How the Digital Transformation is Impacting the Vendor-Partner Relationship
The changing channel is throwing vendors and partners alike for a loop. The market has changed, business models are changing and emerging technology means a near constant reevaluation of product and services offerings. How will these changes impact the vendor-partner relationship? We caught up with Margie Sims, vice president of sales at cloud computing solutions provider Dizzion, and asked her how the digital transformation is changing channel programs, partner demands of vendors and what channel chiefs need to consider in 2017.
The VAR Guy: What expectations did you have for 2016 that weren’t realized?
Margie Sims: In 2016, the number of channel partners delivering cloud-based services didn’t grow to meet modern business needs like we anticipated. But this year, organizations are going to continue to adopt cloud-based services as managing hybrid IT environments presents added complexity. This, in turn, creates opportunities for cloud-based services, managed services and consulting. From the partner perspective, this aligns with a growing transition to a recurring revenue model and move away from a hardware-only focus.
TVG: VARs are scrambling to integrate cloud services and establish recurring revenue streams to compete in the new digital landscape. What strategic advice can you offer them?
MS: The biggest priority for VARs should be to narrow their focus and become a subject matter expert in a single vertical. If a VAR knows the ins and outs of what exactly customers are looking for from a cloud service in a given vertical, they’re much more likely to see that recurring revenue stream they’re looking for. For example, in the healthcare industry, if a VAR can provide a way to ensure any and all data is totally secure and meets HIPAA compliance requirements, they will quickly be able to dominate the vertical, as opposed to struggling to even get a foot in the door in multiple sectors.
TVG: How is the relationship between vendor and partner changing?
MS: We will see a big shift from the traditional reselling model to a monthly recurring revenue model. Instead of a one-time transaction, the orientation will continue to shift to a service provider approach. This shift is imperative because the vendor-VAR relationship is no longer the simple reselling partnership but rather one that requires continual support, education, and value-add for the customer on both ends.
TVG: What specifically are partners asking for in terms of education?
MS: Partners are looking for a vendor to arm them with the necessary skillset and knowledge to be an expert on the product they are selling. This level of education is more time consuming, but it benefits both sides as the vendor will see an increase in revenue and the VARs can share insight into additional, complimentary offerings. In 2017, expect to see the VAR asking for deeper levels of guidance and support, but also delivering more than they have in the past.
TVG: What new elements of channel programs are partners asking for? Which pain points do they address?
MS: The biggest change in what partners are asking for is the level of education. In past years, partners wanted just enough information to start selling but as the channel becomes much more digitalized and evolves more quickly, partners need to lean more heavily on the vendor to help them be successful. This will alleviate a number of stressors that arise when a VAR is unable to answer a customer’s questions or address their specific needs. VARs will be much more confident heading into sales calls since they know they have the arsenal to meet a customer’s demands.
TVG: What do channel chiefs need to consider when considering their 2017 programs?
MS: As the rise of the cloud continues, channel partners and vendors must shift their relationship – developing more trust between the two parties. The vendor-VAR relationship is constantly evolving, and while that is exciting in many ways, it can be unsettling for both sides as they are venturing into unfamiliar territory. Digital disruption is happening all around us and in order for both sides to maximize their relational benefits, the most important step for the partner is to put their full trust in the vendor and allow them to lead the way through this time of transition.