M-Files UK gears up with further growth with new partner programme
Following UK growth of 78% in the last 12 months and the launch of the M-Files 2018 intelligent information management system, M-files is gearing up for further growth with a new UK leadership team (see box below); unified reporting (and targets) for channel and direct sales; and an enhanced partner programme, including, for the first time, referral and co-sell agreements. To find out more, Technology Reseller Editor James Goulding spoke to the newly promoted Director of UK Business Tim Waterton.
Technology Reseller (TR): Were these changes prompted by feedback from existing channel partners?
Tim Waterton (TW): To a certain extent. We have had a strong channel in the UK, but until now it has consisted essentially of resellers. They have driven their business successfully, with 100% compound growth over the last three years, but we recognise that the channel opportunity doesn’t lie solely with resellers.
The challenge for resellers is they have to fulfil the full function of a technology company: they need to market and generate opportunity; they have to have sales skills and pre-sales skills to execute and develop those opportunities and demonstrate capability to a prospect; they have to have the skills to deploy that solution, so they need a services and delivery organisation behind them; and they need a support operation behind that as well. Clearly, to come on board as a reseller requires quite a substantial investment in terms of training, certification, headcount, the whole nine yards.
Many organisations are involved in markets that have great opportunities for M-Files, but aren’t yet ready to take that big step into becoming a reseller. In fact, they may never want to. Putting a referral program in place allows those organisations to partner with us in a slightly looser way and still monetise the opportunity they have within their installed base. We provide generous terms for referral partners that pass on an opportunity for M-Files s to service with our direct sales team and our own delivery organisation.
More interestingly, these is also a co-sell component of the referral programme, under which we provide more generous commissions to partners that sell alongside us into their customer organisations. They still benefit from having an M-Files direct sales person alongside them all the way through to completion; they still benefit from the M-Files delivery network; they still benefit from highly skilled M-Files pre-sales guys. But they remain engaged with their customer all the way through the process. It blurs the line between channel and direct and provides a formulation for companies to engage with their installed base or other opportunities while leaning on the M-Files centre of expertise in the UK.
TR: What sort of feedback have you had from the channel about the new programme?
TW: It’s been very positive across the board. Our existing resellers see this as another string to their bow and we expect them to sign up referral agreements when they identify an opportunity that they may not be in a position to service, because it is at the wrong end of the country, for example, or outside their domain of expertise. They can choose to go down any route with any opportunity: they can refer it; they can co-sell with us; or they can go through the traditional reseller route.
In new conversations, many partners see co-sell as the best way to start their relationship with M-Files, while we see it as an on-ramp to re-sell. It’s very easy for people to start as a referral partner, with referral and co-sell terms. Then, as we learn together and the volume of business grows, this may or may not mature into a full re-sell relationship, depending on the level of expertise and the depth of investment they wish to make.
TR: Were you missing out on opportunities with the old structure and, if so, in what areas?
TW: Yes, we were. A big strength of the new programme is that it will allow us to partner with organisations that have very specific vertical market expertise. In certain vertical markets, there will be a whole set of terminology, capability and understanding that we, as an ECM provider, don’t have in-house. We do align our sales team by vertical market and we do have reasonable expertise, but at the end of the day, you never have the depth of knowledge that a specialist in a particular sector will have. They understand the eco-system of the market they work in in a way that is hard for us to achieve quickly. So, for us, the new programme is an accelerator.
TR: What sort of impact do you think the referral model will have on the balance between channel and direct sales?
TW: We are still dominant on the direct side. We are probably looking for 50% growth on our organic resell business this year and 100% growth on the direct software side of the house. We see the new referral model generating close to 20% of the overall UK number this year. Including the referral side, we are looking for an overall channel contribution of 35-40%.
TR: Is there anything about M-Files 2018 that makes now a good time to adopt this broader channel strategy?
TW: It’s not driven by the technology roadmap or features and functions of M-Files 2018; the strategy would have been equally valid with prior releases of M-Files. That said, I do think that the nature of M-Files 2018 and the breadth of its appeal are starting to open up opportunities in areas of partnership that previously had not been available to us.
One other aspect of the referral programme worth noting is that it not only appeals to resellers and go-to-market partners, but also to other technology go-to-market partners. For example, organisations that specialise in real estate and property management and have specialised line of business systems for that market, but no content management capability, are now able to bring M-Files to the table and know that they are fully supported from our side.
Realistically, those people would never be resellers because they spend their time selling their own technology and their own solution and wouldn’t want to sell a third party’s. Being able to bring M-Files to the table is a great plus for them.
TR: What are the big challenges facing M-Files UK this year?
TW: Growth. Hiring. Talent. It’s an interesting market at the moment, in that we are seeing something of a changing of the guard, certainly in the mid-market, where some of the larger, legacy vendors are coming under a heck of a lot of pressure and people are demanding a more ﬂexible, agile solution.
I see two big challenges in the market. One is the digital workplace. Already 30% of the workforce is made up of digital natives – people who learnt to use an iPad before they learnt to use a pad – and by 2020 that’s going to be something like 70%. They are quite a fckle generation. They will wait 12 or 24 months for their next challenging assignment or promotion before they look elsewhere.
At C-level, organisations are having to ensure they deliver ﬂexible collaboration and content management systems and a vision of the digital workplace, otherwise they are simply unable to hire the right level of talent. I heard a quote from a CEO the other day that encapsulates this. He said: “I don’t need a digital strategy for my business; I need a business strategy for the digital age.” That sums up the inevitability of the change.
The other challenge is in delivery. Many large IT projects run and run and run, cost a fortune and never truly deliver on expectations and end user engagement. This is partly down to the waterfall delivery model – the process of designing a massive system at one point in time, spending two years delivering it and then, when you roll it out, finding that what you have built wasn’t what you wanted in the first place and is certainly not fit-for-purpose now.
We deploy an agile delivery model. Our delivery team works on the basis of minimum viable product and works very, very closely with people on iterations that deliver functionality and move them closer and closer to their digital workplace. This controls spend, it controls requirements and it helps align priorities between the business and IT functions. That’s a massive component of our success and you can’t do that unless you have a fundamentally agile product underneath.
A good example is a large deal we did at the end of last year. As part of the proof of concept, the customer wanted us to run a trial for 6-8 weeks, for 20 users across five domains of their business. It didn’t have to be full function, but they wanted to take a long hard look and poke and squeeze M-Files appropriately. We sat down and ran an interactive requirements workshop with them on Monday, configured the system on Tuesday, demonstrated it and got feedback on Wednesday; made the amendments on Thursday; trained them on Friday; and users were on the system the following Monday. Then we had bi-weekly review meetings on site where we customised the system and resolved any issues.
TR: An older, established competitor wouldn’t be able to compete with that.
TW: No, it’s not the way they think about things. Often, people end up bringing in consultancies. The consultancies have a war room, there are post-it pads all over the wall, there are lots of consultancy discussions and, at the end, there’s a massive requirements document that goes into a specification. This way of working doesn’t meet the requirements of today’s digital age.
Somebody else recently commented that one company’s vision of the digital workplace is different to another’s. The reality is that a project will never be completed because over a couple of years AI will have moved on, the user community will have moved on, the customer may have sold some assets or bought a couple of businesses. Projects evolve and have no real end point, so it’s critical that you deliver value all along.