Veeam Launches A $200M Push To Bulk Up Cloud Partner Ranks

Veeam VARs "have their reseller margins depending on the tier of the partner. We've just leveraged the existing agreement that the partner had and added that if it's a subscription, it's pretty much the same margin that you would get if you're doing it perpetual. Most partners like to retain account control so they get the recurring revenue. As long as the customer is happy, you keep getting recurring revenue. Your job is to keep the customer happy and sell up," McKay said.

The same goes for Veeam's sales reps, whose compensation doesn't change depending on whether they sell a traditional perpetual license or a subscription.

"What we've done is take what would be a traditional perpetual license deal and we said what do we think that's going to be on a subscription, and we've neutralized it, meaning a sales rep, a Veeam sales rep will make the same amount if they sell a perpetual or a subscription," McKay said. "We're paying them up front for that."

The investments also serve another purpose: They help Veeam compete with cloud titans like Amazon Web Services. McKay said Veeam is in a position to capitalize on AWS's high cost.

"People are seeing the cost," McKay said. "They start, and then it mushrooms up. It's a lot more expensive than they thought and it busts a lot of the budgets that they had. And the channel doesn't really make anything. If you leverage Veeam on Amazon, you're not making much. It's kind of a race to the bottom, and it's kind of a direct model. What we believe is the best scenario for us is that partners pick this up, we enable them with partners like SingleHop an iLand that have built this business, and we join them together."