Mimecast uses discounts to protect reseller renewal business


Mimecast uses discounts to protect reseller renewal business

Microscope contributor
by Billy MacInnes

Cloud-based email management vendor Mimecast has hit on a novel way of preventing channel partners from stealing each other's renewal business - it slashes the discount available to the partner trying to poach the contract.

The company, which announced today that Telefonica O2 Ireland planned to resell its email management services to business customers, believes the discount reduction helps to protect the incumbent partner at the renewal stage.

Business development director Julian Martin said Mimecast "wants people to focus on developing new business" which was why it sought "to make sure we protect renewals. Anybody trying to poach a customer will get their discount reduced. We're trying to develop long-term relationships with these people".

Martin said Mimecast was seeking to avoid the situation which applied in the anti-virus market where there was a lot of churn among customers.

The company also hoped to counter channel partners' concern that a cloud-based approach would remove them from the equation. "We're trying to make sure the partner is still very much involved in the supply chain," he claimed, suggesting other vendors might be trying to forge a direct relationship with customers.

He revealed Mimecast planned to continue recruiting partners across Europe but was conscious of the perils of "over-recruitment".

The agreement with Telefonica O2 Ireland was significant, Martin added, because it represented another type of partner the company was looking to make agreements with.

It showed that O2, which was predominantly known for voice and data, was looking for other ways to add value. The benefit of signing with Mimecast was that it was like a bolt-on to the business which could be introduced with zero time to market and zero investment.

"If someone was looking at developing these services inhouse, they would be looking at a 12 to 18 month or two year window and a seven figure investment to deliver what we do," he claimed.

Telefonica O2 Ireland business sales director Alan Brown described the deal with Mimecast as "another key differentiator between ourselves and the pure voice and data providers".

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