CHANNEL PARTNERS CONFERENCE & EXPO, LAS VEGAS — Supporting smaller partners that focus on SMBs, and the significance of accelerating M&A and private equity in the channel were hot topics addressed during the “Ultimate Channel Power Panel” on the keynote stage at this week’s Channel Partners Conference & Expo.

The power panel included Andrew Sage, Cisco‘s vice president of global distribution and small business sales; Danny Jenkins, ThreatLocker‘s CEO and founder; Chris Jones, associate vice president of channel sales for the AT&T Alliance Channel and ACC Business; and Tyler Bryson, corporate vice president of Microsoft’s U.S. Partner Group.

When asked why vendors are persistent in focusing only on partners supporting large customers, Jones said the channel is also guilty of this.

“There are millions of business customers out there and the channel hovers to the biggest,” he said. “Inevitably every salesperson goes toward big customers. Small businesses is where the opportunity is. They’re willing to take risks because they don’t have a big, embedded infrastructure. SMBs are entrepreneurs … and there are a lot more of them. A lot of SMBs add up to a large business. If you lose a big business, it’s detrimental. But if you lose a small business, there’s another small business out there.”

Smaller Businesses ‘Punching Their Weight’

Sage said while top execs tend to have more exposure to larger customers, smaller ones are driving growth and “punching their weight.”

“The small and midsize customers are going through this incredible transformation right now,” he said. “SaaS and cloud is opening up opportunities to deploy technology that they never had. They don’t have to buy servers or licenses, or people to install in broom closets. So they’re moving fast and they’re consuming technology at an incredible pace, and this is driving everything … and our company is paying attention to that.”

Jenkins said ThreatLocker started out working with smaller partners and then moved on to bigger ones. However, partners of all sizes receive the same attention and support.

“Small partners are great at talking on Reddit,” he said “For us, we made that decision sometimes to show them more love than the big guys because they can become more your public supporter or enemy.”

Bryson said accommodating all partner and customer sizes begins in the product design stage.

“You don’t just say, ‘Let’s design a great product and hope it works for people,'” he said.

Benefits, Challenges with M&A, Private Equity

When asked about the influx of private equity investment and M&A in the channel, power panel speakers said there are pros and cons to it. Sage said if you’re an partner building a managed services practice, you’re a hot target for M&A.

Jenkins said private equity investment is generally good in the cybersecurity industry. That’s because “they’re going to grow and we’re going to grow. And if you don’t grow, you die.”

Jones said the influx of private equity is a “testament to the opportunity that investors see in this space.” He said it also forces “this part of the channel to mature” and invest in marketing and other resources aimed at business growth.

Private equity is “cutthroat” and comes with lots of demands because they’re looking for a return on their investment, he said.

Bryson said much of the consolidation taking place is being driven by the need for convergence. A good example was CDW acquiring Sirius, which sent a “massive signal” to the market on CDW’s expanded focus in areas such as health care.

“What I’m concerned about is we don’t just need mergers … we need growth and new entrepreneurs,” he said. “There’s not enough capacity, at least in cloud, to meet demand.”