Partnerships Unraveled
The weekly podcast where we unravel the mysteries of partnerships and channel to help you become more successful.
Partnerships Unraveled
Timm Hoyt - Transforming Business with a Partner-Centric Model
In this episode of Partnerships Unraveled, we sit down with Timm Hoyt, SVP of Global Partner Sales and Alliances at Sumo Logic, to break down why companies that prioritize a partner-first strategy see massive long-term success.
- How to shift from a partner-convenient to a partner-centric model
- Why a clear vision is critical for scaling global partnerships
- The hard financial metrics that prove partner-led growth is the future
- The role of AWS Marketplace in simplifying enterprise deals
- How AI and solution providers are reshaping the channel
Timm shares insights from his career-leading channel transformations at Sumo Logic, Druva, and PagerDuty.
If you're a channel leader looking to scale faster and drive revenue through partnerships, this episode is packed with insights.
Connect with Timm: https://www.linkedin.com/in/timm-hoyt-43a853a/
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Welcome back to Partnerships Unraveled, the podcast where we unravel the mysteries about partnerships, and channel on a weekly basis. My name is Alex Whitford, I'm the VP of Revenue here at Chanix and this week I'm very excited to welcome our special guest Tim. How are you doing?
Speaker 2:Hey Alex, Great Good to be here. I'm looking forward to pulling on that string and unraveling some topics.
Speaker 1:Yeah, absolutely. Maybe, for the uninitiated Tim, you could give us a little bit of a rundown of who you are and where you've come from.
Speaker 2:Yeah, absolutely so. Tim Hoyt is my name. My background has had the opportunity over my career to work at a variety of companies, ranging from data center storage and networking to software and SaaS companies and cybersecurity and backup. That has been comprised of publicly traded companies, venture-backed, series B and beyond, and then also now the current company, sumo, getting my first rodeo experience with a private equity-owned organization. I've had the opportunity to work and live in the United States, in Europe, a lot of time in APJ I'm a father-husband friend and then a channel chief second, and then my role at Sumo, where I've been here for just under three years as the SVP of Global Partner Sales and Alliances. We own all that business that is germane, I think, to your audience right. So all of our channels around distribution and resell and solution providers. We have our service providers and managed service security partners, system integrators. So the globals, the regionals, the federals, and then we also have strategic alliances, which includes a big partnership with our cloud service provider, aws.
Speaker 1:That sounds complicated, tim. That is quite literally all channels in all markets, which means you must never sleep. I think that's probably accurate For someone who I know. Both at Sumo Logic but also at previous companies. In Pagetiti and Driva, you helped drive a change from let's call them partner convenient to more partner centric. Talk to me about some of the systemic changes that you make to drive that transition towards a partner first motion.
Speaker 2:Yeah, I mean, I've had the opportunity, it's been great.
Speaker 2:And I'll tell you number one it doesn't happen without saying cliche, it doesn't happen without the team, both the working team and the partner organization, and then those cross-functional teams that all have to become a participant in this.
Speaker 2:And I think the number one element, alex, is the cultural change. Right, that is the most important and often the most complex or challenging, depending upon where that company is in their maturity cycle of embracing and working with partners. Right, as humans, we want to believe in a purpose, which is why I think the approach of having a vision is so important. Codifying that vision takes some time, right, you need to understand, particularly when you're new, understand the business you've joined, the history of that business, what's got the company and the people to where they are, what the future goals are, and then the individuals, right, the people and the personalities that make up that business. And once you have a read on that, then you can begin to formulate that vision for your part of the business, in this case, obviously, partner organizations. Building rapport and alignment on that vision with key stakeholders is imperative, and I find, once that vision is agreed to, then you can you know in terms of why we're doing this as a company?
Speaker 2:then you can build and co-develop these missions, right that are required by function to ultimately achieve that vision. These will be bilateral in nature, right? So there are things that you're going to ask of the organization or of that function, and they're certainly going to reciprocate and ask you to do things. You got to be ready for that and then, as that mission alignment is there, it allows us to get to the metrics, right, these are the markers that will monitor and ultimately measure to tell us if we're on track towards a successful mission, which then leads us towards the opportunity to achieve that vision and make that a reality.
Speaker 2:I think the second question is around besides culture is around system changes, and these are super critical to protecting the vision, right? They're the guardrails you think metaphorically to keep us on the road and not fly off around the vision mission metrics and driving that, efficiency and predictability and the how we get stuff done to deliver the what results the company is looking for, and examples would be changes in the CRM system, right? So hygiene phase gate controls, when and how partners are involved. What is the system of record that you communicate with, and have cadence and compliance with your partner community. So think partner portal for self-service, the ever-important deal registration and then incentive schemes, right.
Speaker 2:So what are those programs? To motivate the individual and a partner, as well as the leaders in that organization, to be an active participant in the journey. And I think, as these are all implemented, it's important to know that, much to our surprise, not everything goes to plan. So adjustments are going to be needed and I think the role in a channel chief, a head of partners, is, as a CRO, not to be mistaken with typically our boss, the chief revenue officer, but CRO is in the chief reminding officer, right, that is, you know why this will benefit the business, how it's going to, you know, make the individual in the company, whether they are a veteran or a rookie, you know, better off at what they're doing and achieving their goals and driving this partner first organization.
Speaker 1:Yeah, tim, I'm maybe traditionally someone who, if you talk to me about vision a couple of years ago, my eyes would have fluttered into the back of my head and I would have gone. It's all about rolling up your sleeves and, you know, just getting the good work done. Fortunately, from this podcast, I've spoken to loads of senior executives from different businesses, and I know a business that's close to some of the work that you do AWS.
Speaker 1:I remember being blown away because I spoke to different people who had never met each other within the organization who sounded the same, they had the same talk track, they had the same belief structure, they had the same frameworks and suddenly I had my eyes open to oh, this is why AWS do such a good job, because they have such a clear vision for how they are going to change the world. And then it's very easy for these little micro organizations to go and build value in the marketplace, to go and change behaviors, to go and change rule structures, because they have this almost baptized philosophy of around here is what we are doing to the market. And I can imagine, as companies get bigger and you have less one-on-ones and you have less touch points with different people, the requirement for vision gets ever more important.
Speaker 2:A hundred percent Right, you think about any successful organization or sports teams, Right, I think there's a great connected tissue between business, successful business, certainly in the thick of just pre-Super Bowl. I know, by the time this airs, you know one of the teams the Chiefs or the Eagles will be crowned. You have to know that your teammates, right, and business is the same are all, by and large, pulling in the same direction. Right, they're flying in formation and knowing things are not always going to go perfect. Right, they're flying in formation and knowing things are not always going to go perfect. Right, being grounded back to what is the purpose, what is the plan we have and how is that going to drive my daily, my weekly, my monthly, my quarterly actions and behaviors to achieve against that playbook or vision? And you're absolutely right. It becomes even more critical when you start to get a company that gets into the hundreds and thousands they're receiving, tens of thousands of people. It becomes super critical of when it's on or you know to what you're alluding to when it's off.
Speaker 1:Yeah, I think maybe that that it's an amazing sort of cultural thing. I think the thing that's also going to fascinate our listeners is a key part of you joining Sumo Logic is the senior exec team and the board decided to shift to a sort of partner-centric model. Now, they've not done that for sort of altruism, right. They've done that because there's some really hardcore financial cynical metrics that improve when you build a partner-centric model. Talk to me through that calculation. Why should businesses of Sumo Logic size go hang on a second? We are missing an opportunity to not build a partner-centric motion.
Speaker 2:Yeah, my experience has been in the tech sector so that's where I speak most comfortably. It probably translates or I know it does to other sectors. But for most technology companies there comes a fork in the road of continuing to invest a dollar in a single AE to get $1 million of growth. There's that ratio that's very common with your strategies and sales ops and CRO functions of okay, we plug in an end user team at 300K 250K per headcount and that gets us a plan to get a million dollars. As you start to drive towards scale it starts to become expensive to have that for every incremental. We know that not everybody is always hitting their plan. The other fork in the road is to embrace teaming with others to get to that promised land of more efficiently and effectively getting to the goals.
Speaker 1:And so.
Speaker 2:Sumo, when I joined three years ago, was not anti-partner at all. They worked with partners. It just wasn't a strategic part of the go-to-market motion and Sumo had an excellent product market fit, had achieved the stage and step goal of becoming a publicly traded company. And when that happens, the eye in the market, of investors in the public world are even more so on you to drive the KPIs, especially the beat and raise and ARR, the move towards profitability and, and you know, free cash flow and the efficient use of capital. And so I think these things are all happening in the board and elt executive leadership team at sumo of how do we get that next phase of growth, the desire to scale faster, to improve the win rate success. It led to the leadership team to say we need to make a change and go to market and start to embrace a partner-centric sales motion. And that's what largely attracted me in terms of the function to Sumo. That was only bolstered by the quality of the product, the tremendous leadership that was there, and it's morphed over time into even stronger.
Speaker 2:And we all want to leave our legacy and put our head in the pillow at night, thinking and believing and having the data to tell us. We're doing something to move the ball forward and contribute to a highly productive company return on shareholder value. And I think there's a great evidence. Not only my career that I see obviously most closely, but you know, looking at my peers and having a lot of connected conversations with them and just looking at macro analysts a partner first, a partner centered route to market is a smart way to drive that efficiency and effectivity. Yeah, I mean, the data is really really clear. A partner-centered route to market is a smart way to drive that efficiency, that CAF activity.
Speaker 1:Yeah, I mean the data is really really clear. In B2B there are almost no companies that do a billion dollars revenue per quarter that don't have a partner-first approach. It's really, really hard to build a model where you go yeah, we're going to go direct, because either you flood the SMB um, which is super automated and that's great and there's lots of value in there, but as you try and head up market, that requires more and more sales motion, or you're an enterprise first product and then you suddenly hit exactly what you're saying. Where you go. How do we break into Belarus? I think was the country we were joking about in the prep call.
Speaker 1:Oh, we need to hire an ae there and one in lebanon and one in mozambique, and you just go hang on. This is this is crazy, this is never going to work right. And so, whether it's by geography, whether it's by segment, you start to see that the cfo is almost enforcing a different strategy, because the unit economics just don't cost out yeah, absolutely.
Speaker 2:If you look at what the industry data tells us, like you know, one of one of the hottest spaces now and will be, I think, for the remainder of our time on this planet. It's going to be cybersecurity Right. Ninety four percent of all cybersecurity solutions are delivered through a channel Right. So you know, the data tells us that there is a there there.
Speaker 1:You touched on legacy, which I think is an awesome word, because I think, look, while we all love making money, we all like making a difference, I think what we leave behind is really important. You like a lot of very senior, very successful people. Some people took a bet on you, probably earlier than they should have done, and put you into elevated periods of responsibility, which I'm sure was painful, and you bounced off the sides. How did that trust in you affect your strategy in leadership today?
Speaker 2:Yeah, look, I think life is about belief in yourself, from you know. That's the epicenter of, I think, where success comes from the individual, but having a network of people across all facets of your life that believe in you, which includes the willingness to tell you the hard things right, which it also includes the best interest to push you beyond your comfort level and then be there to celebrate when there's success. You know I've been blessed in my life to have many leaders that helped shape me in that capacity. It all starts with my mom and my father and how they raised my brother and I athletically with coaches and teammates, but professionally, a key one related to this right. Early in my career I was encouraged and this is in my early 20s I was encouraged and challenged by the CEO of our company to take on a bigger responsibility. That candidly, at the time I knew and now, having a lot of rear-view mirror time, my CV probably didn't justify me taking on those additional responsibilities in the bigger role. But he believed I was ready for it. He had the belief in me and gave me sufficient support and open space to jump in. So the support to be there when needed, but also enough leeway to go, do what I thought I should do, make some mistakes, learn from those, and this was an accelerant to my career that provided me with some wisdom on leadership that I've carried forward 20 plus years later.
Speaker 2:As you said, business is clearly about delivering results, but I think the legacy we leave is equally about those results and what's on the scoreboard, but also how we did it along the way.
Speaker 2:Leadership is taking the time to invest into knowing your team and your colleagues and being an active participant in that journey, because this is a complicated, fun roller coaster of a journey we're all in generally in life, but certainly in the ever-changing world of technology, sales through ups and downs and empowerment is a byproduct of trust and it's difficult to have successful teams or in the world we operate in, those extended teams of partnerships, when there's not that empowerment encouraged and facilitated in those relationships. And so I think a big part of what I learned is be willing to invest the time, get to know the people and be bullish right, push people beyond their comfort zone and be there to support them so they know they've got a wingman, but don't be their shadow. Let them go and succeed and fail right and learn and start to produce and obviously that builds that legacy of you. Know how you can build the next wave of leadership that ultimately, one day you want to take your job right or you want to be working for them as they accelerate past you.
Speaker 1:Yeah, I love this topic. It's one of my favorite things to speak about on the podcast. You're obviously a big sports guy.
Speaker 1:My belief is actually, while getting sort of scores on the board is the name of the game, without that sort of long-term view in terms of building up the next leaders, it's actually impossible to sustainably put scores on the board right, and there's a reason that in american sports there's a salary cap.
Speaker 1:Right, because you can't just go and hire all the best people, because literally no business in the world can do that, and so you almost need to get outsized returns from undervalued and I mean valued monetarily people because you're giving them responsibility Maybe their CV or salary doesn't dictate to, but that's such a win-win right. It's a win-win for the individual because they get to cut their teeth on experience that maybe is above their pay grade, and it's a win for the business because obviously ultimately, when it works out for a year, two year period, you actually got outsized returns for the investment that you've made. So I always just I'm sort of fascinated because I sometimes think that we talk in terms of like business and we talk in terms of like legacy, almost philosophy. But I, I, more and more, I'm coming to understand that they're one in the same thing. Right, you need that vision as well as you need that strategy. They need to plug in together.
Speaker 2:Yeah, and I think it look. I mean loyalty, um, is something that some may believe does not exist in the workplace today, and while business is in the business of driving results and getting business, it comes down to the human level of loyalty, right, leader to team and vice versa. And I think, as things we're talking about is, you invest in the others and they're delivering on results. It's obviously good for the business and they're delivering on results. It's obviously good for the business, but that loyalty only makes the team and the productivity at that company better. And we all know that, by and large, right, our time at companies will have an end date and that loyalty that's there can then translate over to the next company. Right, that's there can then translate over to the next company. Right, and how?
Speaker 2:You know, I think one of the biggest testaments of a leader is when they're in a new role, without harvesting, right previous companies. Who is the loyal team and the individuals they can bring along to accelerate time, to value in that new opportunity? Right, because you've got loyalty with a cohort and you bring in some new talent. You're absolutely right. Right, it's not always who has the most experience on the resume, who's the highest paid. There's plenty of diamonds in the rough and you know we see that in business and we see that in athletics all the time, right In terms of the surprise, you know, low draft pick that produces well above. We're all seeking to find those people in our business to contribute and then, to you know, create something meaningful in this journey. We spend a lot of our waking hours and time on this planet right working, and so it is a job, it is business, but the more we can build that culture of loyalty and camaraderie, I think the better results. It is for the business and it is better for, you know, the human.
Speaker 1:Yeah, I completely agree, tim. So one of the things that is a buzzword, a philosophy, a focus of lots of businesses is marketplaces. They are wildly complicated and even more valuable if done correctly. I know that you work very closely with AWS. How have you seen marketplaces consistently change the operational procedure in closing enterprise deals, and what does that sort of frictionless approach or reduced friction approach, how does that translate into your business performance?
Speaker 2:Yeah, I think we all see, as consumers, marketplaces have made our lives more convenient and that's evidenced by the number of brown Amazon boxes that show up on my doorstep every day. But in the business side, I think they took some of that from the B to C and looked at the B to B and obviously Amazon and AWS had a market leading kind of view and capability there and it is important part of our go to market motion. We see customers being the driving force here. Right, they're making the decisions. Obviously, the marketplace providers are creating that space, creating the capabilities for ease of purchase, for management, right, but it's the customer who's driving that.
Speaker 2:As you look to simplify the procurement processes, particularly for software, how do they control shadow IT? So, if they're trying to put some standardization in place, how do they lock down people from maybe buying an adjunct technology that is not necessarily vetted or is duplicative? So the control mechanisms of procurement and the CFO and CIO and their associated teams and driving then also a big driver is the compliance with these large purchase agreements. Aws calls them PPAs, private purchase agreement. These are the multi-year agreements that a customer agreements that a customer makes with a cloud service provider in the total consumption of services, whether those are the native services or ISVs. Like us, that whole picture matters and what we're seeing in our business is when it's transacted in the marketplace it has a faster time to close. So again, I think you've got some predictability in the process of the customer and there are vetted technologies in there and we also see it often as a differentiator in the CFO's decision. Right, you could win the technical decision but lose economic buyer if you don't operate where that customer wants to purchase.
Speaker 2:So it is a complicated, nuanced route to market.
Speaker 2:In some ways it's getting cleaner every day from the marketplace providers and then it's created this ecosystem of marketplace enablers to help ISVs rapidly get on a marketplace drive, transparency drive, reporting, telemetry.
Speaker 2:So I think I'd encourage anybody who's just getting into marketplaces or is in there and is maybe struggling look at that ecosystem of enablers that are there that can help you do it faster. And even better if you tried to build that muscle memory in-house and maybe over time it becomes big enough where you want to bring that back in. And then the metrics we look at are deal velocities we said time to close the win percentage, how often we win when it's marketplace or non-marketplace, the subtleties you know in our world as a partner first organization and we treat marketplaces as one of those partner routes to market. But there's also all the what AWS calls CPPO, consulting, partner, private offer. This is when you know one of our shared solution partners, is in their delivering value and is part of the supply chain through marketplace. And then ultimately it comes down to what is the ACV and TCV annual and total contract values of marketplace deals versus non-marketplace deals.
Speaker 1:Yeah, and I think it goes back to the point I was making earlier. Right, In terms of true customer obsession. What enterprise businesses want is they want visibility right, they want visibility on what their tech stack looks like. They want visibility on what their cost structure is going to look like, and they also want to be able to transact and purchase the right product and the right technology efficiently Right, and I think that's the irony of this entire marketplace, which has cost hundreds of thousands of man hours and so much money, but it's just a full obsession around what's great for the customer. And the customer, ironically in this is actually three it's the end user, it's the ISV and it's the channel partner that's involved in there as well. Right, and so it's such a unilateral win that suddenly I can understand why everyone is double tripling down on. Okay, we need to make sure as much business is transacted via this vector as possible, because it's so beneficial to the entire stack.
Speaker 2:Yeah, no doubt. And the marketplace providers they see this as a compelling differentiator for them. They're trying to disrupt the distribution, classic distribution companies, and so they're putting carrots and sticks against those that tri-party, the customer, the ISV and that solution channel partner to all participate right through motivation or through some consequence if they don't. And so they're utilizing, I think, some of their strength to drive in that fashion. And again, I think, for the most part, it is really good for all three, right, when you understand it and you're embracing it and working together.
Speaker 1:Awesome, tim. Finally we have one more for you. I know you're seeing a shift from the classic channel reseller to a different type of channel partner, a more solution-orientated partner, a trusted advisor. How do you see that changing over the next few years?
Speaker 2:Yeah, I think it's just going to continue to accelerate for a variety of reasons, influenced by a couple of things. Number one is you have classic bellwether channel solution resellers that had made their reputation on product availability in terms of access, the time from order to delivery and then streamlined margin or cost management for the customer via that partner. And I think, as the world of cloud and digital transformation has been our journey the past 5, 10 years, you've seen a lot of these megas start to transform. You've seen some boutiques get acquired by these megas to help bring in institutional knowledge and capabilities to accelerate that. And then you've seen green shoots of companies that have come out in the cloud-native kind of modern era and start to fill some of these maybe gaps that were there from the megas not seeing that, but all are rapidly moving in that direction to meet the customer's needs of today and tomorrow.
Speaker 2:And then, it goes without saying, you know macro trends, particularly artificial intelligence and all the things that are going on there, both delivering AI-oriented solutions as well as leveraging AI as a channel partner to streamline, to become more efficient. We're in the very, very early days and, as we saw this week with some announcements from some AI vendors. It's the Wild West out there in terms of what's happening, but I think a big, big part of it is getting out of this kind of noise of AI and how does that translate into something that is actually delivering business value. Delivering business value right when I talk to a lot of our partners and inquire to them where are you having the most conversations with your customers?
Speaker 2:Much of it still is in the heartbeat of network storage compute is of cloud migration, digital transformation, and then there's a boardroom at every customer conversation happening of how are we going to use AI right. So these solution providers are in a great pole position spot, accompanied by partners like AWS, who's clearly innovative in that space, and then ISVs releasing what we call MoPilot is how do you take what would be an idealism of let's just do something AI and actually have that be a business case and a customer usable solution that is demonstrating some return on investment? And I think this is a challenge. But with every challenge there's a tremendous opportunity that solution providers themselves are modernizing and how they utilize, how they evaluate ISVs and then these new and emerging AI-centric companies to then bring that into enterprise and ultimately down into mid-market and SMB enterprise and ultimately down into mid-market and SMB. It's a wonderfully chaotic time that changes nearly every week, but that's what keeps us sharp, right those things. Changing sharpens the knife and allows us ideally to do our best work.
Speaker 1:Yeah, I wasn't well, I was, but I wasn't sentient, basically. But it feels a lot like the sort of dot-com boom right when it's like oh my God, there's all. This stuff is changing so rapidly and I think what is particularly challenging for customers, but also for vendors and for partners, is to differentiate between the AI businesses which are, let's say, fluffy and the AI businesses which are providing real core value and they really understand the sort of market potential and how they're changing, which I think is just exciting to keep the finger on the pulse on.
Speaker 2:Yeah, I mean, look, I think we've seen a number of tectonic technology shifts in our group. We've got a couple of great years, as both of us to recall those. But one that still stands out to me is you think about the virtualized server world. There is this panic that, oh my gosh, we're going to have virtualized servers. We're going to see that decrease the necessity for customers buying servers. It had the absolute opposite effect in that right. It had the absolute opposite effect in that right where, as that technology made it more viable, more cost effective, open to out through who survives, you're saying in terms of dot-com, peak and bust, two gets acquired. But there's some clarity that I think AI is going to be an accelerant of so much efficiency at customers. It's going to kick off so many different new companies that are adjacent and empowering AI as an example that this is an exciting time to be alive and be part of this industry 100%, Tim.
Speaker 1:Well, just like marketplaces require some trusted advisors to grease the wheels, so does Partnerships Unraveled. We always like to get our current guest to shout out who our next guest should be. Who do?
Speaker 2:you have in mind, Tim. There's a lot of people and just looking at the folks you've had on this series, there's a lot that have already been in there that I'd recommend, but I think there's one that would be interesting. It's a gentleman, Josh Green. Josh has operated as a solution reselling leader at big companies like SHI and SoftChoice. You know growth four or five years ago into where it is today and has recently taken a new role over a tremendously successful ISV called Okta, leading all cloud services providers. So I think he's got a history and a perspective that might double click, triple click on some of the things we talked about today. That would be even more valuable for your audience.
Speaker 1:Awesome, tim. Well, josh, we're coming for you. Thank you so much, tim for sharing your knowledge today.
Speaker 2:Yeah, you bet, appreciate the time.