Partners and Vendors Disconnected on the Shift to the Cloud

By Diane Krakora, CEO

Last week I discussed a few eyebrow-raising comments Chris Rimer of IBM made during our most recent webinar. Chris, one of two guests during the webinar, positioned that vendors are not responsible for funding partners’ shift to the cloud.

Chris’ view is that customers, not vendors, are driving the demand for cloud services, which is forcing partners to change their business models. As such, it’s not the responsibility of the vendors to support them making the shift to the cloud.

I totally agree. And, it’s very hard to go from being a services company that offers $100,000 projects to living off of $5 a month in terms of licenses. It’s a tough road of change for the channel and as the pace of cloud adoption increases among their customers, each day that passes brings partners closer to the iceberg that could sink them if they don’t evolve.

In our latest State of Partnering study of 100 vendors and more than 200 solution providers, we asked vendors what issues they felt their partners were experiencing in building a more cloud-centric business. The vendors’ top two responses were related to the partners’ ability or unwillingness to shift their business model. However, only 7 percent of solution providers indicated they weren’t interested in growing their cloud revenue – meaning that they didn’t feel it was a right model for them.

It doesn’t take an MBA to see there is some major disconnect between perception and reality.

Take a look at partners who are successful in the cloud space and you’ll realize quickly there aren’t a lot of them out there who are absolutely killing it. A few, such as CloudOne (which, incidentally, was our other webinar guest), are successful because they were born in the cloud or created a business unit that focuses on cloud-first solutions.

In other words, they’re not trying to turn the Titanic.

Ben Chodroff, CTO of CloudOne, noted the disconnect is a catch-22, of sorts. Vendors can’t find qualified partners to sell their cloud solutions, so they sell the solutions themselves. But that leads to conflict and bad feelings among partners, who already feel the vendor isn’t doing enough to help them get to the point where they are successful at selling cloud solutions.

But, there are signs of softening among vendors. “It used to be a reluctance, in many cases, to engage a partner to help solve these challenges. There was more of a thinking that they (vendors) could do it all themselves internally,” Ben said. “A lot of times, we’re seeing now [vendors] really leveraging their partners to help fill in the gaps.”

Solution providers know they have to change or, in all probability, they will perish. They know it’s the right thing for their customers, the market and their business. It’s just not easy.

Chris made it clear he would like to have an army of CloudOnes to sell IBM’s cloud services. “The reality is,” he said, “they just don’t exist.”

The question is whether vendors will help build that army even while acknowledging it’s not their responsibility to do so.

Diane Krakora is CEO of PartnerPath with two decades of experience defining the best practices and frameworks around how to develop and manage partnerships.