Forrester’s McBain: Non-Transacting Partners, Nontraditional Buyers Are Remaking the ICT Channel
Changes in the ICT channel can be summed up in two ways, says Jay McBain, principal analyst of channels, partnerships and alliances at Forrester Research.
First is the demographic shift within vendor partner programs, and second is the rise of tech buyers who work outside of traditional ICT departments. These two trends are transforming the traditional channel is ways that we are only now beginning to understand, says McBain. He will present his ideas at the upcoming ImpartnerCON19 event scheduled for May 1-3 in Park City, Utah.
ImpartnerCON is expected to attract a who’s who of channel luminaries including McBain and Larry Walsh, founder and CEO of the 2112 Group, plus channel chiefs from the likes of Western Digital, Adobe, Autodesk, CommScope and JDA. (Members of the Channel Futures Think Tank, including Lief Keopsel, senior director of channel marketing from Fortinet, will also be on hand.)
McBain is scheduled to deliver a presentation entitled, “Everything You Need to Look Out for in 2020 and Beyond to Own the Next Decade.”
Ambitious? Over the top? McBain good-naturedly says, “Yes!” But, he adds, the changes are underway in the traditional demand the “the biggest thinking possible.”
Let’s start with a message that McBain has been promulgating for the last year or so. This is the idea that the biggest growth in the ICT channel, measured in terms of new entrants, is coming from nontraditional organizations that find themselves influencing or recommending digital innovations to their customers. Think CPAs, HR brokers, digital media companies, marketing organizations and more.
“A month ago, we heard that Microsoft was bringing on 7,500 partners a month,” says McBain. “If you look closely at them, you see that about 80 percent are ‘non transacting.’”
In addition to Microsoft, Amazon and Google are also getting in on the act. AWS is adding 3,000 partners a month, while Google is signing up thousands per quarter, McBain says. Instead of resale margins, SPIFs or rebates, these non-transacting influencers want enablement. Why is simple: They don’t rely on vendors for remuneration; they get that from their customers. Instead, they want tools to sell technology and sophisticated assistance from vendors to aid in that cause.
Taken as a whole, these nontraditional partners are putting significant pressure on vendors to rethink their partner programs. Instead of monolithic tiers or resell benefits, vendors should think in terms of ways to assist very different partners who now inhabit their partner ecosystems, McBain says.
As for traditional partners, they should consider the amount of technology spending that is being done outside their purview. With each passing day, more dollars are flowing through the hands of executives who work outside of traditional technology departments.
“Line-of-business buyers account for two-thirds of tech spending today. In many organizations, chief marketing officers spend more on tech than chief information officers,” McBain says.
Partners who only sell infrastructure, which is typically bought by ICT department heads, run the risk of missing out on the bulk of ICT spending, he insists.
So how can traditional partners attract more of those dollars? Change your psyche. Yes, your business is thriving today, and yes, it will for the foreseeable future, McBain says. That’s because SMBs have no better way to satisfy their cybersecurity, networking, storage and data management needs than turning to a local trusted ICT adviser.
But traditional partners who want to thrive in the channel ecosystem of the future will have to think beyond infrastructure, McBain says.
Consider customers: As their traditional businesses come under pressure from global competition, technological disruption and more, they look to technology to solve their problems. Partners who can code, integrate applications and manage data are going to be valued more than those who can merely keep “the digital lights on.”