and that we're not just an organization that engages the end-user via the MSP. So that's why we decided, why Enable decided that we wanted to engage resellers. It's also important to point out why we believe that now is the right time and that resellers will want to come and talk to Enable, because as I said, it is a crowded marketplace. We are another vendor that want to go and engage with those resellers. I fully understand that as distributors, you have a finite resource as well. You can't position every single vendor and every single partner. So there has to be an argument as to why Enable and why not. This is primarily based on the feedback that we are receiving from the resellers that we've engaged with in Europe and those that we're engaging with in North America. Right now, I feel that there are two choices for them. The first choice is they engage with the larger... Excuse me. Didn't expect to sneeze on a webinar. The first is that they can work with those larger, more established vendors. I'm sure you all know who they are in the cybersecurity and the backup and data protection space. Those organizations have significant resources. They have the support infrastructure, the maturity of back-end systems that make sure that your partner's experience is good and your experience is good. Ultimately, the customer experience is efficient and excellent. But more recently, they've been very focused on their customer base, making sure they retain that customer base. That, of course, is where partners see the least profitability. Partners see most profitability when they're engaging with vendors in that new customer acquisition and that expand area. What we've also seen, and I'm sure some of you have seen this as well, is for those vendors that had incumbency programs, those incumbency programs have seen a significant reduction in the level of margin or partner discount being offered to those resellers. In some instances, those incumbency programs have been removed in their entirety. It comes at the same time that a quarter ago, last quarter, Canalys, who are an independent analyst organization, I'm sure many of you have heard of them, did a survey with resellers globally. One of the questions they asked resellers, one of the main questions they asked is, what is your biggest complaint about vendors today? The answer from most resellers was they didn't believe that vendors appreciated they'd managed the lifecycle of the customer. If you think about that, at a time when partners are feeling that vendors don't appreciate that, vendors are also reducing or removing incumbency programs. At the same time, as those organizations grow, as those vendors grow, it becomes very difficult to manage the execution around the partner program, which means that even at NCA and expand opportunities, resellers are not necessarily retaining the level of profitability they should be and they need to. The other opportunity is to work with smaller companies, those startup organizations, organizations that we would argue are the lifeblood of the channel in our industry. Those organizations have limited resources, however, they don't necessarily have that level of maturity that we have seen in those larger organizations. At the same time, many are involved in funding cycles, which means they don't necessarily have that consistency in the teams that are engaging with resellers and customers in the field, therefore leaving a less than excellent customer experience and partner experience. When we talk to resellers, what we're identifying is that enable fits very squarely in between those two choices. We have that maturity of support infrastructure. We have the maturity of back-end systems. We have the resources and we have the desire to go out and engage with resellers, not just on a transactional level but in terms of building longer-term relationships, and we have a very strong cyber-resilient story that those partners can go and talk to their customers. We're building teams internationally. Our presence has gone from North America to the UK to DAC to ANZ as well, so we have presence in multiple countries. Then in addition to that, we have this cyber-resilient story, which is becoming so relevant in the marketplace. Only last quarter, one of the biggest cyber-security vendors in the market, one of the largest data protection vendors, announced that they were going to work together to deliver cyber-resilience to their joint customers. This is how the market has evolved quite significantly, specifically in the last five years, as the number of threats has increased and organizations are being impacted by that on a daily basis. As I said, I've been in this industry a long time. We've always talked about the potential of something happening, but it always has been for a long time about the if. If something happens, you want to make sure that you're stopping it happening, not the when. That has shifted more recently to when, and what we're seeing is more and more organizations being impacted. In the UK in the last couple of weeks, we've seen Marks & Spencer, a massive retail organization, and the co-op, another large retail organization, both being impacted by data breaches. So it's become, as I said, more of a when than an if. That's important because it's no longer just about making sure we stop stuff coming in. It's making sure that we have a plan and customers have a plan for when something happens, how they make sure they back up what data they've lost, how they make sure that they can be running their businesses continually through that process. And we do that through combining our data protection solutions, our MDR and XDR solutions we acquired through AdLumic, and our existing unified endpoint management to give customers that single pane of glass to operate across that total cyber resilience piece. And then through a commercial perspective, what we've done, an engagement perspective, what we've done is we have looked at what are the five most important things for most resellers when they're engaging with a new vendor. They're all, in my 20 years, I've always been talking to resellers. They've always told me these are the five things they're looking for, and it hasn't changed necessarily in the last five or 10 years. First of all, it's about making sure that they're working with an organization where they're profitable. We know from the research that we've done that the average retained margin for a partner today in the cyber security space is 19%. In the data protection space, it's less, about 14%. So we know we need to deliver a program that gives the partners more profitability than they would get if they were in the cyber security space. So more profitability than they would get from those standard average retained margins. But also, as I said on the previous slide, it's about understanding that partners are managing the lifecycle of that customer and making sure it's not just about providing high-end margins, profit margins at the initial engagement with that customer, but in understanding that customer is managing the lifecycle and making sure we have credible incumbency protection in there as well. We've talked about the cyber resilience story, and I genuinely believe we have an incredible story to go and tell to the customers. It makes it easier for the sales teams and the sales engineers at resellers to go and talk to their customers if those customers are more welcome to receiving that information about a new technology. We're not trying to position ink cartridges and printers here. We're talking about cyber resilience and cyber security, which we can all agree is the number one priority for customers today. And we have spent the last six months completely re-engineering our back-end systems. We have built a brand new partner portal, brand new reseller landing pages, completely new collateral that is focused very much on the end user and the reseller, not MFP. And we're in the final stages of building a full accreditation profile as well, which means partners can feel confident in positioning our technology, but also feel confident that we're not going to take away from their revenue-generating activity with lots of back-end admin system issues. We've also built a very strong sales team to make sure that when we get those opportunities, we are able to engage with our partners and we are credibly representing those resellers when we talk to their customers. We have different teams focusing on this space than we have on RMSP because we appreciate it's a very, very different sale. And then finally, when these organizations invest, and they are investing a significant amount of time, resource, energy, and money working with a vendor like Enable, they want to make sure that they're not just talking about one specific technology. They want to make sure that they're engaging with an organization where they can cross-sell multiple technologies. So to the part of the program, this is a big slide. It's a busy slide. So let me take some time on this because it's important to make sure we get this, that you're all very clear on this at the end of the call. First of all, there are primarily three specific transactions that this partner program is designed to support. And they really represent 99% of the transactions that will be. And those transactions are, number one, a reseller brings an opportunity to Enable. They register a deal. I'm sure you're all familiar with deal registration, but they bring a deal to Enable. The second one is where we, as an organization, working on an opportunity, and we bring that to a reseller. This isn't simply fulfillment. This isn't us working an opportunity, taking it to a reseller, and giving them a small amount of margin. This is making sure that we are working with resellers on specific opportunities so they can understand how we're positioning Enable with that customer. They learn, and therefore, they can feel more confident about positioning that with their customers themselves. And then finally, as I've mentioned through the slides, is the incumbency. It's making sure that our partners are protected or have that margin advantage when it comes to the point of renewal. I talked about the average retained margin in the marketplace. And what we've tried to do here is make sure that at every reseller tier level, our partners are making higher margins than the average. Our reseller tiers are based on a couple of things. We have four different tiers from authorized through to premium. Those tiers are based on the amount of revenue a partner generates and certain accreditations that they have to achieve. At the same time, what we're saying to our partners is, if you believe that you can hit those revenue goals within a set period of time, we do have a fast track program as well. So where you may have partners that are already engaged with one of our competitors or a different technology, and you believe and they believe they have the ability to deliver what's required for a growth or register or even a premium reseller, then we can talk to them about fast tracking, ensuring that they can start to receive those higher level of margins straight away. But equally, for those smaller partners that may have a mid-market customer base, they'll want to join but are concerned because maybe in the past they've been challenged by working with other vendors, where that vendor prioritizes their more strategic partners, we have a program that supports them in bringing their customers to us. It supports those new resellers engaging with Enable. And in this example, what you can see is at an authorized partner level, at entry level, those partners, if they register the deal, receive 50%. And then any other partner, regardless of their status, so a premium partner in this example, would only ever receive the base level margin. So every partner only receives the base at 5%, unless they've registered a deal with us, only one partner can register a deal per technology, we pass them a lead or they aren't the incumbent. And let me talk about something I've just mentioned there, which is when a partner registers a deal, they can register that for multiple technologies. And the reason we've done that is this program is designed to reward proactive resellers. You could have a partner that creates an opportunity for MDR with one of their customers, but hasn't got the experience or doesn't want to push or position a data protection or a unified endpoint management. Therefore, we've allowed in our program that other partners can then register those other technologies in the same customer. The incumbency is the same. The incumbency doesn't protect the reseller in the whole customer. What it will do is it will protect them for the specific technology that they sold to that customer in the first place. And if I just drill into those product categories a little bit more, there are specifically three categories that we have, cybersecurity, data protection, unified endpoint management. Deal registration is available for each one of these categories. The only caveat and the only difference in these is for MDR. In the cybersecurity category, MDR is still available for deal registration, even if a customer has one of those other security products. Whereas obviously it's different in unified endpoint management, the deal registration covers those technologies. That's what the reseller would receive incumbency for. So it's important, as I said before, to make sure that we have that go-to-market support for our resellers and also for you to make sure that you can become educated and your resellers can become educated or enabled, that you have the tools and they have the tools to go and position, enable with their customers. That's really important. A very simple process and simple way to manage and register deals and also to access MDF as well. We want to make sure our partners have access to marketing funds to deliver Channel 3 marketing to their end users. And that's something we're working with some of our distributors already in North America and something I would encourage we do more of. And then our new platform, which is Market Builder, which is effectively our partner portal, will allow our partners to come in, sign on as a partner, become fully accredited and trained on our solutions to the level that they want. Maybe that's just sales training. Maybe it's all the way through to being able to do pre-sales on those technologies to the point of identifying an opportunity and registering a deal in that same portal as well. And then as we start to pass through leads to our partners through that Enable Supplied program, we can manage those leads through Market Builder as well. The deal registration is relatively simple. We've designed it to be as easy as possible, and it is only available to one partner per technology. As I said, there is availability for multiple partners to deal reg multiple technologies for the same customer for all the reasons I talked about before. But the idea is we collect the information in the deal registration format within Market Builder. That information goes straight into our sales force, and then we can identify if there's already an existing opportunity or not. And if there's not, that then gets passed straight through to one of our dedicated mid-market sales team in North America. They are actually aligned to specific product technologies as well. So your resellers can feel confident that if they find an MDR opportunity, it goes to an individual who understands MDR if they are focusing more on the customer. If they are focusing more on the code opportunity, that routes to a specialist on code so that when they're engaging with your resellers' customers, those customers have an experience with an individual who knows the technology and, more importantly, knows the market and how we fit within that market. And then we also have all of the collateral and all of the elements that your resellers will need to go and position. But more than that, we've built specific marketing campaigns that are available in Market Builder. That's especially important for those smaller resellers that might not have a marketing department or don't have the resources to build these types of campaigns. These campaigns are built. One of our most recent campaigns is around breach prevention using our 0365 Breach Prevention technology. It's something that I think will be incredibly popular in the market. It's that kind of conduit between EDR and the full MDR spread. So we have campaigns like that that enable your resellers to very simply package up something that they can go and present to their customers. We also have the battle cards, which will be available shortly, which means that reseller salespeople can have all the information they need when they're talking to customers and they're presented with challenges like, why would I buy Enable versus another technology that does the same thing? And we're also providing full PowerPoint decks so those sales teams can go in and position Enable with their customers. Importantly, what we've done is we've identified that we have to separate how we work with our MSPs and how we work with resellers. And this is important for a number of reasons. We've also created two different price lists, one for our MSPs and one for our resellers. Because in the MSP world, we don't know who the end user is. We work directly with the MSPs, or we work with you who work with the MSPs. In the reseller space, it's very, very different. We know who the end user is. That reseller will register an opportunity and we will make sure we manage that opportunity and lend resource to close the opportunity with that reseller. We also make it very clear to have two separate landing pages so that the resellers only get access to the reseller page if they sign up as a reseller. So if you do have an existing MSP that wants to engage on that resell motion, they will have to sign up as a reseller as well to gain access to this, the pricing, and all the support that comes with it. This always scares me when I see partnership benefits and there's nothing on the slide. I just wanted to summarize what we've talked about over the last 35 minutes to 40 minutes. We have built a set of incredible solutions that make us one of very few vendors, if any, right now, that has best of breed individual solutions offering cyber resilience. Many of you will have had experience with how we deploy and test, but also how we deliver our technology. It's very unique in the market. It's something I haven't experienced before, just in terms of the time, the reduction in time it takes to set up our MDR and our code data protection solutions, and how unified endpoint management can help make that even easier. We are investing significantly in this channel business in making sure we have local teams. You will see that with the onboarding of AdLumen, we significantly increased our channel account manager team in North America. And we want to increase that by making sure we have additional account executives to support them and also more sales engineers as we start to engage with those larger organizations. I've talked about the channel program. I hope you understand and appreciate that everything we're doing now is made to make sure our partners feel we have a consistent and a transparent approach. And we talked about profitability, the average retained margin of 19% in the cyber security space, 14% in the data protection space, and us offering certainly business changing profits. If you're a premium reseller, for example, even in a competitive scenario, you should be in a position where they could retain roughly 25%. And we've also made sure that our margins for distribution are very profitable as well. I don't want to share and I won't share any distribution margins on this call, simply because we don't know who else is on this call. And I think it's too sensitive to share that. And it's commercially not what we should be doing, not responsible. So for that reason, in terms of your call to action, the first thing you should be doing is talking to your distribution account manager, or if you already work with a channel manager or a channel account manager, go and talk to them and they can give you the details of the partner margin or the distribution margin. We are running a series of webinars on the 26th of June to launch the same program we talked about today. They're on the 26th of June. Please make sure you have a link to that and get your partner signed up for that so we can talk to them about what it is we're doing. Get access to Market Builder. We want you to engage with those campaigns as much as our resellers. So it's important you get familiar with the collateral that's on there and the playbook so that you can share those with your resellers. And engage with your local teams, understand more about this and how we can together be really successful in positioning Enable with end users via the channel. So I think we'll have some time for some Q&A now. Yes, we will, John. So just checking what questions have been posted in the panel, just to remind everybody that's where you can pop anything that you have that we can address today. So to get us started, the first question that's come in, John, is, is there a process to bypass the lower margin for strategic deals or strategic partners? OK, so I would split that. I would split that question into two elements. Because there's two parts. So the first part of that question, I'm sorry, I'm sneezing and it's a tree pollen. It's what happened to live in the countryside, Nico. So first part of that question is, what we don't allow is we won't allow a customer to try and drive the decision that we have based on the deal registration that's already come in. If a partner registers a deal with us, they're receiving a higher level of partner discount because they've been proactive and they have positioned that with us. That is not pricing that's intended to be passed on to the end user. So we will not remove that deal registration and give it to another partner if because the customer says that's what they want tackled. I think the other part of that question is. Do we allow partners to join us at a higher level tier so they can benefit from the higher margins? Yes, we will. I talked about it earlier on the slide. There is a fast track program. It is well managed and we would work with your resellers to understand what their plan is to hit the revenue goals that we need to achieve to get to those part levels within the first year for them to benefit from those high margins. Perfect. Thank you, John. And the next question that's come in is, what is incumbency and when does it apply? Yes, a good question. So many of you hopefully will be familiar with it, but those obviously you aren't. So incumbency really is designed to make sure that when the end user comes to the point where they're renewing, that they don't create a competitive situation for the reseller that did all the work at the front end and has managed that end user through the life cycle of that customer. It doesn't create a position for them where they can't effectively compete, or if they do compete, they're not making any money at all. So incumbency gives a slight advantage on margin to the partner that originally sold the technology to that customer versus those partners that didn't obviously sell it originally. Perfect. And the next question that we've got that has come in is, can existing and active MSPs register deals if they engage with an end user who wishes to purchase a license? Yes, they can. As I said on the slide previously, what we have to make sure is that MSP first of all has to sign up as a reseller. So they have to register as a reseller. They would then gain access to Market Builder and all the pricing that you would need as a reseller. And then he could register deals through the partner portal as a reseller. Perfect. And that actually looks like, Don, all of the questions that we've had come through on the Q&A panel. If there are any outstanding, obviously, please do be in touch with your local distribution manager so they can address those and take you through our margin program. I'd like to thank you all for your time today and joining us for the session and John as well. Thank you for a great session. We'll follow up with the session with an FAQ document covering all of these questions and other ones that we've identified that may be of interest to you. I just want to wish you a great rest of your day and appreciate your time. Take care, guys. Have a great rest of your days.
