In December 2021, PartnerPath CEO Diane Krakora hosted our annual year-end webinar with Jay McBain, Principal Analyst - Channels, Partnerships & Ecosystems at Forrester. They broke down what vendors should keep an eye out for in 2022. To hear the full dialogue, including examples, explanations and what you should do to adapt, be sure to watch the webinar. Below are a few highlights on each trend.
1) Non transacting partners
Everything in the channels used to be focused on the transaction. That’s changed. We need to start caring about and figuring out how to engage partners who influence the customer. Who is providing the services so a customer can understand what outcomes they want in technology? After the transaction, who's driving usage optimization, growth and renewal?
One of the biggest changes with the multi-cloud, hybrid cloud world is moving to a partner-assist mode instead of partner-sourced. Microsoft is a good example of this because they bragged for ~40 years that 90% of their Business Plus was partner-sourced. Now they only talk about partner assist. 96% of Microsoft business is partner-assisted. They have the systems and measurement systems in place – attribution models, data sharing models, ecosystem automation – to be able understand the value of early-stage partners.
Customers want technology solutions that produce an outcome and partners need to understand the customer’s business to be able to produce that outcome.
Let’s say the buyer is in marketing at a small radiology office in California. The partner needs to be able to understand the business needs of this one of 12 subindustries in healthcare, where every time you drive a hundred miles, there's new legislation and localization of healthcare compliance. You can't be a global radiology industry expert. That doesn’t exist.
Then talk about the product areas for selling hardware, software and services into that radiology group. To add to this complexity and specialized needs, think about the delivery model. Is it going to be delivered in a managed services framework, professional services in a product-led growth model, in a subscription consumption model, in a value or usage-based model?
To start supporting partners for this hyper-specialization, vendors need to consider how they engage and enable partners to be able to understand a 12-person radiology group for example, the solution that goes there, and how your product fits into that overall solution to provide the desired outcome?
Forrester reported marketplaces grew more in three months during the early stage of the pandemic than the last 10 years combined. This will be one of the enduring long-term switches that came out of the pandemic.
Marketplace strategies have started to unfold and take shape in the last year. There are now 20 marketplaces that will address 80% of the market need. These are hyper-scalers like AWS, Microsoft, and Google and SaaS companies such as ServiceNow, Salesforce, HubSpot, Workday, Marketo and NetSuite.
Marketplaces take shape to serve buyers. If you're a financial buyer, you might enter NetSuite. If you're a sales buyer, you enter the AppExchange. If you’re in HR, you might enter Workday and they will build your security, compliance, continuity. Everything you do on top of Workday may start at the Workday marketplace.
You're going to have to figure out how to go play in marketplace model. AWS and/or Microsoft, SAP and Oracle and/or IBM, with Salesforce or ServiceNow?
Distributors are very well-funded companies with extremely bright and resilient people. For everyone who’s ever said they're going to fail, they've always found a way. In this model, though, there's two things they need to do.
One: they have to become a platform for distribution – a future model that doesn't have any legacy distribution, capital credit, supply chain type of debt. With a million SaaS companies, a million emerging tech companies, and millions of partners flooding in – this cannot be a human-based distribution model anymore. It needs to be an AI-driven orchestration model.
Two: distributors have hidden from the customer for 40 years, hiding behind the partner. In an ecosystem nobody hides. The immense value distribution brings to the market is the thing that makes the ecosystem work. They're going to have to move out from behind the partner and vendor and start showing how all this can be orchestrated together.
If they can come out of hiding, if they can become a platform, and make digital investments, distribution could be very well-positioned in this decade.
5) Ecosystem Management
We've been talking about partner-to-partner for 20 years and the need for P2P is more timely now than ever. We have non-transacting partners working with transacting partners, with DevOps, with services folks and those all need to come together.
Determining the systems to bring partners together and manage the constellation of the ecosystem is now an executive-level decision. Instead of it being in a partner programs level or a partner marketing person, it’s now the VP and SVP. They're looking at the technologies they need to report on ecosystem success.
Until now, everything in the partner management technology stack was anchored on the transaction and funded out of transactional dollars. In a non-transactional world, ecosystems are funded with capital dollars. This is a critical change. You have to walk into the boardroom with enough confidence in your data to compete for those dollars. We have to use technology systems to show repeatability and scalability.
Diane Krakora is CEO of PartnerPath with over two decades of experience defining the best practices and frameworks around how to develop and manage partnerships. Schedule a call with Diane if you'd like to chat about how to adapt your program with some of the coming trends in mind.