Red Hat’s Kennedy on why the swim lanes are gone – and what the partner program looks like now

Kevin Kennedy, vice president of global partner ecosystem at Red Hat The channel has fundamentally changed – and for a long time, Red Hat‘s partner program hadn’t caught up. That’s the candid starting point for Kevin Kennedy, who joins In The Channel this week fresh off his appointment as Red Hat’s vice president of global partner ecosystem. Kennedy’s career spans just about every layer of the channel – direct sales at IBM and Xerox, close to a decade at Arrow Electronics, and leadership roles at VCE, Dell EMC, and TD SYNNEX before joining Red Hat in 2022. That perspective shapes how he talks about the shift from a model built on clear “swim lanes” – where resellers, services partners, and software sellers all stayed in their own lanes – to the multi-partner, collaborative engagements that define how business gets done today. “It’s really hard to even define a partner today,” Kennedy says. “We can’t go to market by ourselves any longer.” Red Hat’s program refresh responds to that reality with a bifurcated incentive structure: front-end rewards for individual sellers at the deal level, and back-end incentives for firms making deeper investments in Red Hat competencies. Kennedy is direct about what drove the change: “We were putting all of our rewards around the resell of our products. And that ship had sailed.” The conversation also covers the Broadcom/VMware disruption as a modernization opportunity rather than a rip-and-replace play, where AI realistically fits in the partner revenue picture right now, the evolving role of distribution as an ecosystem aggregator, and – for Canadian partners specifically – the growing urgency of data sovereignty as a go-to-market factor. And Kennedy offers a memorable frame for Red Hat’s long-term platform ambition: “Red Hat inside” – the idea that Red Hat increasingly underpins solutions partners build and customers buy, whether or not the name is on the box. Read Full Transcript Robert Dutt: Hello and welcome to In The Channel from ChannelBuzz.ca, bringing news and information to the Canadian IT channel community for the last 16 years. I’m Robert Dutt, editor of ChannelBuzz.ca and your host for the show. My guest today is Kevin Kennedy, vice president of the global partner ecosystem at Red Hat. Kevin’s career spans just about every seat in the channel: direct sales at IBM and Xerox; the better part of a decade, on and off, at Arrow Electronics; leadership roles at VCE and Dell EMC; and then about five years running advanced solutions at Tech Data and TD SYNNEX before coming to Red Hat in 2022. That’s a resume that takes you from carrying a bag, through distribution leadership, to vendor-side ecosystem strategy. That full-channel perspective shapes how he thinks about the partner business in ways that are pretty evident in this conversation. Red Hat recently named him the permanent head of its global partner ecosystem, and the word “ecosystem” in that title is deliberate, as you’ll hear. We get into how the partner business has fundamentally shifted from the old swim-lane model to something much more collaborative and complex; what Red Hat is changing in its partner program and why; the VMware modernization opportunity; where AI realistically fits in the partner revenue story right now; and what data sovereignty means for Canadian partners specifically. Let’s get right into it, my chat with Kevin Kennedy. Robert Dutt: Kevin, thanks for taking the time. I appreciate it. Kevin Kennedy: Thanks for having me, Rob. I appreciate being here. Robert Dutt: You’ve been in so many different seats facing the channel, from starting in direct sales at IBM and Xerox, to distribution, and now, of course, the vendor side. I’m curious: when you look back at the arc of the channel, as it were, over that time, what’s the biggest way the partner business has changed since you started looking at it and watching it closely? Kevin Kennedy: That’s a great question, because there has been a significant evolution, that’s for sure. I think it starts with the definition of what a partner is. It used to be that you had very clear swim lanes. You had resellers, you had services partners, and you had people who always sold software or people who always sold hardware. Everybody had their individual lanes, and that was predominantly the way the channel made money: through the resale of all those things. If you fast-forward to today, it’s completely different. It’s really hard to even define a partner today. You can’t put them in one camp. Take a larger partner like WWT, for example. It used to be the preeminent reseller for a myriad of OEM lines. Today, that may be just a portion of its business. If you look at its total bottom-line profitability, I would say the vast majority of that comes from the services it offers and the contracts it manages for very large customers. Partners have evolved. We used to be able to go sell something individually. With the complexity that now exists in technology and the solutions that customers are demanding, we can’t go to market by ourselves any longer. We’re forced to collaborate and build relationships outside of our historical domains in order to present a customer with a holistic solution that’s going to drive the outcomes or efficiencies they demand. I think all of that dynamic is great. We talked about multi-partner engagement for decades and couldn’t get it to work because, realistically, we were all competing for the same nickel. If I went into a customer with you, likely one of us would get cut out of that deal or eventually be eased out. Today, that’s not true. We’re really dependent on each other. You bring your strengths to the table, I bring mine to the table, and those combined strengths are what the customer is going to realize. I think that’s the exciting component that’s really changed dramatically, especially over the last 10 years, and even more so over the last five. Robert Dutt: That speaks to the fact that you’re coming in as vice president of the global partner ecosystem, rather than vice president of channel sales or vice president of partner programs. I’m guessing, especially from that latter point about the co-sell and multi-partner arrangement becoming much more accepted and more of a default, that it’s a meaningful and purposeful distinction. What changes day to day when you call it an ecosystem, or when you think of it as an ecosystem, rather than a channel? Kevin Kennedy: I think your point is well made. The title and our nomenclature – ecosystem versus channel, or ecosystem versus partner – are intentional. Again, it goes back to illustrating the necessity of multiple people with varying levels of expertise in a variety of domains. All of them are required to bring a customer a solution and drive an outcome. It actually makes things more complex in some regards. From my lens, at the end of the day, what do we want to sell? We want to sell Red Hat products and our platforms into a customer. In years gone by, that might have been a much more simplistic arrangement. Our sales teams would call on a customer, represent only what we’re good at, and get that deal done. That no longer remains the case. I have to make sure we’re selling the value of Red Hat’s portfolio not just to the customer. I’ve also got to make sure the systems integrator sees how we can bring value to the solutions they’re going to represent to their customer base. I’ve got to represent the value of Red Hat to the hyperscalers – why they should care about us and how we may drive consumption in their marketplaces. I’ve got to bring value to the distributors and explain why they want to put resources around our product portfolio. I need to show them how our portfolio is going to help accelerate some of the more profitable lines they represent. On one hand, the ecosystem model illustrates the necessity for all of us to come together. On the other hand, it invites complexity from a go-to-market standpoint because everybody’s my customer. That’s traditionally been true in distribution, where a lot of my heritage comes from. We used to have the adage that we’re nobody’s customer and everybody’s customer, because I have to constantly sell the value of why we exist and why we should matter to you, and how we can help you be successful. Robert Dutt: That must make it an interesting challenge to structure programs when it’s no longer as simple as, “You are a reseller, therefore you fit in box A.” Now you’ve got to get creative with your programs and incentives in order to keep partners excited about what you’re doing, engaged with your platforms, and recognizing where you’re headed and why that might be valuable to them. Kevin Kennedy: I’ve got to construct a program with incentives that look at presales and the whole customer-management lifecycle. It’s no longer just, “We’ve got a product and a contract for that product that’s going to be sold.” Now I’ve got to think about adoption. I’ve got to think about how we make that product more pervasive through an organization. I’ve got to ensure that everything we said was going to be done when we presented the solution is actually coming to fruition, so the customer sees a return on that investment. If they don’t, I’m going to be a one-and-done. If they do, it’s going to give me an opportunity to have conversations around other things we can bring to bear that might provide similar or even better outcomes than what they did initially with us. Robert Dutt: When you did the program refresh, you said it was built around simplicity, predictability and profitability – three words that come up a lot in channel chief conversations, for obvious reasons. I don’t think those are unique to Red Hat, but along with what you’ve already touched on, what did you see or hear from partners about what they were experiencing that made those changes the priority at this time? Kevin Kennedy: That’s a good question. When I joined Red Hat, I observed that we weren’t necessarily meeting partners where they were. We were still thinking about the way things had been in years gone by. We were typically putting all of our rewards – and, by the way, they were plentiful – around the resale of our products. That ship had sailed. The ecosystem had evolved considerably, but we hadn’t necessarily evolved with it. What we tried to do, especially with the incentives we launched in January, was meet partners where they are. That means we have to bifurcate our incentive structure. We’ve got sellers at those partner organizations, and we need to make sure we’re targeting incentives on the front end, at the deal and transaction level, to get them excited about moving Red Hat products. Primarily, I look at that as a great opportunity for customer acquisition. There are a lot of places where we haven’t been, and those sellers are going to be able to introduce us to those customers. They have respected and long-tenured relationships that are going to help us land our objectives, which is to have the Red Hat portfolio consumed there. Similarly, we’ve got to make sure we’re incentivizing the firms to make the investments necessary to upskill their people and ensure they have the technical requirements and technical capabilities to deliver our solutions. We’re showing them a path from whatever managed services they currently provide in the enterprise to how they can include Red Hat as part of that. That’s going to be accretive to their service capabilities and to their profitability. We’re ensuring that we have both the front end and the back end covered. Again, we’re meeting partners where they are in the market, rather than saying that we only care about what they’re going to do for us from a product standpoint. We recognize that services are probably the most profitable component of their business. How do we translate the sale of our products into an increase in their services business, which is going to be accretive to their overall profitability? Robert Dutt: The nice part about that approach, even if you are coming from playing catch-up a little bit, is that there isn’t quite as much need to educate or incentivize partners to come around to where you’re going. You’re setting it up based on where they’re at today. Kevin Kennedy: Exactly. Recognizing that partners need a lot of hand-holding and a lot of our Red Hat engagement isn’t necessarily true. In many cases, partners have a level of sophistication that’s beyond what we would even address in a traditional enablement program. Now it’s about leveraging all those skills and competencies and translating them into what that means for Red Hat and how that accelerates adoption of our portfolio. From a partner standpoint, what does our portfolio mean to them in terms of plugging into what they’re already doing from a go-to-market standpoint? It puts more bullets in the gun when they’re talking to a customer. Robert Dutt: One of the areas of opportunity right now has to be the whole Broadcom-VMware situation, which has created a lot of disruption for partners, customers and pretty much everyone. Red Hat is obviously positioned well in that space, but capturing the opportunity through the channel is different from simply having the right technology on the shelf. How are you helping partners have that conversation with customers, especially those who are frustrated and interested in other options but aren’t necessarily ready to make the big jump? Kevin Kennedy: When the whole Broadcom situation first transpired, I think we all saw it as a generational opportunity to make a land grab. We all had varying degrees of success. And when I say “we all,” I don’t just mean Red Hat, but others that play in this space as well. Where we’ve seen a tremendous acceleration in our opportunity is by changing the conversation. When we go out with one of our partners and talk to customers about what they’re doing from a virtualization perspective, it’s no longer simply about moving off VMware onto Red Hat, for instance. It’s about modernization. It’s about making sure that the customer is prepared for its technology journey – moving from virtualization and modernizing its data centre toward the AI conversation that I’m sure we’ll get to in a moment. Red Hat and our partners can help customers on that journey and accelerate it without requiring a rip-and-replace approach or a complete transformation of their entire infrastructure. They can leverage the things they may do with us today to move off VMware and into a more modernized, virtualized, containerized and Kubernetes-based environment. That prepares them to take the next step into AI. It’s not a step back. It’s not a step sideways. It’s a step forward from their initial investment with us. Robert Dutt: It is 2026, and we’ve been talking for 12 or 13 minutes now, so I am legally required to ask an AI question at this point. You’ve been pretty straightforward in saying that virtualization, automation and hybrid cloud are still the real revenue drivers, while AI is more of a near-future opportunity. I respect that honesty, and I think it probably maps closely with what partners are telling you about where they are today. But where does that leave the partner who’s getting pressure from customers to have an AI story right now? Do you lead with the infrastructure story, or do you lead with AI and then backfill toward virtualization, automation and hybrid cloud? Kevin Kennedy: I think we lead with the hybrid modernization and automation play first, and then segue into the AI discussion. Part of what we’ve seen over the last year, especially, is the need to separate AI reality from AI hype. Everybody talks about AI, and I think the pockets of success have come from partners who are listening to customers and giving them the counsel and advice that they don’t need to boil the ocean. Let’s start with some very specific processes that the customer could look to automate by leveraging AI technology and Red Hat technology. Then the customer will be able to see an immediate win and a return on that initial investment. From there, we can see where to grow. For most customers, it’s not too different from us as consumers. We think of AI and ChatGPT, and all of these things where we’re going to be able to ask a whole bunch of questions and get smart answers back to help inform us about where to go. For a lot of customers, that’s debilitating. They don’t even know where to start. The whole thing is a massive labyrinth of issues they’re trying to sort through. Every partner that can go in and provide consultative advice – saying, “We don’t need to look at everything. Let’s start with some very direct things that you say require a lot of manual intervention or take up a lot of cycles” – can leverage AI technology to circumvent a lot of that. They can make processes that took weeks or months translate into hours or minutes. What productivity increase do you see as a result? That’s an immediate win and a return on the initial investment. I think the partners that understand what collaboration looks like in this space are also going to be successful, because AI forces us to talk to others and play well with others. Even for us, we’ve enjoyed a lot of recent announcements around collaborative partnerships with NVIDIA, Dell, Cisco and others. We’re doing these things together. It’s not because we each woke up one day and said, “I really want to build a partnership with NVIDIA,” or, “I really want to build a better partnership with Cisco.” We were forced to have those conversations because of the outcomes customers expect. We realized that while we have a really important and robust piece of the solution, it’s only a piece of the pie, and the customer wants the whole pie. How do we orchestrate and architect it together so that we collaborate and go to the customer together and say, “Here’s what we can do for you. Here’s your whole pie”? Robert Dutt: You spent years on the distribution side, as you said earlier. A lot of your career was spent there. Now you’re managing some of those same companies, or the companies they’ve become over time, as a vendor. I’m curious: has your background in distribution changed what you actually ask of distributors, or what you think vendors typically ask of distributors but either shouldn’t or should ask more of? Kevin Kennedy: I tell anybody who wants to be involved in the ecosystem that if you’ve worked in distribution, that’s your MBA of channel engagement. You learn so much because, when I was at TD, for instance, I was doing business with every major OEM in the world, each with different expectations and demands. I was running a business on basis points. Understanding how to get the greatest efficiencies in the sales model and how to reap the greatest amount of profit in order to continue investing in the business prepared me better for the ecosystem role I have today. Even when I got to Red Hat, I think the way we leveraged distribution was much more traditional. We appreciated distributors for the financial piece they brought to the equation. That continues to be a critical thing that distribution adds to technology in general: they’re a financial backbone for a lot of the investments we’re all making. But distributors were also viewed as providing logistics and operational efficiencies. While that’s still part of what they do, it’s just a small part of what they do today. I look at distributors as aggregators. We talked about how one, two, five or seven partners may touch every transaction a customer buys. There’s no better place to bring all of that together than within distribution. Distributors have developed their own great level of sophistication. They’ve got technical expertise across multiple vendor lines. They’ve made tremendous investments in AI on their own, and they have specialists who are trained, competent and capable. I’m leaning on them to do a lot of the enablement for me. When I look at how we go to market with all these different partner types – whether it’s hyperscalers, OEMs, GSIs or ISVs – I can go to distribution, which is also doing business across all those same partner types, and say, “How do we work more effectively together to develop a really cohesive go-to-market strategy?” The distributor is the aggregator. It can go to the partners we all share in common – the WWTs, CDWs, Softchoices and Mobias of the world – and say, “How can you bring all this together for us to present to these partners, so they can go talk to a customer and have a holistic solution to put in front of them?” Distributors represent that capability for me. We’re leaning in hard with distribution, certainly on the legacy and traditional things they bring to bear, but more importantly on the forward-looking investments they’re making in their own enterprises that are going to help accelerate partner adoption of our solutions. Robert Dutt: Close to home, data sovereignty is a major issue for Canadian organizations right now. Between government guidance and some muscle being put behind that, there’s a growing concern about where data resides and the whole CLOUD Act question. Do you see that showing up in partner conversations in Canada, and how does Red Hat’s story change in that context, if it does? Kevin Kennedy: It’s a prevalent and very relevant conversation today in Canada, certainly in EMEA and APAC – essentially everywhere outside of the United States. It’s forced us to re-evaluate how we’re going to market in those environments. It changes the perspective on simply talking about the hyperscalers. It changes the perspective on what a sovereign cloud looks like and who the players are. It’s introducing us to players in spaces such as telecom, where telcos are now looking more like the sovereign cloud providers of the future. How do we build a secure solution, working on a public cloud, private cloud or sovereign cloud provider, that will be required – especially in government and GOE spaces – and provide them with the opportunities they’ll need in the future? It started to emerge perhaps at the end of last year, but it’s now a massive topic of conversation with us, and I think that’s going to continue. When we talk about AI, this is going to be a big component as well. How do we protect this data, and how do we have it reside in a secure environment that’s critical to government agencies and how they operate every day? Robert Dutt: Do you see Red Hat partners as having a major untapped or under-realized opportunity right now? Kevin Kennedy: I still think virtualization is a major, major untapped market. We’re hot on the customer-acquisition trail. Traditionally, we’ve grown through established customer relationships that have been great to us over the years. We’ve made mutual investments in those relationships, and we’re certainly going to continue that. But we’ve got to find new business. I think AI is the accelerant in that. It gives us a forum for conversations around what we’ve built. Anybody who has made an investment in our core portfolio has a springboard to get to where they want to go relative to AI. The partnerships I referenced with NVIDIA, Cisco, Dell, HPE and others are great catalysts for opening discussions with customers who perhaps didn’t know Red Hat before. I sometimes think about it this way – and this is probably an oversimplified way to put it – but for years we all bought laptops that ran on Intel chips. “Intel Inside” was a great marketing ploy for a whole host of reasons. I kind of see Red Hat that way a little bit: Red Hat inside. We’re going to be the underpinning of a lot of solutions that customers are going to buy in the future. They may not even know that Red Hat is running in there, and I’m not sure that we care. We want to be that secure platform that provides mobility from the cloud to on-premises environments, with seamless motion back and forth. We want to provide the level of security that’s going to be required, whether that’s in a sovereign environment or in our current state, where data security is the utmost concern. We want to be the underpinning that allows all that stuff to run effectively and efficiently, and gives customers portability and an open concept. Whether or not the customer actually knows Red Hat is there, I’m not sure that matters that much to us from the customer lens. It matters more in terms of how we’re going to work with some of the other partner routes we’ve talked about, especially given the ecosystem discussion. Robert Dutt: I’m curious what you’d like to see partners doing more, better or differently for the benefit of Red Hat, yes, but especially for their own businesses and where the business is going. Kevin Kennedy: I want to be a catalyst for them to sell autonomously. I think OEMs have often seen themselves in an outsized role when it comes to going to market with partners. We’ve acted as though partners need us in order to deliver the solution, or need a Red Hat badge in order to get validated by the customer. Certainly, there may still be an element of that, but I’ve found that partners’ customer relationships and the trust they’ve already earned with those customers supersede our need to be necessarily involved. I’m looking at ways to pour gasoline on that fire. How can I get out of the way and let partners move at a quicker pace than they may have in the past? Certainly, we’re part of the solution. We want to make sure partners have everything necessary, whether that’s training, enablement, demo equipment, proofs of concept or executive briefing centres – whatever they need to ensure they have the utmost confidence to position a solution that contains Red Hat products in the best light with the customer. But we know partners don’t need our help to have that sales conversation. They don’t necessarily need our help to deliver the services after the sale, to do the migration or to provide managed services, because they already have that expertise. We just need to make sure they feel confident that they can incorporate us into that motion. That’s really my focus, even from an ecosystem program standpoint. I want to put the incentives in a place that accelerates all the things partners are already good at and simply includes us in that motion. Robert Dutt: It sounds from those last couple of answers that you’re quite happy being the underpinning, the foundation behind either the customer solution or the partner’s sales motion. How does that shape what you’re focused on personally and program-wise in terms of what partners can expect from you and from Red Hat over the balance of the year and beyond? Kevin Kennedy: My mantra has been to do more with less. What I mean by that is that the partners who already fit the profile I’ve been describing – those with core competencies and skills, strong market presence, tremendous customer relationships, and investments in upskilling their people with the technical and sales expertise to represent Red Hat well in the marketplace – are the partners I want to invest in to a high degree. The partners who may traditionally have just wanted to put our logo on their website and clicked through to become a partner because they wanted to resell or perform more fulfilment activities – that’s great, and I still want to welcome those partners. But those are not the partners around whom I’m going to build programs or in whom I’m going to invest heavily. They’re not the partners where I’m going to continue putting direct resources side by side with them to win in the marketplace. I want to go deeper and wider with fewer partners who have the investments and skills necessary to bring customers the outcomes and efficiencies they’re looking for. Robert Dutt: That’s a great place to leave it. Kevin, thank you very much for taking the time. Kevin Kennedy: Thank you for having me. It’s been a great time, and I appreciate the opportunity. Robert Dutt: There you have it, Kevin Kennedy from Red Hat. I’d like to thank Kevin for his time today. He’s someone who has thought seriously about how this business actually works from multiple vantage points, and that comes through. Thanks for listening as well. A couple of things I’m taking away from this one. The “Intel Inside” framing that Kevin used – the idea that Red Hat is increasingly going to be the underpinning of solutions that customers buy and partners build, without necessarily being the name on the box – is a significant strategic statement. It’s a bet that being foundational is worth more than being front and centre. It’s worth watching how that plays out for partners who are building practices around Red Hat technology, or potentially are. And the ecosystem-versus-channel distinction doesn’t come off as just a title change. When you’re talking about a single customer engagement that might bring together a cloud provider, a services integrator, a software specialist and a reseller, all at the same table, the question of how you build a program and reward structure around that is unsolved across the industry. Red Hat is working on it, but so are a lot of other people. For Canadian partners specifically, the data sovereignty conversation is one to pay attention to. Kevin was candid that it’s reshaping how Red Hat thinks about going to market outside the United States, and the Canadian regulatory environment is only going to make that more pressing over the next few years. If you found this useful, please follow or subscribe wherever you get your podcasts. We’re on Apple Podcasts, Spotify, YouTube and most major directories. Ratings and reviews are always appreciated. Until next time, I’m Robert Dutt for ChannelBuzz.ca, and I’ll see you in the channel.