Ensuring Successful Cloud Channel Partner Engagement
Cloud-based solutions for all aspects of business are here to stay, and these days they influence how end users are evaluating, choosing and implementing their corporate IT strategy. Channel partners are as important as ever. As stewards of the brands and solutions they recommend, channel partners must be encouraged to stay current, adopt new technology early and be fully supported to retain their reputation as collaborative trusted advisers.
Is this new technology and the shift to the cloud creating an opportunity for customers to bypass the channel? Or does it create new opportunities for channels to develop because of cloud services and solutions?
Some vendors would say that channel partners can be bypassed and customers could work with vendors directly. Gorilla recommends this better approach: Do not replace the channel model with a direct model, but provide channel partners with the education/tools, products and/or services to adapt to this shift in how services and products are delivered:
The continuing channel will circumnavigate B2C as more consumers will buy direct or through the larger online e-tailers—helping themselves to what they need and not being concerned with support for their purchases of software, hardware and accessories.
Yet, in the B2B channel it will be sink or swim for channel partners and the business will have to be centered around professional services, as the financial model also changes. The traditional VAR model will fade out within five to eight years' time. Resellers can now layer business opportunities and create a cash-flow model that will provide for increased long-term financial stability. Business for resellers before had spikes and dips, whereas the cloud model is linear and services are being sold on annuity basis, with most customers renewing year after year.
Cloud relationships will be better if people begin them with the idea of it being a long-term relationship (and this is the path of least resistance). Loyalty is being built into purchase as expectations are set through the marketing and selling cycle—and this is a wise approach.
In most cases, the channel partners and metwork is still the most cost-effective and timely way for customers to receive the best advice, services and products. BUT…
The pace of change is speeding up and won’t be slowing down. Cloud-based solutions are abundant and evolving and channel partners need to embrace this change right now and fully.
There is a five-year window of opportunity to set up for the transition: for things haven’t changed yet, but stay mindful that gradual change is occurring and channel partners need to be proactive now.
What also must change to keep up with the pace? How your channel partners need to be engaging their customers, who now are more than the corporate IT. Business units more and more have their say in setting budgets and are even making more than half of the decisions.
Channel partners may need to re-establish their reputation as trusted advisers—if they are not already in alignment with the vendors and solution providers of IaaS, PaaS and SaaS.
Vendors have the power to drive their channel partners to make the shift … Vendors ultimately need to be the ones who want to drive the culture change in the partner base, to shift the thinking of their channel partners and how they work with the more complex needs of organizations in need of professional service. Buying hardware and software is one thing; implementing it is an entirely different animal. And, incorporating cloud cannot be avoided.
We see the growing adoption of the cloud as a step-change happening again:
For channel partners, who once made revenue off of software, hardware and some professional services, squeezing mild margins out the cloud business is possible but setting up and launching cloud companies is an expensive endeavor to take on. Channel partners with vision would be wise to wrap their services around the offerings of SaaS, Iaas and PaaS as much as they can, and stay current as a professional service provider to configure, implement and support systems being used by companies.
The future of the Channel is businesspeople selling to businesspeople, with 60 percent to 70 percent of the IT spending being chosen by the marketing people and line-of-business (LOB) managers—not the CTO of a company.
People will buy from people. People will believe in people. People will believe in ideas generated by people.
Ultimately and at the end of the day, cloud, and business for that matter, cannot exist without human relationships.
