For too long, IT vendors have dictated to their partners how they should run their businesses. They have built channel programmes that are inflexible and prescriptive in nature, laying down the law as to how a partner should sell, which training and certifications they undergo and how much revenue they must achieve before receiving any form of benefit.
However, the emergence of disruptive new technologies and consumption models means the IT industry is transforming too fast, and is now far too complex to believe any vendor inherently “knows” the recipe for making channel partners successful.
It’s time that control over joint investments and profits is directed back to where it belongs: to the partner. It flies in the face of traditional channel engagement, but vendors need to trust the partner can make their own decisions as to their knowledge and skills – surely, they know their own business better than anyone?
The vendor should instead communicate intent, and leave the making of crucial decisions like joint investment planning and subsequent actions to the partner. The vendor communicates intentions and collaborates with the partners on a joint plan of action. It is a collaborative process not bound by the conventional restrictions typical of other formulaic programmes. For example, we see that enterprises are uncomfortable with the lack of productivity gains out of their old 3-tier datacentre infrastructure. The legacy vendors, which have traditionally dominated the market, merely pitch even greater discounts to keep these outdated systems in, furthering impeding innovation. The young and newer vendor’s natural reaction has been to design a ‘legacy rip and replace incentive’ with fixed terms and conditions, and roll it out to all their channel partners. Perhaps a better way would be to ask partners for their feedback as to how to stop legacy vendors from locking in their customers in outdated technology, so a joint action plan can be built based on how the partner believes this common goal can be achieved.
Vendors still need to ensure a programme is in place, but it should resemble a thought framework, with the right tools, instruments and guidance on best practices with regard to training, certification, demand generation or any other requirement or benefits. It is a starting point, and can be rewritten completely in collaboration with the partner that decides to move forward with a vendor chasing a common goal.
Historically, channel partners have been merchants of complexity; selling disparate architecture with multiple components that required a lot of integration services to make it work together. That’s also been the engine of their profitability. But now they’re seeing competition from the new merchants of simplicity – the cloud providers. Cloud providers give their customers that last leg experience, and they love it. It also means there are lots of applications and workloads moving from the datacentre to the cloud, meaning business is moving away from channel partners.
To grow and stay profitable, the channel needs to be able to offer their customers the cloud experience in the privacy of their own datacentre, consumed as an investment (CAPEX) or as a subscription (OPEX). But that automatically disrupts their business model as well, as this Enterprise Cloud technology doesn’t require all the complex integration services they used to sell.
When we put our go-to-market strategy together for our channel partners it always starts with ‘how can we make them more competitive than public cloud, and at the same time build a profitable business?’ One of the answers lies in moving their services higher up the value chain – how can partners help the customer with digital transformation? How can they help in making their workforce more mobile, or more productive? Can they help with initiatives that will help the end user and their customer experience?
Partners need to position themselves to be as competitive as possible in this new disruptive technological environment. As a vendor, we must help our partners transform their business models. Offering a basic, vanilla partner programme with a list of certification requirements, revenue thresholds, and marketing obligations just won’t cut it.
Vendors need to put a custom plan in place, and importantly, the plan must be driven by the partner – with no jumping through hoops. The partner should be able to let the vendor know what they believe works in terms of marketing activities, funding and benefits to ensure they grow and are as profitable as possible.
It’s time for a new kind of leadership in the channel. The traditional top-down partner programme needs to be replaced with a new collaborative approach that puts the channel partner back in the driving seat. An approach with joint investments, not incentives, with bold pipeline and bookings goals that make the business grow faster at a lower cost of sales. This requires courage and more business acumen from the channel leaders, but also makes the channel a co-equal partner in the go-to-market, partnering with field sales leaders, not just supporting field sales teams. Only vendors and channels that can adapt to the ever growing variety of where and how customers consume IT, will be able to fully embark on the huge potential of the digital transformation.
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