Citrix takes large accounts direct

Asks its US partners to go after the midmarket.

Citrix Systems has opted to take direct control of sales relationships with 1,100 large enterprise accounts in the Americas, but senior executives insist the company still values it sales channel.

Starting January 1, Citrix's sales teams will begin serving these large enterprise customers directly, including some that are currently being handled by partners. To remain involved with these accounts and be eligible to receive their Advisor Rewards, Citrix's US partners will need to have a formal invitation from Citrix and be included in a Citrix-developed account plan.

Which partners will be invited? That's up to Citrix's area sales teams, of which there are seven in the U.S. and one each in Canada and Latin America. Mike Fouts, Citrix's senior director of Americas channels and field operations says these teams have the necessary depth of knowledge about top enterprise accounts, and the nature of the engagement within them, to make the call on which partners will remain involved in the sales process.

Partners that Citrix does invite into enterprise accounts can expect to handle proof of concepts and pilots, and to educate customers on how Citrix solutions can solve problems. These will be "strategic and in depth engagements," Fouts said in an interview.

Citrix's rationale is that large enterprise customers would rather deal directly with the company. This certainly isn’t a new concept -- plenty of other enterprise IT companies have, at one time or another, sought more control over their top accounts.

But given the typically lucrative nature of enterprise customer relationships, Citrix's Advisor Rewards changes will certainly have some impact on partners' revenue. However, Fouts notes that the 1,100 enterprise accounts that Citrix is taking over represent a fraction of the customer base that's open to the channel.

"Even though there are a number of brand name accounts on the list, it still remains a very small percentage: It's less than two percent of the account base that partners have the ability to go into," Fouts said.

Citrix is also working on new channel program incentives, and Fouts is planning to talk about these in more depth in the latter part of January. "Partners can expect to see very generous rewards and incentive programs for selling products, as well as margin on selling to new customers," he said.

Citrix sees plenty of opportunity for partners outside of the 1,100 enterprise accounts that are being roped off, including the midmarket and the small and medium business space. Citrix's acquisition in May of Kaviza, developer of the VDI-In-a-Box desktop virtualisation product, was a decisive step toward an SMB market that hasn't traditionally been a major focus for the company.

Despite a largely positive channel track record, Citrix has angered its channel partners in the past, notably with its August 2006 decision to take its Subscription Advantage Renewal program direct and transition its advisers to an agency fee model.

One Citrix partner told CRN that the Advisor Rewards changes are prompting his company to look at alternatives.

"We've now been cut off from revenue in Advisor Rewards and Subscription Advantage Renewals, and it's having a very dramatic impact," said the source, who requested anonymity. "Our model is very Citrix centric, but we're looking at shifting from Citrix being the centre to other products that have more margin and partner friendly programs."

While he acknowledges that some partners might find the latest changes disruptive, Fouts says Citrix's programs and products will continue to be profitable for partners.

"We've been very loyal to the partner community over the years and we're doing this for a very specific business reason. I hope partners will realise that," he said.

A spokesman for Citrix told CRN there will be no change to its strategy in Australia to align with changes in America.

"There will be no change in the way that the local Citrix channel model operates, which is overwhelmingly through our channel partners," a spokesman for the company said.