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The Power is Shifting to Partners


Channels design, market, sell and service a full solution for customers.

The partners you engage and enable for cloud might not be the same partners in your current program. As IT consumption moves to on-demand and subscription models, the types of partners addressing customers’ needs will shift, as will the services these solution providers offer. Channel partners of the future will manage the entire customer lifecycle – from evaluation, through purchase, adoption and usage. The channel partner who recommends a combination of policies, products and support to address a customer’s needs will truly be their trusted advisor. Not only are they the face of the solution for the customer, since they marketed and sold it, but they are also the brains. The solution provider knows how all the products and pieces work together and specifically, how they work for a particular customer. They own that customer relationship. The power is shifting to partners.

Gone are the days where companies like Siebel Systems charged solution providers a million dollars (no joke) to enter the “strategic partner” program level. In the channel ecosystem of the future, the solution providers have all the power. They meet with the prospect, introduce a solution that includes multiple products (hopefully some of yours), design how the solution integrates with the customer’s current environment, implement the solution (they might ask you to provision the users), develop the change management policies, roll the solution out customer-wide, drive adoption and manage the front-line support questions for their customers. Whew! The solution provider now truly owns the customer relationship and thus has the power to decide which products are part of the offering.

Release your expectation of owning the customer. It is the solution providers’ customer – you’re just a piece of the solution.

More solutions being offered as outsourced managed services.

Thus, we were very excited to see vendor respondents rank Managed Service Providers as their most strategic partner type for the first time in ten years! And considering the intricacies of integrating solutions into a customer’s current environment, change management and the policy development that accompanies cloud offerings, we are equally delighted that System Integrators and Consulting Partners are ranked #2 and #3 respectively. Both of these partner segments moved up several spots from previous years’ studies.

This aligns with the solution providers’ perspectives on their own business. Over half of solution provider respondents classified themselves as a Managed Service Provider and almost half classified themselves as a Consultant. We allowed partners to choose more than one answer, testing to see if they classified themselves with multiple roles. They totally did! On average, partners chose at least two roles for classification and about a third chose three or more roles. Additionally, 20% of solution provider respondents indicated more than a quarter of their sales are coming from activities they were not engaged in 24 months ago. Clearly their businesses are shifting and morphing.

We are a little disappointed to see traditional resellers still listed in the middle of the pack of strategic value to vendor respondents. Also, this answer was the third highest self-classification by the solution providers. Yes, we understand sales must be made and the resale business is critical to meet the quarters’ numbers. However, reselling won’t be strategic to the business. Skate where the puck is going.

Lines between vendor and solution provider are eroding.

Classifying the partner community by type will continue to be a challenge, as partners are becoming vendors in their own right. This is anecdotally noted from how many solution providers tried to answer the vendor questionnaire. Additionally, according to the data, 35% of partner respondents indicated they have significant (over 10%) of sales from innovation developed in-house and 20% have developed a partner program that facilitates the sale of their own innovation and expertise through fellow solution providers. Thus, we continue to advocate the industry classify channel players by their primary business model (a verb) verses a label (a noun). Does the partner refer, sell, develop, bundle, integrate? Each partner will still hold multiple roles, but we might be able to get ahead of the solution provider versus vendor discussion.

Transition your discussions from partner types to engaging partners by role – do they market, sell, refer, bundle, service, support?

This is an excerpt from our 2016 State of Partnering Report: 10 Trends for a 2020 Vision. Keep following our blog for more posts and discussions of the data, as well as webinars discussing the various trends.
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Topics: Partnering Tips, Industry Perspective

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