Transcript

Tony Rummans (introduction) : We do have quarterly business reviews with all of our distributors. We talk about opportunities. What are you hearing from the MSPs? Sometimes you’ll have a round table, we’ll have a group of MSPs together. We’ll talk to them about our product direction, our product roadmap. So they’re providing enormous services for us, besides just direct selling, fulfillment. They’re also helping us with, frankly with our product roadmap on what they’re seeing, what they’re hearing, what are the features and functions we need, what’s the priority of what we’re developing, what do we need there? So we rely upon them as much or more than our own direct sales force.

Announcer:        Welcome to the Software Channel Partner Podcast where you’ll hear leaders of partner programs talk about their greatest challenges and most successful solutions. And now your host Louis Gudema, the President of revenue & associates.

Louis Gudema:  Welcome to the Software Channel Partner Podcast where we talk with leaders in software partner programs to learn about what’s working today. I’m Louis Gudema, the President of revenue & associates where we help companies grow faster by helping their channel partners grow faster. Today I’m talking with Tony Rummans, VP of Global Sales at BitTitan. Before BitTitan, Tony was VP of Global Sales at ProQuest, senior vice president of software and solution sales in the Americas for Kofax and for 10 years in several VP of worldwide software sales roles at IBM.

Tony, welcome to the podcast.

Tony Rummans: Louis, great to be here.

Louis:    Please tell me, fill in a bit more detail on your career path. Obviously, you love sales. What took you from company to company? What brought you to where you are today?

Tony:     Sure. Let me just spend a minute. I could spend hours and hours, but I’m just going to spend a minute on that. So my career Louis has probably been, I categorize in two halves. I would say not by choice or design, but I think it just ended up that way. The first half of my career was with IBM, and it was a very traditional career path with IBM. A sales rep, started in Chicago, had regional roles, Americas roles, global roles, all in sales. Did a little bit of marketing, a little bit of services, but primarily in sales. But a very traditional way of an IBM career at that point.

From there, the second half of my career has been, I’ll say a little bit more exciting because I’ve been responsible in a number of different areas, several with IBM, then with Kofax, ProQuest and now BitTitan where the company was either not doing as well as they’d like to do from a sales standpoint — they needed a bit of a turnaround or a lot of a turnaround situation to occur with their sales organization and results. And one thing led to another and I’ve gone to companies or departments in IBM, organizations in IBM, that have had a chance to turn around that business. Or, if it wasn’t doing as well, just accelerate the growth in it. And that’s kind of been exciting for me because sometimes it’s easy to identify the problem, it’s harder to execute and change those. But that’s really what I’ve been doing for the last 15 or 16 years.

In fact, surprisingly it probably really started when I was at IBM and went to a role to have global responsibility for our channels business for part of our software business at IBM. At that point it was information management software, and I was responsible for business development, but really that term at that point was more channel sales, channel development, and we were investing a lot in having ISVs utilize some information management software, but getting very little in return. And they brought me in from a sales standpoint to figure out how to turn that. And from there, one thing led to another and these other roles, including BitTitan for the past year, I figured out how we can do better. So two halves to a career, mostly all in sales. Global for the last 25 years. I’ve lived in Madrid, lived in Seoul, worked in both of those, lived in seven different locations within the United States. Had responsibility for Latin America for eight years. So a lot of different things globally and it’s been a lot of fun across the board.

Louis:    Yeh, sounds very interesting: Barcelona and everything. And huge changes in the industry. You were originally on-premise and now it’s all cloud.

Tony:     That is correct. That was, I had one role at IBM with enterprise content management software. And that was the first time I think I was introduced to that to say, Wow, on-premise software sales are great. It was really driving the business. But it was the time to say, Wait a minute, more and more customers are asking us do you have an offering in the cloud? Could you offer this to us on a, at that point people even called on a rental basis; Software as a Service wasn’t even known as much there. And that was the first change. And then it at Kofax and other companies, same thing. Worked with Microsoft a lot on the very first, we were on the very first Azure partners with Microsoft at the time and then now, the last two companies, ProQuest and now BitTitan everything is cloud-based, everything is a SaaS-based from those two companies and it’s all we offer. And it’s growing as you know, just significantly in most every area in every geography.

Louis:    So what does BitTitan do? Why don’t you tell people the kind of software that you have and who do you sell to?

Tony:     Be glad to. We’re really a fully automated SaaS solution that migrates data from one source to a destination in the cloud. So you kind of boil it down to say we move data from a source to a destination and we do it securely, privately, and we do it quickly for a customer. That includes workloads that are migrated, such as email, calendars, public folders, personal archives. But we really migrate to a variety of different destinations in the cloud: Office 365, Google Suite, a number of things there and from a number of sources. So it’s providing a faster, secure way to migrate data to the cloud for companies, institutions, educational institutions, governments, all industries from that standpoint.

Louis:    And who do you sell to?

Tony:     We do. We sell to really everyone. We’re selling to B2B. But we are selling — BitTitan as a company — are selling to distributors and to oftentimes managed service providers. So to all channels and Louis that’s about 90% of our business. About 10% we will have individual companies or corporations come to us and say, We’d like to use your tools, your SaaS-based tools to do that migration. Can we buy that from you or can we acquire that? And we do that, but it’s only about 10%. So distributors and our channel business, channels through MSPs are really where we, what we sell to. And they sell, they end up, their end-user customers are everywhere from Marriott to a ThyssenKrupp Elevator company, to the University of Nebraska, and everyone in between. Anyone that is trying to move say their Exchange on-premise environment for example to the cloud to Office 365, that would be a customer for our channel and therefore if you will, a customer of ours as well.

Louis:    So you have some direct salespeople and you also sell online on your website, but you’re saying that’s only about 10% of your business and 90% of it is indirect?

Tony:     Yeah. So let me break that down for you. The three areas are correct: online, through indirect if you will, and then direct. So online is about 8-9% of our business today and that is through our website bittitan.com and anyone can go there. Prices of the solutions and products are there. They can acquire that or obviously as most websites you can contact us for volume discounts and volume purchases, a demo, a pilot, all the things that then where website leads you to an indirect or direct sales organization. But online is about 7-8% and growing.

Indirect, which I’ll call now our distributors, our distribution channel, is about 35%, 30-35% of our business. And that is the fastest growing part of our business, of our three channels. And those distributors are about 200 distributors today, but a large growing part of our business. And about 60-65% we’ll call direct, but direct for us is going again through the channel. But in this case, a channel being a managed service provider, an LSP, an MSP, one of those entities. And that they are selling to the end user. So they’re acquiring our licenses, utilizing those licenses in a project to migrate someone from maybe also the software that’s being used on-premise or there’s a merger occurring between two entities and they need to go to one tenant, one system. So that migration is also utilizing our tools, again, part of the different workloads that we offer from BitTitan.

So three channels, UL direct, the indirect, which is really distributors, and then direct from our direct sales people selling to MSPs primarily, as I said, and once in a while to an end user customer.

Louis:    Okay. So some MSPs would get it through you and some would get it through a distributor?

Tony:     Exactly. Exactly.

Louis:    Okay. So why that model? Why direct and through distributors?

Tony:     Yeah, it is. It’s as simple as why I think probably any company Louis is doing this today and has done it for years now: reach. We are a smaller company, we’re not a startup any longer, we’re a 12-year-old company. Ten years ago our first product came out, but we are not a fortune 100 company today, we’re not a startup either. But when you have something successful as we do with our flagship product called MigrationWiz, when you have that, we do not have the reach today to get and have multiple salespeople in every country that we deal in. We are in 187 countries, sold to over 36,000 customers. But 187 countries that’s more salespeople than we even have if we just had a sales organization as part of the company.

So for that reason, it’s reach. It is when you go through a distributor the ones we deal with, some we have some very major players: the Ingrams, the Tech Datas, the Synnexs, those are major players as distributors for us and many more. But when we go to them, we educate their sales team, they have often times salespeople within those enterprises selling say Microsoft software that they want to migrate a customer from an on-premise Microsoft system Exchange to Office 365 from Microsoft, we’re educating them as well. So within those organizations they’ve got different, some have a straightforward group of salespeople that sell, and they sell everything. And others are so large they differentiate their sales force, within an Ingram for example, and we will actually train and educate and enable them. And all of a sudden we now have multiplied by 10, 50, 100 times our sales capability in a particular country.

I’ll give you one example Louis: Australia. Australia today we do not have a salesperson, believe it or not, in Australia. That is about to change, but we do not have a salesperson in Australia. But we did over $1 million of software, of solution sales if you will, of BitTitan software there, and it is growing. And we are investing there as well as we are in many countries, but we’re investing there. But it’s the distributor, it’s the channel, it’s the indirect way with our distributors there that really drive our business and have done so well for us. We think we can grow a lot. And the growth rates as long as I’ve been here actually certainly prove that out. Again, fastest growing part of our business is that channel versus direct or versus online.

Louis:    On your website you have a page where you list some distributors, but it sounds like that’s really the tip of the iceberg because there’s only like two dozen or so listed, but you said it’s actually more like 200 around the world?

Tony:     That is correct. Some are very small, we’re adding distributors from time to time. But those three I mentioned before have been with us for some time and are the largest. But then you have a distributor say in the UK, like a West Coast, they act as a distributor, they also provide services directly, a little bit like an MSP, but they are a distributor as well. So West Coast would be in that type of area. Arrow, also. Pax8. All these are distributors for us and then we have smaller ones in different countries as we’ve grown.

Louis:    So when you say that the channel, the distributor channel is growing the fastest for you, that’s organic growth, that’s not really because you’re adding that many more distributors, but because the organic growth in that channel is so much stronger?

Tony:     It is. I would say it’s probably 90% organic growth. The company before I got here and hopefully while I’ve been here, has done a very good job of working with the channel, working with the distributors. Realizing that was the way they were going to grow quickly early on and they did that. And we’ve built up I think some credibility in how we support the distributors and they have been with us for some time. We’ll find from time to time, especially as you may go into one country, smaller country, and maybe one of the ASEAN countries we haven’t been there before and pick up a new distributor. But for the most part we have some very powerful successful distributors from Japan to Australia, obviously in Europe and certainly the United States and in China now that we go to and they are really driving our business for us.

Louis:    So tell me more about that. If you’re a software company and you’re selling through distributors and you want to really make that channel rock like it is for BitTitan, what are some of the things that you’re doing that are so effective in growing the organic sales through distributors?

Tony:     Yeah, I think there are two or three things Louis that have made it successful for us. First you do have to have a product, a solution, and clearly articulate the benefits of it, why it’s different than others in the marketplace. And how their salespeople then can sell to their next channel layer, if you will, to their MSPs. How they can do that. So you’ve got to be very clear on what you’re selling and why and the benefits and why it’s priced as it is and differentiate in the market for that distributor.

I think second, you’ve really got to be thorough in the training and enablement for a distributor. They as a lot of companies as we and others will have turnover of employees, turnover of salespeople. So it’s a constant training enablement, not just because of turnover, but because we have new products. We have new features and functions. We’re going to introduce that. Some are very major, some are minor. But we want to be sure the salespeople that are selling BitTitan, a distributor, know about that, know about the current training enablement we have. And it’s really, really important that we continue to do that. And I’d be glad to talk about how we do that training and enablement in a minute as well.

And then third, the reason I think we’re successful with them is you have to be responsive. We have to be responsive with the salesperson, the technical sales person, and customer support. Those three things have to be equally supportive. If there’s a technical issue of why can this work for a particular customer, a technical salesperson, which is part of our sales organization, is also working with that distributor. But a salesperson has to be responsive on pricing and quotes, renegotiating contracts and what the prices should be, being sure the right enablement is there, and issues. If there is a more serious customer issue, something’s being used that is creating some problem, they may actually be involved to follow up, even though we’ve got a great customer support organization that will take the lead and follow that up. But if you have a channel sales specialist we call that, as your point of contact, that person may be involved if the issue is big enough for that distributor, that person could be involved.

So if you’ve got the right product and it’s clear and articulated well, and we’re doing the right training and we’re responsive, those three things I think has made us successful with the distributors and why we grow. And sometimes Louis in fact, we have a distributor of Tech Data in Europe, but Tech Data may be somewhere else in the world that we haven’t had much of a relationship with and we may expand even in those distributors, but it’s still the same distributor. Again, most of our business being organic through that channel through distributors. So it’s working with them and growing our footprint with their customers, with their MSPs, kind of made us successful I think.

Louis:    And you have channel managers too I saw. So they work with the distributors?

Tony:     That’s correct. So it was a, I think it was a pretty major investment. I came on board, we were talking earlier, I came on board a year ago, and within a couple months I realized that we really did have an opportunity in our distribution business with some very big players to get to that reach I mentioned a minute ago. And by July of last year I changed and added to our sales organization specifically in the channel sales. And when I say channel sales, really referring to distributors in this case. And what we did was we had one individual that was responsible for the Americas for our distributors. I promoted him, actually well up in the organization to be a director, to be a sales director.

With that he replaced himself and we added in Europe to double from one to two, put two-channel sales specialists there, and had someone as a channel sales specialist already in Singapore working with Asia. So dedicated headcount we had those from a sales standpoint, we now had those five individuals. But supporting them, we also added one dedicated technical sales specialists, but they also have ability to go to our other five technical sales specialists they can call on.

And — that was the dedicated group — we also then took from those channels, sales managers. We also have the regular account managers, we have people called solution sales specialists. They also work with distributors because oftentimes there’s opportunities that may come into us. We find out and ask the question, do you already have a distributor you’re working with? And they say, yes, but I’d like to know more about your product etcetera. We will do that from direct standpoint, but then move that opportunity over to one of the distributors, either the one they indicated or maybe give it to three distributors for them to look at and see if they could close the deal.

So dedicated resources we have, and then we have the rest of the sales team that work with distributors because they’re passing opportunities through our distributors. Oftentimes they could be smaller opportunities, several hundred dollars or several thousand dollars, but those move over. And the distributor is very adept at working those quickly, efficiently, and productively for them and for us. And that’s one of the reasons I think we have grown. We’ve got more and more partners are growing strong, double digits, a number of new partners that work with us. Those new partners can come through a distributor, they may be MSPs coming direct to us, but many of those come through the distributor.

So last comment there, when the distributor has their set of customers who will, their channel if you will, that is what they’re working on hard to get more channel partners that work with them. And that’s where we pick up new partners, if you will, indirectly through the distributor. But that’s a big, big growth area for us. And that’s what’s been producing our results in that channel.

Louis:    So since your software, everybody who buys your software, they’re going to end up registering with you. They’re going to use it through BitTitan ultimately. So when you’re passing on opportunities to distributors, can you see this all the way through the pipeline? You can see how many whether those are closing or not or where they are in the pipeline? Do you have any kind of shared CRM or anything of that sort?

Tony:     Good question, and No, and I’m not sure we’re going to do that and I’ll tell you why. We rely on distributors and they then rely on their channel and then obviously to the end user customer that’s buying. And today, today most distributors have their relationship with their MSPs and obviously then with their customers, but with their MSPs. And that is where that relationship’s going to stay, Louis. And we are thankful that they have those relationships, as I said, and it’s growing in terms of number, it’s growing in terms of their ability to support those MSPs. So what happens when the transaction occurs and a distributor gets an order from their MSP that via the systems that are tied in between the distributor and BitTitan that can be automated.

So automatically the distributor processes the order after they’ve gotten a PO from the MSP, processes the order. That goes directly through their system to our systems, that order’s processed. There is no salesperson involved on our end involved in that and what just happens is a — call it coupon code if you will — a coupon code then is issued through distributor to that MSP for 10 licenses, for example, kind of move a very small enterprise, 10 licenses, 10 seats, 10 users. Again, as an example from Exchange, Microsoft’s Exchange on prem to the cloud Office 365. That coupon code then is there. When the MSP now is ready to do the services and do the migration for the end user customer, they then take that coupon code and then seat by seat or user by user they will then go through those 10 licenses they’re entitled to. Once they have migrated that customer over that coupon code if you will has expired and that is it for that transaction.

So we don’t get involved, we BitTitan, our direct salespeople do not get involved with the transaction or channel sales specialists also for us does not get involved with that transaction because the distributor is efficient in the way they’re working. And our systems, the APIs we have linked up with the distributor, is that successful that we don’t need to get involved and that’s why it makes it a great productive channel for us and it’s been working quite well.

Louis:    So you know the MSP that’s using those licenses, but you don’t know the end company that they’re moving, that they’re migrating, and it doesn’t really matter to you?

Tony:     You know, it would be great. We have asked and there’s the capability to know the MSP that’s using it, and even the end user customer, we’ve got that ability in our system to log that. But at this point sometimes we know, sometimes we don’t, it’s not that essential. We’re not going to go directly to an end user customer and look for a second project/ we want that MSP to do it. We’re not even going to go to the MSP and say, do you need more help or more support? We are relying greatly on the distributor to do that. And when we rely on the distributor, we want them to provide that kind of service, that kind of support directly to the MSP. And if they do that, then I think that has been the best way for us to sell. And so we haven’t required it. Sometimes they provide that, sometimes they don’t. We’re not asking for it any further at this point and it’s growing for us.

We do have quarterly business reviews with all of our distributors. We talk about opportunities. What are you hearing from the MSPs? Sometimes you’ll have a round table, we’ll have a group of MSPs together. We’ll talk to them about our product direction, our product roadmap. So they’re providing enormous services for us, besides just direct selling, fulfillment. They’re also helping us with, frankly with our product roadmap on what they’re seeing, what they’re hearing, what are the features and functions we need, what’s the priority of what we’re developing, what do we need there? So we rely upon them as much or more than our own direct sales force.

Louis:    So it sounds like you have a very different relationship with the customer depending on whether they buy direct from you or through your website, or if it goes through the channel?

Tony:     We do. If it is directly on the website that is a website, an individual, a customer, we’re not involved except for the website unless they would like for us to be involved and they’d like to contact us and use the contact us form. That is them and our website. The channel is through a distributor that and then through the MSP. Again we are there, our channel sales managers and channel sales specialist. They’re there to support the distributor and what they need, the education enablement they need, maybe a different kind of contractual arrangement, more education for the MSPs, directly potentially. All sorts of things there, we’re there to support them but not down to the end user.

Over our direct sales force, as I said, sometimes maybe a company will come to us direct and we have that direct relationship. And then there are many MSPs on their own, they don’t go through a distributor, and they will come to us direct, at that point we might know — oftentimes then we would know the end user customer, but not always, but more times than not we would. So we may have a relationship with both parties at that point.

Louis, one of our largest partners is Microsoft. So Microsoft, as they’re trying to do their migration utilizing Microsoft consulting services with their fast track centers, they will come to us. They will have the services, they’ll have the software obviously, they’re the ones driving it. In that case, they often do involve us in the discussion with end user customer because they want the customer to say, Wait a minute, where’s my, you know, tell me where my data’s going to be. Are you making copies of it? Is it in flight? Does it ever get resided on another server somewhere? We are the ones that, our partners, Microsoft distributors, channels, they will come to us and say, Hey, could you join me on this call and just explain how this works when you migrate from a source to destination? And we will do that. And so customers feel much more comfortable then by hearing from the person, the tool vendor that’s providing the migration. They come and listen to us and involve us on the call.

Louis:    So it sounds like the customer experience is very different depending on the channel?

Tony:     It is, it is. The customer experience, oftentimes the end user customer experience, they may not even know that BitTitan was involved. There’s tools called MigrationWiz involved. They aren’t even sure how it was done. Most of the MSPs, which is really the vast majority who is doing the services, they’re saying, I’m going to take care of it for you. I’m going to do the migration. I’m going to do it within this kind of time. Here’s where your data’s going to be. It’s secure, it’s private, you’re not going to have to worry about it. And we’re going to, What do you want to move? We want to move our mailboxes, our calendars, and our personal archives. Great. At some point maybe I want to move teams, teams in Microsoft, teams to the teams migration. Whatever it is they’re doing it. They’ll say, and let’s say the price is x, that’s it. The end user may not know they’re ever utilizing BitTitan MigrationWiz software to do that.

Certainly the MSP does, very well, and they know our tools and they know for that customer we could be the best solution. We’ve done it before in their industry. We do it quickly, we do it all SaaS-based and that’s kind of a differentiator for us. We don’t ever install any other equipment on premise. We don’t have any of our consultants because we don’t have consultants to go out and have to consult on the project. It’s all SaaS-based, all done over the cloud and so they like that for us. That’s why I think distributors and MSPs come to us because we can do it anywhere around the world. No one has to find where, you don’t have to ship hardware anywhere. It’s all SaaS-based. We can get you up and running over a weekend in many cases with some of the customers. So the end user experience can be very different.

MSPs it would, maybe coming back to the distributor. If there’s a customer support issue then the MSP is oftentimes on the front end of that. That would be very similar across the different channels: direct, through a distributor, maybe online. They’re coming into one customer experience, customer support organization and we are then triaging figuring out the issue. And then going through the different levels of support to solve the customer’s problem. That would be similar, but the initial selling aspect, it could be different depending upon channel.

Louis:    Yeah. So the company that’s being migrated, whose data is being migrated, they don’t care. The MSP has a tool and it gets the job done.

Tony:     That’s exactly right. And they like the idea that How can you do this? I don’t have to be here to let someone in to put equipment in to migrate off to a where you’re going to store the data temporarily and move it on to the cloud. No, we don’t have to do any of that. So they liked that capability. MSPs like selling that and the customers love it to say, Wow, all we need to do is manage the project. We don’t need to manage equipment and other software and all of this other stuff. You guys can do that all through the cloud? The answer is yes, and the customers and many service providers do like that a lot.

Louis:    So have you looked at how the cost of sale compares by channel?

Tony:     We have, we’re looking at that all the time.

Louis:    Without giving numbers obviously. But how does indirect compare to online or direct?

Tony:     Yeah, online is the most, let’s say it’s the most profitable channel of the three. Oftentimes those purchases are smaller value and they are always, really almost always smaller than the indirect or the direct channels. Someone needs an additional three licenses, they want 20 licenses. I need it now. I did not acquire it before. I’m going to try to utilize this, they’ll go online. That from a profitability standpoint is the most profitable because it’s not a volume of any size.

The next most profitable is actually the distributor, which may be a little surprise. And then our direct channel would be the third most profitable of the three channels. The distributors are very profitable for us. The margins we provide them, we provide education and training, the customer support comes back, initial level one-type questions come back to the distributor. We get very, very few, Louis, questions or calls or tickets or requests from distributors into BitTitan. They have their own structure. They handle those questions and they do it usually very well. So we have a very small number of requests from our distributors into BitTitan: that makes that channel profitable for us. And then third being the direct sales people that are working directly with MSPs and sometimes end-user customers. So it’s a very, distributors are very profitable for us and online is profitable.

But again, only so many opportunities I think will go through online because this is still a technical solution, technical thing that if you’re not doing this every day, — and a new MSP, maybe that’s never used our, utilized our tool certainly — and therefore they may have questions. And so they say I want to talk to some sales person that could get me, and associated with a technical sales guy, I’ve got some question. That then goes from online into a distributor or channel or over our salesperson. So all of them are profitable. But you’re right. Some are more profitable than others.

Louis:    Well it doesn’t surprise me. I’ve heard that a lot that the channel is, has better margins than direct. So it’s not surprising to hear that from you. And it sounds like you’re not really pushing people to the website to online, that happens and you pick up those sales along the way. So there’s not really a big marketing push along those lines. But what about the kinds of marketing and other programs like co-marketing or MDFs or SPIFFs? What kind of programs do you have with the distributors and their partners?

Tony:     Yeah, so with the distributor obviously it depends upon the distributor and also depends upon the geography that distributor would be, because they see value in maybe some incentives versus others. We’ve tried a variety of things and I’m not sure we found exactly the perfect sets of programs. The one without question that we work with the distributors on are quarterly business reviews. They need to know where we’re headed, where our products are, and we need to resolve any problems that are there. And then any maybe larger opportunities we need help with them directly. So the QBRs a very formal kind of process we work with them.

From a marketing standpoint, we may partner with them to talk about working in finding new partners. So if you find new partners that have never done business with BitTitan, we may provide a SPIFF, an incentive, an MDF related to that. We tried it in most of the geographies. Sometimes it works, sometimes it doesn’t work as well. I’m a believer, I’m not sure everybody in the organization, but I’m a believer that you want to do this to set the goals, set the very clear goal if there is for a distributor. And then let them figure out how they accomplish that with what sets of salespeople; it could be a number of orders, it could be a number of new partners, it could be frequency of sales. So maybe you’ve got 50 MSPs that work with you, but maybe 40 of those have not transacted with you for BitTitan in the last six months. So let’s do something related to getting those people back looking at us, considering us, and there may be some incentive related to that. So really trying to be very targeted as to what we do with a particular distributor.

And again, geographically then it’s translation related to where that may be in the world that’s important for them. The right sales/marketing materials, we provide that. So it depends upon the distributor or what kind of program we have. But we stay in communication. That’s why we have increased our channel sales managers significantly nine months ago, so we could start doing that and figuring out what we need to do for them to help them. After that, they’re good, they’re really good, and they take it and run with it. So long as we’ve done our homework and we’ve trained them well, we’ve trained and been very clear, provide a great value proposition for them, emphasize that, maybe tested them, provided testing if you will, and distributors want to do that. Provide testing of their employees that they know what BitTitan is and can sell it. And if they can than it works, it works very well from that standpoint. So I think we’ve done pretty well in that area to keep the ball rolling to get some of the new partners and increase the frequency of sales as well.

Louis:    Jay McBain, who’s a Channel Analyst for Forrester, was on the podcast recently and he said he thought that channels had changed more in the last 18 months than in the previous 30 or 40 years. He thought that channels were undergoing a huge transformation. Are you seeing that? Is that affecting your business at BitTitan?

Tony:     Yeah, so I’m going to compare it — it’s interesting Jay said that — I’m going to compare to 15 years ago. Because that’s, I think I mentioned to you, that’s where I was running the channels business, ISV and SIs and other channel players there for IBM for one of the segments of software they’re selling. And that was 15 years ago. And I’ll compare it to what I’ve seen since I started to now. It is a completely different business. What has transpired in the last 18 months — I’ll go to currency — in the last 18 months is one of the most important things, Louis: Yeah, you’ve got to have a product. Yes, you’ve got to have communication with partners. But you need to have the systems, the backend systems working very well. The APIs there so you can process orders, you can inquire about products, you can get the right price list, you can sell off of a current price list, current discounted volume price list. All that needs to be there. It’s not a matter of any handbooks or calling up someone for a quote or involving a salesperson at BitTitan. If you don’t have the right technical connection to process orders, to make that work, then you’re behind. You’re not going to be a partner, you’re going to suffer greatly. And we have spent a lot of our resources on being sure we’ve got that. We onboard, that’s part of the onboarding process with any new partner. We finished off. Certainly we’ve had the major partners that have onboarded with us that way for quite some time. But any new partner, any new distributors come on, we’re connecting them so it makes it seamless and we just do our job in terms of education, training, maybe new contracts, that type of thing and we turn them loose.

And then everything, if you will, the back office works efficiently and if we didn’t have that working, they just don’t do business with us. CloudBlue is one of those we’ve just in the last nine months signed up through, through Ingram, that is going to provide tremendous opportunity for us because of CloudBlue’s reach through Ingram to their partners, specifically the Telcos, telecommunication companies. And that is a significant way to support the partners. That to Jay’s point, that was not there 18 months ago. If it was it was rudimentary maybe in one country, maybe only in the Americas, whatever it may be. That has significantly changed I’m sure in 18 months it has for us in the last year.

Louis:    Yeah. He also mentions marketplaces. And I know Ingram has a big marketplace and AWS and others. Azure has one, you know, that more and more software is being sold through marketplaces and you know, with no human interaction at all.

Tony:     Yeh, for us, we don’t see that as a significant part of our, let’s say, revenue opportunity or revenue stream today. Because with a technical sale as a tool, a SaaS-based tool to do migration, I’m not so sure that the marketplace is, it’s available, it’s available to MSPs, certainly they do that. But I think there’s a little more discussion and interaction — what about this? — that occurs than having an Office suite available and everyone wants email and a PowerPoint kind of, graphics tool. That could, I think the marketplace takes over there. For us either they’re going to go online through the website to do that, or I think they’re going to transact something with, someone’s going to tell them How does this tool work. Why does it work that way? And there’s got to be some discussion. So I don’t think it’s as easy as putting up your store shelf on a marketplace and then saying, oh, I want that SaaS-based tool from BitTitan. That hasn’t been a big, large part of our business. It’s available. But I think there’s more discussion for the particular projects that these MSPs are engaging in than utilizing marketplace at this point.

Louis:    Maybe for follow-up sales, maybe the first time they use it, they need a lot more, have a lot more questions. But after they’ve used it once or twice, then they might be more comfortable just going to the marketplace and buying it?

Tony:     Absolutely. Absolutely. And they do that. And we also have repeat sales through online doing that as well. So yes, through the distributor and online. Absolutely. Once the pilot’s done and they’ve done it once, I like that. And they’ll go back for the second, third, fourth project. And they may, if the project’s similar, may not involve really anybody, touch any human, and they’ll just go back and order. Because the MSP has that type of relationship with the distributor for us.

Louis:    So what should I have asked you that I didn’t? What keeps you up at night?

Tony:     You know, one thing prior that just as different folks will listen to your podcast here. One thing that I learned over the years and with a number of years in sales that I have and working with the channels: I’ve got failures and I’ve got successes. I certainly have scars from prior times. And one of those scars that I have avoided here and I’ve done it very specifically and I’ve had discussions with finance and others on this, is channel conflict. And we have taken great lengths to avoid channel conflict at BitTitan. And we do that Louis because, again, I’ve seen it before that if you tell a salesperson this is how you’re going to get paid, they are going to go optimize their activity to get every transaction in they can according to that incentive plan. And if that then says, I’m not interested in the distributor, I’m not interested in online, I’m not interested in anybody but myself, I’ve got to do it because that’s how these people, this company are going to pay me, it can create channel conflict. And I’ve done that before, been there, done that.

So at BitTitan, I want to be sure your listeners maybe know from a conflict standpoint, it ended up being fairly easy for us. So we have as I mentioned before, we may find opportunities, we want to pass those through a distributor.  The distributor may have something that’s very complex, large opportunity, they need help with it. They will call their local sales director or salesperson, account manager, and work with us. And we do that because we put an incentive plan in place that allows that to occur. So we are paying on the transactions of our salespersons involved but the transaction ends up with the distributor or the distributor fulfills it. In that case, not a problem. That’s good stuff. That’s good. And we pay the salesperson for that.

So it’s not where they’ve got to keep it from origination of opportunity identification, or with your closure. They can pass that distributor or they can go work on another opportunity. And it’s pretty easy here, not get too detailed in incentive plans, but a relative sales plan and based off of a quota, just put the right quota in place and you can accommodate that without paying twice on every transaction. You don’t have to do that. But you set the quotas correctly, you set the incentive plan correctly, that you eliminate I think the channel conflict that some organizations have. It again, it contributes to why that channel for us, the distributors are 35% or so of our business. Growing the fastest of our business. Because our salespeople realize if the distributor can take the opportunity, can take that transaction and they can close that transaction, that salesperson can go work on a transaction 5 times, 10 times that while the distributor is handling the run rate, the smaller transactions that still make up 35%, 25% 40% of their business and it’s a good working relationship that way. So maybe that would be one thing I would add to the discussion we’ve had today would be probably an important part of that.

Louis:    Yeah. And I’ve actually, that’s interesting that you mentioned that because I’ve actually heard that from a few other companies too. That they’re really getting their incentives and commission structures and so forth right for their sales team to work with the channel and to know that they’re going to get compensated however it closes. So they’re not incenting channel conflict, but they’re incenting channel cooperation.

Tony:     Correct. That’s right.

Louis:    That makes a lot of sense. So, you know, we were talking about how rapidly the business world is changing and the channels. So how do you keep up? Are there particular podcasts or blogs or events, websites, books, other ways that you’re keeping up with the industry?

Tony:     Yeh, via the travel. I tell you what I do, I do travel a lot. There are many, many conferences I go to. And in our industry, the business I’m in now, conferences actually are very, very helpful for us. Not just for contacts and leads and to be sure people know about our products. But I learn, I learn extensively at these conferences. Microsoft has their big called Inspire event in July in Las Vegas. I will obviously listen to customers there, but I will go around to other booths, some are adjunct and sell with us. I’ll learn what they’re doing, what’s new. I will hear from customers there as to what we don’t have that type of thing, but I spend a lot of time with them. I spend a lot of time with Microsoft. I spend most of month in the Seattle area, our office headquarters in Bellevue. We’re 13 miles from Redmond headquarters for Microsoft. I’m up there a lot.

So between Inspires, Microsoft’s Ignite, other conferences that are put on.  Google Next, which was on the West Coast about a month ago now. I will spend a lot of time there. I find I learn more by talking to my distributors at these conferences than user customers. Looking at some of the vendors, talk to them sometimes, I’m in round tables with them. We sit and I listen there. So I’m not spending as much time on podcasts and other medium at this point because I’m still learning and I love to learn that way directly and I ask a lot of questions. Everyone in my sales all-hands call, I will have a customer or an MSP, a distributor on and we have a fireside chat, an interview. I’m asking them questions, things I want to know, things I think the sales team should know, I want our sales team to know. And so I’m constantly having them.

We had a global sales meeting in January. I had six different customers, distributors, channels, a channel distributor there. We’ll talk to them. So I’m learning that way Louis. It’s probably not the most logically put together way I learn, but it keeps me up to date on what’s new. What I need our product development organization to build, what’s the priorities we should have, where opportunities are. I got back about three weeks ago from Asia. I was in Tokyo and in Singapore. What an opportunity we’ve got over there. And we just scratched the surface in a country like Japan. So I see a lot of opportunities there and we do most everything through two distributors in Japan at this point. We’re looking at a third distributor. But we do most of our business through  distributors there. So I learn a lot from them. So that’s what’s keeping me up, and I think I get a good cross-section talking to our distributors and other channel partners and end-user customers as well.

Louis:    That sounds like a great way. Nothing better than being out there talking to your customers and partners. Does BitTitan have a conference of its own?

Tony:     We did apparently. Let’s see, this is 2019, so in 2017 we did. Had a pretty good attendance. But we decided in 2018, by the time I came on board a year ago this time, they looked at it and tried to decide what should we do. And we decided at that point, a little bit maybe my input as well, we decided to invest more in our partner conferences than our own. So we decided, No, we aren’t going to do that. So we have not done that and we don’t do that. But now we’re able to display and be involved in more of our partner conferences. There’s always going to be more than we can be involved in. Sometimes a very small presence, sometimes a major presence. We like to keep growing that presence at these conferences. So that’s where we spend our resources when it comes to, if you will, conferences. And we just thought that’d be a better use of our funds to kind of support our partners. So that’s what we’ve done.

Louis:    Okay. So how can people contact you?

Tony:     LinkedIn. Anybody can look, I’m only, I think maybe the only Tony Rummans on LinkedIn. Send me an invitation there. I’d love to connect with anybody there. tony.rummans2 at gmail.com. It’s Tony, T-O-N-Y and my last name R-U-M-M-A-N-S number 2 at gmail.com. But I would say LinkedIn is always the best. My email address is in LinkedIn profile. That is the best way, and then from their phones and text and anything else is always available. But that’d probably be the best way to get a hold of me.

Louis:    All right, great. And I’ll put that into the show notes. Those will be on our website, revenueassociates.biz/podcasts. So thank you very much, Tony, for joining us today.

Tony:     Louis. Thank you. Thank you for having me on. I appreciate it. Great questions. And hope I’ve informed a little bit more about BitTitan and your viewers as to what we’re doing in the channel and with our distributors.

Louis:    So if you’re listening to this on Apple Podcasts, Google, Spotify, or another app, and you found the podcast as interesting and useful as I did, please leave a review. That will help other people learn about the podcast too. Thanks for listening to the Software Channel Partner Podcast, and please subscribe and listen to future episodes.