Partnerships Unraveled
The weekly podcast where we unravel the mysteries of partnerships and channel to help you become more successful.
Partnerships Unraveled
Alan Butler - Building Channel Buy-In from the Inside Out
In this episode of Partnerships Unraveled, we sit down with one of the channel’s most seasoned transformation leaders Alan Butler, VP Global Channels & Alliances at OpenText, to explore what “good” really looks like in channel strategy. With a career that’s spanned Sun Microsystems, Dell, Adobe, and now OpenText, our guest shares a rare perspective on what it takes to build, scale, and integrate partner ecosystems that last.
We dive into the foundational elements of partner success - from startup grit to enterprise orchestration, including:
- How Dell flipped its revenue model from direct to 50% indirect in just five years
- Why internal alignment and executive education are non-negotiables in channel growth
- How to handle M&A without losing the DNA of the acquired partner ecosystem
- The make-or-break role of finance in proving partner value from day one
- Why most partner advisory councils fail and how to build one that truly drives change
- How to balance short-term targets with long-term investment in emerging partners
Whether you're building a channel from scratch or trying to realign a legacy motion, this episode delivers field-tested insights from someone who's been at the helm through it all.
Connect with Alan: https://www.linkedin.com/in/ab530/
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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 Channex and this week I'm very excited to welcome our special guest Alan. How are you doing?
Speaker 2:Good thank you and pleased to meet you again and looking forward to the conversation.
Speaker 1:Yeah, you've had quite the career and experience sort of that hyper growth that everyone wants to go through through one company for a long period of time. Maybe you can talk us through the highlight reel who you are and what you do?
Speaker 2:That's a loaded question. So I'm Alan Butler. I'm a long time in the industry and grew up in the industry in the Bay Area, frankly, with a startup called Sun Microsystems. I had 17 roles and 22 years at Sun. I'm proud of it and we're a family in a tight community and Sun has gone to Oracle for over a decade now, but we are and the Sun alumni and Sun community is probably across all the major companies and heavily influencing a lot of the startups and heavily involved in a lot of AI stuff today across the board, frankly, and so it was a great experience for me there and nothing but great memories across the board and then, beyond that, have moved on to other larger firms and smaller firms alike, from Dell to Adobe to Red Hat and startups, various stages and sizes, so it's been really exciting.
Speaker 1:Now, what I found interesting about your background is you've done indirect, you've done direct, you've done indirect, you've done direct, and I often find that some of the sort of best channel leaders have sat on both sides of the fence, because I think it gives a sort of unique perspective in terms of what partners care about, because they're obviously from a partner's perspective, they're a direct sales organization. How did that foundational experience shape your views in terms of building a successful channel ecosystem? Great, great question.
Speaker 2:A successful channel ecosystem? Great, great question. When I joined Sun, sun was a already it was a startup at the time and it was a $24 million company, but Sun was already doing direct and indirect business, right, and this is back in the mid 80s, right. And so I learned on the job on what good looks like from the ground up, if you would, and through the history of Sun, it was always a hybrid of almost like a 50-50 between what's direct, what's indirect and it worked really well and other firms that went on to. Ever since then, whether large firms or startups alike.
Speaker 2:I've seen different variations of this, but I keep on going back to what good looked like, so you don't have channel conflict with your sellers in the field, your direct sellers, and that they get the opportunity to lean in for the goodness of what the partner community brings to the table and so forth. And I I seen this firsthand where we helped um change how dell went to market. When I joined dell 2010, 2011, it was mostly a direct company and, uh, five years later, over 50, and this is about a year before the acquisition of dell emc. Um, we had uh, of course, it takes a village that takes a lot of people um all of a sudden within five years, 50% of Dell's revenue is indirect, globally right, and it has maintained that ever since.
Speaker 1:Yeah, I'm always sort of fascinated we actually had Chad, who runs North American Channels from Dell, on the podcast also sharing that journey and I'm always fascinated in terms of why businesses at some point start to do a blend approach and then start to do a partner first approach. Maybe from your experience where you've gone through that a couple of times. What is it, what are the market forces? That sort of dictate, that change from we're going to do one, we're going to do both and now we're going to prioritize indirect change from we're going to do one.
Speaker 2:We're going to do both and now we're going to prioritize indirectly. Yeah, I think it starts with what's your foundation for how you measure and build a partner ecosystem right? And do you have the right goals and metrics in place to be able to do that and scale it right? And I view it as the audience initially is internal executive management right To those that are believers, it's reconfirmation for those that need to be encouraged or educated on the benefits. It's about having a metrics-based model that demonstrates where we are with doubt partners and where we could be with partners if we do the right things and put the right things in place.
Speaker 2:And then the second wave to that is demonstrating a kind of a crawl walk run approach that says you know what, if we do this, here's how we measure it, here's what good looks like and, if it's successful, here's our incremental benefit as a technology company in this particular case and here's the partner's benefit and here's the customer's benefit. And I think we always have to keep the customer in sight and in mind. Um to to do that, and I why I mean by that is also internally and I bring up internal intentional right we have to do internal selling to the benefits of the partner ecosystem, including the fact that if they don't deliver, we don't pay, so it's incremental business and it's a real bottom line impact on the op-ex and the cap-ex of our own company, when you think about putting scale and more resources in the field in the form of partners as opposed to direct sales only.
Speaker 1:Yeah, you're always. Whenever you're building a channel or an indirect motion within a business that has a direct historic background, you're building it on two fronts right and I actually think you're correct. The important front is the internal one, because if suddenly you can get your AEs to go, it's easier for me to make more money, hit target more consistently, hit my quota more effectively If I work through partners. Suddenly you just doubled your remit, you just doubled your channel team right, and suddenly you can start to orchestrate and architect how to build growth far more effectively. And I see so many people kill nine months of work, 12 months of work because they went and built a partner and then they took something direct because, hey, maybe the communication wasn't clear, they didn't know the partner was already involved and suddenly we just wasted 12 months of work for no reason.
Speaker 2:Absolutely, and the internal selling is critical. In my mind, it's really, really and at all levels, by the way. So you've got to do it tops down. You've got to do it bottoms up, you've got to do it in the field, outside in, as well as incorporate inside out. You can't have our partner community internally right or channel partner community if you would create something, lob it over the fence and just think that it's just going to land in a perfect way. You got gotta shape what the marketing team does, also with our partner community and with our field, to make sure that the direct sellers which includes the technical architects, not just the sellers right on the business side right, which are critical, that they see this as incremental benefit and not incremental risk to their day jobs.
Speaker 1:And one of the things that then makes channel really interesting, complicated, brutal sometimes. Then M&A lands right and so you've got a vision, you've got a process, you've got a culture and then suddenly we've got to bring in another company, We've got to understand their product, go to market, We've got to blend two cultures, two channels, two partner sets. I know that's something you're going through today Open text and integrating micro focus. Talk to me about how you tackle that opportunity.
Speaker 2:Yeah, you know, it's not that one side is right and the other one is wrong or vice versa. It's more about what's the value of better together. Vice versa, it's more about what's the value of better together. And when any company of any size acquires the other one, it is critical to understand what did scale look like for the company that was acquired and how did the new acquiring parent company not lose some of the key benefits of why they acquired them in the first place? Obviously, there's technology, there's IP, there's existing market share. That will be part of it. But there's also the ecosystem that helped it get to where it is good, bad or indifferent.
Speaker 2:And I've seen that with Sun for many years through a number of major acquisitions, small and large, really. I've seen it with Dell acquiring Force 10 networks from a network point of view. Seen it with you know, opentext for Microfocus, right to your point, right and many other companies like that. And it is about making sure you take the best of what works, bringing it to the market and not losing it, and getting those lessons learned culturally to integrate into the new combined entity if you would right, and otherwise you know, otherwise it's a missed opportunity yeah, I uh, a mentor of mine, um, when we, when I've been at a company where that went through m&a, um, he just spoke a lot about it.
Speaker 1:It's about winning the middle right. There's going to be a third of people who are really excited, a third of people who hate the idea, and the greatest businesses in the world I'm going to call that Cisco as a company that has really built sustainable growth on. How well do you acquire businesses and integrate those businesses. It is that winning the middle right. How do you get that middle 33% who aren't sure is this going to be good, is this going to be bad? And how well companies can win the hearts and minds of those people. Then you can start to enact some real change. You've been instrumental in some of those winning of hearts and minds.
Speaker 2:Talk to me about some of the tactics that you've used to bring people on that journey with you you know, um, I think you, I think you have to operate in kind of one leg in corporate and one leg in the field, um, and the field doesn't just mean the external partners for confidence, for what they need, but in external, you know, the or field sellers, in the field, if you will right, management and reps alike. Um, that's a day job. That's every day, every week, every month and that's an ongoing that doesn't stop. By the way, if you do it well, the best thing can happen is you're going to get complaints from your own field saying how come your partner team is not with me more often than less? Often, then they're seeing the value.
Speaker 2:If you're not doing it well, they're going to be complaining about why someone from the partner team is sitting in on their staff meetings or on their pipeline calls, frankly, ambulance chasing and trying to look for something to latch on to, to claim success without being seen as an integral team player and team partner proactively. And I've seen both examples of that multiple times. And so, um, known and seen what good looks like. Um, you know there's only one or two ways to do this right. I think there's probably 100 ways how not to do it. I try to avoid 100 ways as we shake every time the one or two ways to do it right.
Speaker 1:And so you've worked in environments of real scale right Really the biggest of the biggest and worked in channel organizations, but also worked in fast-moving startups. What are some of the differences and approaches that you see in terms of how you build a channel effectively?
Speaker 2:for that, I don't know 50 million business as opposed to that multi-billion dollar organization you know, my style and my approach is that we're always in a startup mode, because I think, if you forget the startup mode the startup mode of which son was the startup when I joined and I've been involved in a number of startups since then okay, the startup mode means you're looking for results that matter and then move the needle and you can measure it from day one and then you can follow up, proving the results from multiple vantage points if you would internally and externally, on an ongoing, sustaining basis, and so I think operating and staying in a startup mode is critical and, of course, as you know, that evolves in terms of what does scale look like and what does systemic processes and tools and know-how mean as firms get larger or if they're larger already.
Speaker 2:Dell was not a startup. When I went to Dell, it was a massive company already, but from a part of an ecosystem, with the existing leadership at Dell and a number of us that came in at different levels in the company, we were operating in a startup mode very deliberately, including the system integrator business and so forth globally, and that made a big difference. But having finance on board, in my opinion, is really really important internally, and not everyone does that, and I like to have finance on board from day one, because then you've got measurements no one's going to argue with, because then you've got measurements no one's going to argue with right and um, and and then they will help reinforce the process elements that are required.
Speaker 1:Also, awesome um, lots of vendors talk about partner advisory councils. Um, I think, uh maybe this is my slightly cynical, uh mindset I think most partner advisory councils are a complete waste of time because the feedback isn't actioned. And then you're actually better off not doing the partner advisory council in the first place, because the thing partners hate most isn't a bad channel program. It's a bad channel program that they fed back about that nothing happened. How do you ingrain culturally the importance of taking partner feedback and actioning it?
Speaker 2:you know it's, it's, you're spot on, which is your sentiment. In so many ways, um, the only thing worse than having a partner advisory board that um is maybe not built right or, for any reasons, not managed right is to go to any one meeting and then come away with feedback and then nothing for quarters, years. What have you and, to your point, the partners have fed back in different forums, either individually or collectively, in things that they need to see change from the vendor. It's an example of if it's done right, it can be extremely effective and it can create an environment that will allow for further development of relationship. That says trust us, we're going to do something about it this time and we're not just going to, you're not going to hear crickets and nothing's going to happen right. We're evolving that today in our own company and I've seen it work really well.
Speaker 2:A number of the firms I mentioned earlier have that in place for quite a number of years now and it works very effectively when it's done well and I think there's a lot of industry best practices to just take from this.
Speaker 2:That says you don't have to reinvent a new wheel, you just have to make sure the wheel you have works right and is efficient and is seen as a mover of the needle to get a trusting environment to the table.
Speaker 2:You need it for partner advisory boards, for relationships, you need it for product advisory boards, you need it for customer advisory boards. And I like to use my Rubik's Cube analogy of you know, people think they see one side of the Rubik's Cube and that's the picture, and then they realize, oh, it's multidimensional, and so forth. Well, the analogy I like to live off of is the real Rubik's Cube looks like this and you got to connect the green dots right and you got to know where to move them, and so relationships and trust is a multidimensional factor. And, by the way, this is not a prop for this thing. I have these every day. I use them every day, um, and I've had them for years because it's a complicated relationship to get these things going and there's more than one side to the rubik's cube, right so part of building a high performing channel is look, there is some top partners they do really well.
Speaker 1:And then there's your long tail. Both are valuable. Right, you need a scalable amount of run rate revenue that keeps your cfo happy. No one wants to be at 20 percent of target at the end of with two weeks to go and we're relying on three or four enormous deals to take us there. That gets everyone nice and stressed. So run rate revenue is important. But top partners, who do that 80% of revenue they're also wildly important. And part of building a channel that's going to be successful not just this quarter or this year is making sure that you are finding the partners who are going to make their way into that top tier and over-investing in them in the short term so that long-term the investment pays off. How do you balance the requirement to hit target now while allocating the resource and the investment structure into those partners who aren't quite there yet?
Speaker 2:You know it's a spin and plate analogy, right. You've got the spin and plates going on and you've got multiple in the air at the same time. And you do have. It is a struggle and it will always be a struggle. I don't think there's a shortcut to it.
Speaker 2:It's also equally important to not just keep the partners you have. The proverbial is easier to keep a customer and cheaper to keep a customer than it is to lose one and find a new one, right. Same is true with the partner ecosystem. Okay, um, partners are trained to know your processes, to know your style good, bad or indifferent to know how to get results, despite how good or not good your program is, and your engagement is in the first place.
Speaker 2:Having said that, it's also important to look at the partners that you've done business with a year, two of a year ago or three years ago that may have gone away. They've got choice. You don't. Your choice is how many partners, but you have to sell what's on your truck, if you will, right as a product technology company, and it's important to go back and look at who were the high flyers of the past and what does it take to reignite those relationships right. What does it take to get them back in a prioritized fashion on your truck so that they're now leaning in again when they may have gone away for one reason or the other?
Speaker 2:But it's important to understand that those partners by default have choice. Those partners by default have choice. They can go with you, they can go with your competition and we have to be selling to our partners as we help them sell to our mutual customers on a going forward basis. It's not an easy task, but you've got to keep the proverbial sides of the Rubik's Cube in flight, because each side of this are very, very important.
Speaker 1:I completely agree, alan. I think the value of building the channel is the long-term scale right that we can generate. But no one is keeping their job for two years by missing eight courses in a row right, and so we've got to balance short-term priorities and long-term outcomes, and I think that's what the best channel teams and the best channel leaders are aware of is how do we find time in our week, in our quarter to do those future investments while maintaining quarterly sort of infrastructure and performance?
Speaker 2:Yeah, and I believe that to do that you have to be in the field. You can't in any kind of a partner leadership role, you can't operate from the proverbial headquarters kind of thing. You've got to be in the field, you've got to be seen and of course you've got to balance that. You can't be out in the field all the time either, because you'll get nothing done. So you have to juggle the challenges of what does it mean to play your corporate role and headquarter role, if you will, versus what does it mean to be in the field, both with the partners, with your organization and with the sellers right, the direct sellers, not just the partner sellers.
Speaker 1:Yeah, completely agree, and, alan, thanks so much for sharing your wisdom. It's been awesome.
Speaker 2:Great, my pleasure. Thank you very much.