Vancouver’s Peer 1 Hosting (TSX: PIX) has launched a channel sales division that brings its referral and reseller programs under one umbrella, as the once direct sales-focused hosting services provider aims to grow its channel revenue.
Launched in 1999 primarily as a colocation services provider, Peer 1 has since expanded its footprint across North America and also to Europe, serving over 10,000 customers and focusing primarily on the small and medium-sized business (SMB) market. It now offers managed hosting, dedicated hosting, colocation and network services via 17 data centres.
As Peer 1 has grown organically and through acquisitions, it ended up with siloed channel programs for resellers and for referral partners in its different solution segments said Lee Hadsock, worldwide channel manager. It launched consolidated but separate programs for reseller and referral partners in September 2008, and decided to bring them both together in one integrated program last November.
“We learned we really needed to simplify and make it easier for partners to work with us,” said Hadsock. “So we created a single partner agreement that allows partners to resell or refer their customers to Peer 1, which ever works best for them, instead of having to change their business model to work with us.”
That was followed-up with the recent launch of a dedicated channel sales division at Peer 1, to provide better support to partners and enable the company’s goal of growing its channel business from 20 per cent of revenue today to 50 per cent within five years.
The division will be adding a number of partner enablement tools and offerings in the coming months. A partner portal will launch in May that includes integrated deal registration, a partner relationship management tool to expedite backend business processes, and online tool kits. The portal will also support a partner training program slated to launch in fiscal 2011, at which time Peer 1 also plans to launch MDF and co-marketing programs.
“We want to maximize our channel revenue through the support of our channel sales team, and with these improvements we’re striving to drive more revenue through the channel,” said Hadsock. “This is definitely a change in direction for Peer 1, which was a direct-focused company.”
The Peer 1 partner program offers four tiers: Bronze, Silver, Gold and Platinum, with annual partner revenue commitments ranging from none on the entry-level Bronze program (aimed at the casual partner) to US$5000 on Silver to US$30,000 on Platinum. Gold and Platinum partners must also commit to annual marketing campaigns.
For referral commissions, Bronze partners get a one-time commission of 50 per cent of one month’s revenue. Silver and Gold partners get five and ten per cent of monthly recurring revenues for one year respectively, while Platinum partners earn a 10 per cent “Evergreen” commission.
For resellers, discounts range from five per cent of revenue and 25 per cent of setup for Bronze up to 20 per cent of revenue and 100 per cent of setup for Platinum partners. Lead generation is reserved for Platinum partners.
“We’re looking for partners that offer complementary products and services to our own,” said Hadsock. While the Bronze level allows for many casual partners, as the program evolves he said the goal is to favour quantity over quality, with an 80-20 approach that will see the most revenue coming from, and attention going to, the top tier gold and platinum partners.
Peer 1’s Canadian channel manager, Tamara Backus, said Canadian partners will be well served by the company’s newest data centre, and it’s third in the Toronto area, which opened in January. The $40 million facility is the first that allows Peer 1 to offer colocation, dedicated hosting and managed hosting services under one roof.
“This new building gives our partners the promise that we’re in the marketplace and investing in our clients’ futures,” said Backus, adding with all three services available under one roof from the same data centre, “partners can refer their clients and not be pigeonholed into any one offering. Some clients need one, or all three, and now they can deal with the same people they’re used to dealing with in the same data centre.”