The challenges data-center channel partners face today are more numerous and complex than ever.

September 11, 2018

5 Min Read
Growing Pains


Frank Eagle

By Frank Eagle, Vice President of Business Development, QTS

Channel veterans know that the adage, “the more things change, the more they stay the same,” is well-applied in most tech markets. And yet, having been on the front lines of the data-center channel for more than 20 years, I believe that this particular market is very different from just a few years ago. The challenges data-center channel partners are facing today are more numerous and complex than at any previous point.

There are several particular pain points being felt within the current data-center channel; some aren’t all that unusual for a technology vertical, but many speak to the incredibly rapid expansion of the data-center market and the pressures that customers are feeling to join the “cloud revolution” sooner rather than later.

In conversations with channel partners and their customers, the most consistent challenges I hear about include:

The gross overpopulation of channel agents. Quite simply, when the data-center industry took off, agents sprouted up like weeds — to the point that the options are overwhelming for potential customers, and the competition within the channel is stifling. For the most part, agents don’t mind some competition, but with so many players vying for only so much business, chasing data-center deals has become as difficult as closing them.

More agents also mean more data is flowing to customer prospects, and with this flood of new information comes the increased risk of confusion, rumors and flat-out deception. The burden is now on the established, long-time data-center agent to ensure that potential customers are getting the straight story on a potential supplier’s suitability and stability, as well as its ability to address specific needs — insights that can only come from experience.

Loss of control = exposure to churn. The cloud has changed everything for channel partners and their customers. Partners who have worked for years with organizations on custom colocation projects are finding those customers moving to public cloud solutions like AWS so that they have greater flexibility, visibility and control. It is now virtually an everyday fight to renew contracts and avoid revenue churn resulting from moves to the public cloud — sometimes driven by their service providers’ lack of a viable cloud offering.

The best way to reduce exposure to churn is to work with providers that can provide both private, single-tenant cloud solutions and managed public cloud services. Vendors that have all of those bases covered, with ownership of their own cloud and not just a series of partnerships, will ultimately provide their partners and customers with the least expensive and easiest path forward to the cloud, and eliminate the excuses customers have to seek an outside solution.

Customers are smarter and more demanding than ever before. Based on both anecdotal evidence and hard data, it’s clear to me that customers are better prepared for data-center sales interactions and have a higher level of education around technology specs, pricing and case studies than any previous era. Customers are increasingly hiring procurement managers or …

… consultants (specifically for major tech investments like data centers) that come armed with sophisticated questions, demands and contract specifics that display the same level of comfort with the subject material as any agent.

You, in turn, must be prepared for more complex interactions, and that requires a commitment to training on the part of your upstream partners and providers. The agents that embrace training and sales enablement as part of their regular routines will continue to thrive in this time of customer empowerment, while those who either ignore or don’t have access to training will ultimately be dismissed.

Lack of creativity and flexibility among partners. There’s no way to overcome the first three problems without going to market with some creativity. Channel partners in the data-center space need to take a page from their counterparts in the security market, who act as de facto consultants on most projects well after their final deployment of the technology. Data-center agents must promise their customers similar post-sale value. This can include involvement in joint marketing activities, providing complementary products and services above and beyond those in the original contract, or simply being more flexible on terms. The goal is to build long-term, mutually beneficial partnerships among service providers, agents and customers, as it’s the only proven way to ensure a committed, loyal and plentiful channel.

In the decades since the data-center market took off, the competition has never been stronger, the customers have never been as powerful and the technology options have never been as varied or complex. Still, it is, in fact, a terrific time to be a data center channel partner. Opportunities continue to be plentiful and service providers are increasingly going the extra mile to ensure that their channel partners are well-treated, have access to the best sales-development tools and are marketing top-of-the-line technology.

Frank Eagle is vice president of business development, leading a national team responsible for driving revenue through partners at QTS. Under his leadership, the channels team’s contribution to QTS has grown from 22 percent of total revenue to 52 percent over the last three years.  Prior to QTS, Frank held leadership positions in channels at several technology companies including Aspect Communications. He has also been in sales management at IBM and head of marketing at Ernst & Young Consulting’s (now Capgemini) information technology business.

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