RackspaceHosting restructuring cloud apps partner program 9 March, 2010 By Mark Cox

PromoPipeline Exclusive Channel Promotions Find Out How You Can Make Money Today! ENROLL FREE! >> Channel Planning Before Its Time William Vanderbilt - Innovative Learning Channels Factory Direct Should Not be Cheaper William Vanderbilt - Innovative Learning Channels Cloud Ecosystem II: A Candid Conversation with Oracle Beth Vanni - Amazon Consulting Cloud Ecosystem: A Candid Conversation with Rackspace Hosting Beth Vanni - Amazon Consulting Channel Manager Compensation William Vanderbilt - Innovative Learning Channels

"We've always had the sense we needed to put more resources into our reseller channel marketing, and now is the time to step up our offerings," said Kirk Averett, Director of Product, Email & Apps Division at Rackspace. "We are seeing increased demand for hosted email applications, from people who didn't think they needed to consider this type of application in the past -- especially as some big names have gotten into the market."

The new plans for the Email & Apps channel program provide resellers more opportunity for recurring revenue, a tiered structure with mounting benefits to reward growth, the ability to set prices and margins, and additional marketing and training resources to help channel partners grow their businesses.

"There are some adjustments around the structure of incentives, but that alone doesn't make a relaunch," Averett said. "This is all about relaunching the relationship with resellers. We want to keep a strong relationship with them, and give them the support and tools they need to succeed."

To support this new approach Rackspace has also already begun investing in training and marketing resources for channel partners, providing new white-labeled collateral that partners can brand and use for their marketing campaigns. Resellers also have access to monthly sales force training, educational webinars and materials, and Rackspace's ongoing commitment to Fanatical Support.

"The webinars are a key part of relaunching the relationship, all of the sales materials being easier for them to rebrand, all of the new products that have just been released to resellers -- and a couple more in the pipeline," Averett said. "The webinars train our resellers on all sorts of subjects -- from revenue generation to how to compete against Google Apps."

"I did a webinar today on us versus Google, and it wasn't Google bashing, it was our clear competitive advantage, focusing on our hybrid email and our fanatical support," said Adam Williams, Senior Product Manager, Email & Apps Division at Rackspace.

In the last six months, Rackspace has introduced several new products that present resellers with more opportunity than ever to increase revenue through existing customer up sells and bundled solutions. In addition to its proprietary Rackspace Email platform, hosted Microsoft Exchange, and mobile solutions, Rackspace now offers Email Archiving, and hosted Microsoft SharePoint, with Rackspace Cloud Drive and Server Backup on the way for resellers.

"Sharepoint is very important from a revenue perspective," Averett said. "Many resellers service particular verticals and they can wrap it around their own solutions, charge for their professional services. We can't perform that level of customization because we don't have that deep relationship with the customers."

"Our hybrid offering also positions us well in the market," Williams said. "Customers don't have to go all Exchange. If only 10 people in a 50 seat company need it, they don't have to buy 50 licenses. They can put the others on Rackspace email, which is less expensive. That hybrid offering is tremendously important in the marketplace."

Averett said that some resellers are getting into email services because they have discovered its' stickiness.

"It 's an additional stream of revenues, but it also reduces the chance the customer might leave the reseller," he said. "Email is the key tool here, and offering email to the customer is a great chance to deepen that relationship."

Averett said that while competition in their space is intensifying with Google and Microsoft moving in, high profile competition also raises the profile of their services in the market, and he thinks they are well positioned against the newcomers.

"It comes back to the fundamental identity of who Rackspace is," he said. "Our reputation and our core business has everything to do with hosting IT and everything with providing fanatical support. Google has issues on support. Microsoft doesn't have a reputation on hosting and its' support reputation is expensive. The question is how long are you willing to wait if your email doesn't work. Our support deals with your problem in two rings of the phone. We are an established player in hosting, with phenomenal support."