Cloudflare is luring partners to deliver managed and professional services with the promise of increased profitability.
The cybersecurity vendor says channel partners can take advantage of “substantial discounts” in its new bundles to sell secure access service edge, application services and other products together. The bundles give partners a financial incentive to add more services across the Cloudflare portfolio, according to Chief Partner Officer Tom Evans.
Cloudflare is using the bundles to displace point solutions from rival vendors like Zscaler, Cisco and Palo Alto Networks. Cloudflare CEO Matthew Prince said the company won customers from legacy zero trust network access and on-premise VPN providers in Q3, which saw 31% year-over-year revenue growth. Prince said clients are migrating because they see the appeal of a unified SASE platform.
Evans said the bundles create stronger financial incentives for partners to service end users. But the benefits are indirect: customers can purchase professional services from partners with the money they save.
“We want our partners to deliver the services. That's our goal for the rest of this year and into the next few years. How do we enable our partner community to deliver more services across all of our solutions?” Evans said.
Evans said Cloudflare is recruiting services-oriented partners, including managed service providers, and training existing partners to provide services. And partners that already provide Cloudflare services need to widen their capabilities.
Prince in Cloudflare’s latest earnings call said Cloudflare has adopted a “partner-first” strategy. Prince said he doesn’t expect the percentage of partner-driven sales to match the “90% plus” ratio that Cisco and Zscaler drive, but he projected significant channel growth. Partner-led bookings doubled year-over-year, he said.
“We have always, I think, had good willingness to partner, but we haven't always made it as easy as possible to partner with us. I think we're cleaning that up and doing a good job getting that in shape,” Prince said.
Enabling managed services
Cloudflare is recruiting fewer transactional resellers in favor of services-heavy partners.
"Every year we're going to do a lot more revenue with fewer partners, but we're increasing our services partners," said Evans.
Translation: Cloudflare isn't actively recruiting resellers anymore, except in markets where it has no choice.
The shift could pose a challenge to Cloudflare's tech services distributors and technology advisors — most don't offer services today. The company is trying to incentivize them with better discounting and customer retention tools, but the message is clear: adapt, partner with a Cloudflare MSP for services, or risk being left behind.
MSPs are the growth story.
Unlike traditional resellers, managed service providers embed Cloudflare into their own platforms rather than reselling it directly. That requires different economics – not-for-resale licensing, consumption tracking and billing tools that Cloudflare is still building.
"We're seeing huge growth in interest from customers and from partners already having success," Evans said. "They just need us to make it a little easier."
