By Diane Krakora, CEO
Last year’s study on the State of Partnering revealed ten key trends changing the channel. Here are five:
Resale is becoming irrelevant. The continued shift to on-demand or subscription-based consumption models has a profound impact on the channels that define, develop and deliver solutions to end customers. The need for channel partners (solution providers, consultants, system integrators, cloud aggregators, carriers – whatever you call them), is not going away. On the contrary, in the new customer life cycle that emerges with on-demand consumption models, third-party perspectives and trusted advisers play a significant and important role.
The power is shifting to the partners. 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. The channel partners of the future will manage the entire customer life cycle — 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 adviser. 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 the customer relationship.
More partnering is happening all around. As the transaction model shifts to the cloud and channel partners become more ingrained in developing full solutions for customers, they will develop more partnerships as well. We’ve been talking about peer-to-peer – or partner-to-partner – relationships for almost a decade. In the age of reselling in 2006, the thought was almost unimaginable. VARs only partnered with other VARs under duress — in cases when they needed to partner for the bench strength to service customers with dispersed regional offices. This year, nearly 40 percent of solution-provider respondents reported regularly partnering with an average of three to five other solution providers. And 30 percent of respondents regularly partner with six to eight other solution providers. This is a 10 percent increase over just last year.
Customers are demanding specialized solutions. We’ve been talking about solution providers or partners as a homogeneous set, but throughout the world there are many micro-segments. They are as different as your fingerprints, each special and unique in their own way. We expect their uniqueness and differentiation to flourish over the coming decade as channel partners design more solutions specific to customers’ needs. Those solutions could be for vertical markets, such as health care, retail and finance, or departmental solutions such as marketing analytics, customer management and support enablement. And of course we will also continue to see solutions developed around specific technologies, like network management and disaster recovery.
The distributor’s value is moving to solution aggregation. Most of the global and national distributors have been struggling to determine their value in a cloud world. Gone are the traditional needs of warehousing, breaking palettes, packing orders and maintaining credit terms. Solution providers of the future don’t need a warehouse or a bank to be successful and profitable. They will need help developing solutions to their customers’ business opportunities, configuring products that go together and delighting customers with recommendations, insights and services.
Diane Krakora is CEO of PartnerPath with two decades of experience defining the best practices and frameworks around how to develop and manage partnerships.