Published: June 21st, 2016

LAS VEGAS – Since its inception a decade ago Nutanix has positioned themselves as an unconventional vendor in the marketplace. The San Jose, Calif.-based company has taken the same approach with its channel strategy.

For instance, Nutanix does not have a three tier program with clip levels; nor do they pay back end rebates. Instead the hyper-converged vendor focuses on an investment strategy with channel partners that will see the company work in lock-step with 40 solution providers globally.

Nutanix still has a channel network of more than 4,000 solution providers, but those will be served through distribution.

Chris Morgan
Chris Morgan

Chris Morgan, the recently named channel chief of Nutanix told CDN that the company practices the 80/20 rule; it’s just applied mostly to the 20.

“The investment strategy with partners are based on which partners are ready on what we are doing and take it to the customer. Partners can still be transactional with distributors but we are focused on a small number and we want to help them transition their business. What has to happen is they need to break from the past and go to the future,” Morgan said.

One of the incentives for these 40 partners is a strict deal registration program that ensures price protection. Morgan added that these partners also have the freedom to sell anything else.

“Nutanix wants to upset the legacy relationships and forge effective business transformation,” Morgan said.

He added that partners interested in Nutanix should ask themselves:

  • What is my future?
  • Do you want to look different?
  • Can I provide value to the customer beyond the legacy vendors?

As for the 40 partners Nutanix wants to focus on. This group does not have any description as Morgan is open to working with large partners and small ones.

“This is not a size thing. I’m looking for partners who get this and want to bring new value to the customer. If I only have 12 customers, for example, and I’m based in New Mexico I can help them. And, we are not arrogant enough to force partners not to sell or service legacy equipment. That would be cocky,” he added.

Morgan reiterated that this new approach to managing a channel is not a loyalty test but a philosophical alignment strategy to bring value back to the data centre.

In terms of margins, Morgan said partners should expect to make between 13 to 20 points gross profit. Again there are no back end rebates but the potential professional services with migration off of legacy and hypervisor can increase profitability.

“There’s no complexity with Nutanix and they can go to a customer and say the money saved can be re-invested on an app layer making your more productive. This way a partner can really help, while moving money into higher valued services,” he said.

For Canada Nutanix is getting aggressive with service providers to helping them create a differentiated business model. One example of this is with Q9 Networks who realigned with Nutanix and can now do single hardware solutions with Linux or Nutanix. “This is an example of how we work with partners in developing a go-to-market that avoids channel conflict, while driving business throughout the country.”