Digital Realty Looks to Partners to Capture New Logos

Digital Realty, a provider of hosting and interconnect services, has added a Spring 2018 Channel Partner Performance Sales Promotion Incentive Fund (SPIF) to its channel program through which partners can gain additional rewards and commissions as high as 25 percent for convincing new customers to deploy applications in co-location facilities in North America.

New “customer logos” are especially valuable to hosting providers such as Digital Realty because once an organization starts relying on a hosting service the number of workloads deployed outside their traditional data center tends to expand rapidly.

While more workloads than ever are moving into the cloud, it turns out there has been a corresponding rise in demand for managed hosting services. IT organizations like the idea of treating IT infrastructure as an operating expense, but they don’t want to give up control of the underlying infrastructure or invest in building a data center.

In many cases, application performance, data egress fees, and security concerns conspire to eliminate public clouds as an application deployment option. Hosting their equipment in a data center where it can be managed on their behalf by a solution provider becomes an attractive option.

Most of the Digital Realty channel is made up of master agents, but the company has seen a steady rise in the number of systems integrators (Sis) traditional solution providers it engages, says Dave Robbins, vice president, partners, and alliances at Digital Realty.

“We see a lot more activity from regional SIs,” says Robbins.

In those circumstance, Digital Realty has crafted a strict set of rules of engagement for when and how its direct sales are allowed to engage, says Robbins. In total, Digital Realty has about 150 active partners.

Competition is already fierce among hosting providers, which in turn has been driving a wave of consolidation. Digital Realty, for example, acquired Telx in 2015, a move that doubled the overall size of the company.

In its most recent fourth quarter, Digital Realty reported revenues of $731 million, a 20 percent increase from the previous quarter and a 27 percent increase from the same quarter last year. For the full-year 2017, the company reported revenues of $2.5 billion, a 15 percent increase over 2016. Net income for the fourth quarter was $80 million.

Ultimately, it remains to be seen where most application workloads wind up running. But somewhere between on-premises IT environments and public clouds, there’s a third hosting option that continues to experience steady growth year after year.