Understanding how services programs fit with traditional partner program models.
In 2019 HPE announced that it would offer its entire product portfolio ‘as a service’ by 2022. The HPE ‘as a service’ offers are sold under the HPE GreenLake banner. It’s the fastest-growing part of HPE’s business.
But how does HPE GreenLake differ from HPE PointNext, which is HPE’s flagship services business launched in 2017? And similarly, what’s the difference between the Cisco Services Partner Program (CSPP) and the Cisco Cloud and Managed Services Program (CMSP)? Here we unravel the mysteries of service programs.
TYPES OF SERVICE
The start point is to be clear on what types of services technology vendors offer.
X AS A SERVICE. Software as a Service (e.g. Salesforce), Platform as a Service (e.g. AWS), and more. These are software offers that might previously have been deployed on premise, but which are now delivered ‘as a service’. This means that the solution is delivered (‘provisioned’) by the vendor to the customer through a browser, and the user is charged based on usage.
MANAGED SERVICE. A channel partner hosts the vendor solution so that the channel partner can provision it themselves as a service to end customers. Channel partners often wrap their own services around the core vendor offer to create an extended solution.
BRANDED SERVICE. Many vendors offer technical support and remote management packages that are sold by the vendor or that can be resold by channel partners. The vendor delivers the service to the customer. Using Cisco examples, this could be a one-time service, like a Network Performance Assessment, or an ongoing service, like Network Monitoring. Warranty services for hardware would fall into this category.
COLLABORATIVE SERVICE. Channel partners can be trained to use the intellectual property of the vendor to deliver vendor-approved service packages themselves. The Cisco Collaborative Professional Services (CPS) offer allows partners to use Cisco methodologies to assess a customer network.
PARTNER SERVICE. A service developed and delivered by the partner on their own. Partner services fall into two categories. SUPPORT SERVICES are to help customers in the event of problems and are often a requirement of being in a partner program. PROFESSIONAL SERVICES are consulting led and may be enhanced with BRANDED and COLLABORATIVE SERVICE offers from vendors.
X AS A SERVICE and MANAGED SERVICE are about how software applications are delivered to customers. BRANDED, COLLABORATIVE and PARTNER services are about support and professional service add-ons that integrate, enable or enhance software applications.
HPE GREENLAKE AND POINTNEXT
Armed with these definitions let’s revisit that HPE announcement from 2019: the entire product portfolio ‘as a service’ by 2022. This means that HPE will give customers the option to buy all their products AS A SERVICE (or as a MANAGED SERVICE) by 2022. HPE GreenLake is the business unit for AS A SERVICE offers so this business unit will continue to grow fast.
HPE PointNext is the business unit for HPE BRANDED SERVICES. In other words, PointNext services are delivered by HPE and are sold by HPE direct to customers or are sold by HPE partners on behalf of HPE.
HPE GreenLake and PointNext are closely linked. HPE and its partners will sell subscriptions to GreenLake software AS A SERVICE alongside packaged HPE PointNext BRANDED SERVICES, to create end to end service-based solutions for customers.
Partner requirement and benefits in relation to selling HPE GreenLake and PointNext are all handled through the HPE Partner Ready Partner Program.
CISCO SERVICES PARTNER PROGRAM
HPE PointNext services represent one third of all HPE revenue, a very significant number. Similarly, Cisco Services represent around one third of all Cisco revenue.
Unlike HPE, where everything is handled through the HPE Partner Ready Partner Program, Cisco has separate partner programs for AS A SERVICE and for BRANDED/COLLABORATIVE services.
The Cisco Services Partner Program (CSPP) is perhaps the benchmark standard for services partner programs. Cisco partners can sell BRANDED and COLLABORATIVE services through the program. Quarterly rebates are paid based on service sales volumes and attach rates of services to core product sales.
Again similar to HPE, Cisco is transforming its core business to AS A SERVICE. The Cisco Cloud and Managed Service Program (CMSP) rewards partners for selling AS A SERVICE solutions.
HOW TO UNDERSTAND SERVICE PROGRAMS
• X AS A SERVICE and MANAGED SERVICE are about how software applications are delivered to customers. Most vendors are transitioning towards these models in their core portfolio.
• BRANDED, COLLABORATIVE and PARTNER services are about support and professional service add-ons that integrate, enable or enhance software applications. Partners can resell BRANDED SERVICES, and they can sell and deliver COLLABORATIVE SERVICES.
• Some vendors (like Cisco) create separate partner programs for BRANDED and COLLABORATIVE services. Other vendors (like HPE) brand these services separately (‘PointNext’) but roll them into the core partner program when it comes to partner status and rewards.
• For many vendors the revenue stream from BRANDED and COLLABORATIVE services is highly significant. ‘Pull through’ of services from core solution sales is a critical metric, so it’s also used in many partner programs to measure partner success.
• Similarly, the opportunity for partners to sell and deliver their own PARTNER SERVICES is critical when they consider the potential profitability of a partner program.
The integration of service offers into partner programs is complex and challenging for most technology vendors. At Kovendi we have the insight, experience and expertise to help you. Get in contact if you want to know more.