Recurring Revenues: Big Tech Companies Finally Assist Channel Partners

When the Channel Transformation Alliance surfaced this week, it signaled that big technology companies -- including HP, Microsoft, CA Technologies and Symantec -- are finally ready to help VARs and MSPs to develop recurring revenue business models. In some ways, the Channel Transformation Alliance reminds MSPmentor of the old MSP Partners initiative, where vendors helped channel partners to shift from break-fix business models to managed services and now cloud services business models.

The Channel Transformation Alliance founding members include Hewlett-Packard (HP), Microsoft, CA Technologies, Symantec, APC, Kingston, SNIA Europe and Solution Provider Community International. Ingram Micro also is deeply involved, with veterans like Jason Beal, senior director, Software and Services, EMEA, assisting the effort. Beal previously helped Ingram Micro to build its managed services and cloud services initiatives in North America.

The Channel Transformation Alliance was built on the premise that, in order to be successful in marketing, sales and support, technology resellers need to evolve their business models, internal operations and go-to-market strategies to meet the new demands of today's end-users when it comes to end-user behaviors and buying preferences.

Monthly Recurring Revenues

That's a long way of saying big vendors -- Microsoft, HP, CA, Symantec, etc. -- are finally doing what small MSP software providers have done for nearly a decade. Within the managed services market, software companies that specialize in PSA (professional services automation) and RMM (remote monitoring and management) have hosted thousands (yes, thousands) of events to help VARs and MSPs generate predictable recurring revenues. Most of the early efforts involved managed services.

Now, big vendors seem to be assisting the effort -- especially since they want channel partners to increasingly sell cloud services and SaaS applications. Together, the Channel Transformation Alliance members have put together a group of experienced educators, trainers and consultants from each company to help VARs develop four areas of success:
  1. Develop a game plan for success with cloud computing
  2. Expand services delivery with a specific focus on IT Lifecycle Management
  3. Gain a competitive advantage with Advanced and Emerging Technologies
  4. Learn and implement best practices for business operations and management

Next Moves

To get the word out about the Cloud Transformation Alliance program the companies have embarked on a series of live international events that began on Sept. 7 in London with an event entitled "Gateway to the Cloud." More events are being planned in the UK, France and Benelux. The Cloud Transformation Alliance website also includes online training through Webcasts, e-Books, Best Practice Guides and white papers to educate VARs about opportunities to become more competitive in the cloud marketplace and ultimately grow profits.

The point here is that big It vendors are trying to help VARs and MSPs master their recurring revenue models. The Alliance has even put out a sheet entitled "The Rule of 78" that explains the benefits of selling monthly recurring revenue-based contracts as a portion of your business. You can get the answer to this question, and many others, by signing up for the Channel Transformation Alliance Program.

News of the Cloud Transformation Alliance program came to us from Ingram Micro, the wholesale provider of technology products and managed services solutions that has been in hyper-development mode around the cloud ever since launching the Ingram Micro Cloud Marketplace for VARs and MSPs in June, 2011 just before the beginning of the Ingram Micro Cloud Summit. But Ingram Micro made clear that the Channel Transformation Alliance is not an Ingram Micro program. Rather, it is an industry alliance and channel-wide initiative.

Additional insights from Joe Panettieri.
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