So You Think You Want to Partner With the Channel?

By Don Douglas

Due to the explosion in cloud services and vertical applications, new companies are cropping up all over the place. There is some good and bad to this. What used to cost $5 million to develop and deploy now costs $5k and sweat equity for a person working out of their bedroom. The increased choice may sound awesome. But the proliferation of products and companies that can now afford to launch means there is an equally great need to filter through a ton of rocks to find the diamonds.

Many of these companies have determined that their best path to success is to utilize the channel to help them drive sales and find new solutions for their products. From the partner perspective, selecting a vendor who will actually make it long-term is fraught with risk, but we will save that discussion for another day. For now, let’s focus on what companies are doing with the channel.

To begin, here are just a few challenges, and then we’ll examine a real-life scenario.

• Too many new cloud providers with no channel experience
• Saying they want to play in the channel and trying to gain exposure but not even having a real program
• Poorly thought out support
• Limited training options
• Poor partner agreements
• Inability to articulate what they are looking for in new partners

The following is an example I am personally familiar with. Recently, one of the born-in-the-cloud providers has spent a significant amount of time attending conferences, participating in panels and talking to partners. Though we personally believe the company faces a number of challenges, we thought they had a unique value proposition and would be an early mover. When we approached the company about some partnered opportunities, the company was quick to want to gather customer names and sizes. They were short on details of how we would work together. When asked about their formal program and how it worked, they told me that a key executive in their company was driving the program and they would have him get with us shortly. Tick tock, tick tock … still waiting. In the meantime, the company informed us about uncertainties in rolling out their partner program, that they are considering international partners first. We were told that although they are not sure how to work with us for now, they would still like us to introduce them to our customers while they are trying to figure this out. Keep in mind we have no formal relationship in place, they have no track record of performance, limited industry recognition, no official parameters to get support, et cetera. So basically they are asking us to take a leap of faith. Because our team is unwilling to risk customer relationships no matter how cool the prospect of the partnership, we are uncomfortable moving forward in this scenario.

I’m not saying every new provider is going this route, but this isn’t the first time we’ve had this experience. Following are some suggestions that I believe would help new companies entering the channel:

• Come to channel events to learn. Be open with partners that you really don’t have a program yet. Seek advice.
• Don’t speak at channel events or give the impression you support the channel if you really don’t have a program nor are empowered to do so.
• Find a sponsor, board member or investor that has strong ties to the channel in order to properly shape your program to suit the channel’s needs.
• Seek guidance from a third party like Channel Partners or a specialized group that focuses on the channel such as The 2112 Group.
• Make sure key stakeholders in your company are fully on board with their commitment to the channel.
• Do your due diligence of channel hires to make sure that they really have what it takes to launch a channel program. Keep in mind that association with the channel for many years doesn’t necessarily qualify one to launch a program.
• Follow-through is huge in gaining credibility. Don’t start your relationships by making promises or statements you don’t intend to keep.

President and CEO of Liquid Networx, Don Douglas has worked in the technology field for more than 30 years. During his time at the helm of Liquid Networx, the company has grown dramatically, developed channels, brought many new products and services to the market, gained brand recognition and garnered numerous accolades from clients and partners. Douglas is a member of the 2013-14 Channel Partners Advisory Board.