Delivering managed services, Cloudflare charts path to achieve $5B in revenue

Having established a robust partner ecosystem, connectivity cloud company Cloudflare sees “great opportunities” in leveraging its partner ecosystem to rapidly grow the company to achieve $5 billion in revenue and doubles down on its go-to-market strategy through partners.

Speaking to Channel Asia, Cloudflare’s chief partner officer, Tom Evans, revealed that since assuming his role in April this year, his priorities are building consistent partner ecosystems and restructuring his team to enhance its capability in providing managed services.

When it comes to working with channel partners, Evans stressed that Cloudflare is not looking to increase the number of partners that they are working with. Instead, they are identifying “strategic” partners whom they can rely on to become “more engaged” with them.

Evans also emphasised that partner enablement is a top priority, involving the education and training of partners on Cloudflare’s services and solutions. To support this initiative, he plans to expand his team, particularly in the Southeast Asia region.

Echoing his global perspective, Cloudflare head of channels and alliances in Asia Pacific, Japan and China (APJC) Wendy Komadina pointed out that managed services is a “really important priority” for their customers in the Asia Pacific (APAC) region.

“Our strategy across APAC has been really focused on reprioritising strategic partnerships and really going deep on enabling our partners from a competency perspective,” she added.

“We have been really focused on how we actually build a competency programme for our partners to develop the skills to deliver or to do consulting work and implementation and provide support to our customers.”

Working with partners to deliver managed services

According to Evans, there are plenty of partners wanting to work with Cloudflare. The challenge lies in identifying the right partner who aligns with Cloudflare’s strategy.

As Cloudflare shifts its focus to providing managed services, Evans disclosed that they are seeking partners with “established practices around their technology and solutions” and “potentially services capabilities.”

“We are looking for partners who have capabilities beyond reselling. We don’t want partners to come in and sell just one product.” he explained.

Cloudflare’s focus on managed services is driven by customer demands for consolidation among their vendors.

“Over the last couple of years, customers are consolidating their spend to a handful of vendors that sell a ton of solutions that solves a lot of different pain points,” Evans noted.

“They want partners who can sell a breadth of solutions. With Cloudflare, we do a lot of different things that allow our partners to offer their customers holistic solutions across our platform.”

In particular, Komadina underlined the importance of managed services to the Asia Pacific region.

She revealed that Cloudflare has prioritised 15 authorised service delivery partners with specialised skills in areas such as migrations, zero trust solutions, and application security services. This specialisation is part of Cloudflare’s PowerUP programme, which is designed to enhance partners’ competencies in delivering services to customers.

By working with partners who offer holistic solutions, Evans believes that this enables Cloudflare to become “more valuable” and “more sticky to the customer”.

In addition, due to Southeast Asian’s multicultural and multilingual landscape, Komadina added that Cloudflare is prioritising partners with “local knowledge” and an understanding of various regulatory and compliance requirements across the region.

While Cloudflare aims for global consistency in its go-to-market strategy, Evans acknowledged that flexibility is crucial, especially in culturally diverse regions like Southeast Asia.

He also outlined that Cloudflare leverages local leadership and partner feedback to tailor strategies to meet specific market needs. This flexible approach, driven by local expertise and collaboration, is a “unique differentiator” for Cloudflare.

Equipping partners with training and tools

With the shift to managed services, Cloudflare understands the importance of partner communications. To support this, Cloudflare is launching its partner summit in Sydney on 7 August, specifically for their Asia Pacific partners.

“We recognise that speaking to our partners is a very different conversation to speaking to our customers,” said Komadina.

“We want to empower them to have the knowledge and the solutions, and we want to invest in them as best we can.”

Besides engaging with partners via its partner summit, Cloudflare is also doubling down on its talent.

“We are going to increase the amount of people that are focused on channel and partners across all routes to market for partners and distributors,” Evans remarked.

“We have to make it easy for partners to work with us on opportunities and close deals.”

Evans asserted that one of his main goals is to make Cloudflare “easier to do business with”. He believes that Cloudflare must train its partners and provide them with the tools they need in order for Cloudflare to expect a lot from its partners.

When it comes to tools, Evans pointed out that generative AI (GenAI) is a tool for partners to “become more sticky” with their customers, who now expect artificial intelligence (AI) capabilities.

He explained that the rise in security threats has made it crucial for partners to leverage AI to prevent attacks proactively, especially when bad actors use AI for quicker breaches.

As such, he found that many partners are developing AI practices to stay ahead of these threats.

“Partners are using AI to drive their business and growth. Every customer is asking about AI – how to use it, how to make their operations more efficient, and how to enhance security. Cloudflare is leveraging a lot of these advancements,” stated Evans.

Managed services crucial to customer success

Although customers are investing in AI, Komadina found that many customers lack the necessary cybersecurity skills.

“Customers now needs services more than they have ever needed before, and this has been creating some sort of skills gap as well,” Evans added.

“Many of them don’t have the cybersecurity skills and that is where partners play a critical role in helping to bridge that gap,” Komadina affirmed.

Looking ahead, Evans believes that the path to customer success is to leverage Cloudflare’s cloud platform that allows customers to address multiple solutions, reducing the need for customers to engage with multiple vendors.

This trend is expected to grow as security threats become more significant, according to Evans.