Channel Chiefs Address 'Chasm Between VARs and MSPs,' Revenue Challenges

Four channel leaders are leading their teams through a “wave of disruption.”

A roundtable of channel chiefs at Channel Partners Evolution in Philadelphia will feature Heather Tenuto, Office Depot‘s senior vice president of sales for SMB Services; Tina Gravel, Cyxtera‘s senior vice president, global channels and alliances; and Eric Martorano, Intermedia‘s chief revenue officer. Richardson Communications president and founder Rachel Thornton will moderate the session, part of the revenue and supplier conference track, sponsored by Cyxtera, Thursday, Oct. 11.

The four experts answered a few questions from Channel Partners about the trends they’re observing in their industry.

Office Depot’s Heather Tenuto

We have edited the transcript for length and clarity.

Channel Partners: How have you witnessed partners evolving in the last year?

Heather Tenuto: From my vantage point, I’ve seen channel partners take a long hard look at their role in the customer’s buying journey. In an “as-a-service world,” where more IT buying decisions are being made by line-of-business executives, many channel partners are realizing they can’t be everything to everyone. This manifests in a few ways. Some channel partners are going deep on targeted products and services, providing a complete solution where they are client-facing along most of the buyer’s journey. Other partners are expanding the breadth of services they represent, which requires them to partner with and trust suppliers in new ways.

Tina Gravel: Fortunately we are seeing more partners embracing our more innovative technologies around hybrid cloud.

Cyxtera’s Tina Gravel

Eric Martorano: Partners are, more than ever, looking to identify ways to differentiate themselves in an ever-changing, and increasingly competitive, market. And this is all happening, in large part, to increase customer value and share of wallet, deliver profits to the business and grow market share.

Rachel Thornton: I still see a chasm between the VARs and MSPs trying to figure out how to sell the as-a-service model, [and] traditional agents still struggling with moving away from traditional telco products to cloud and security products. I believe the industry as a whole is evolving and the providers are collapsing their product portfolio into a simpler offering, which makes it simpler to sell advanced or new products.

Intermedia’s Eric Martorano

CP: What’s a major obstacle that your partners face in today’s industry?

HT: The opportunity for channel partners today is found when they can find and deliver their unique value to the buyer. The channel partner needs his or her own sustainable competitive advantage that rises above the ones touted by their suppliers. The customer has many buying options. Why buy from you today? Tomorrow? And in three years when I am up for renewal? For some partners, the answer could be found in the verticals they service or in the complexity created by the sheer number of cloud solutions being offered, and then how they can potentially work together. Simply put, differentiate or die.

Richardson Communications’ Rachel Thornton

EM: Deteriorating profits. Many vendors promise high margins, but at the end of the day, by the time partners are done selling these products, marketing these products, handling billing, support and service, these “high” margins quickly deteriorate. Partners are looking for vendors who are committed and invested in their success, allowing them to keep their margins and maximize their profits.

RT: Staying relevant. Creating and maintaining value within existing customer base.

TG: Just about every company I know is facing …… a lack of qualified candidates for technical roles. The good news in this is that often shortages encourage collaboration and partnerships.

CP: What’s one thing you hope the audience takes away from your talk?

RT: What the channel chiefs’ focuses are; how they are making their channel more conducive to agents selling their companies’ services, and creating a value add to the channel to help us manage and maintain clients.

TG: I would hope that they would gain better understanding about how we as a provider works and what we can offer the channel.

HT: The role the channel partners play is changing, like everything else in the world. The key is just to ride the wave of disruption. Understand the entire buyer’s journey, decide what role you can play now or you can grow to play in the future, and find suppliers that will fit into the unique customer experience you want to create.

EM: That the partner is the hero. Partners know their communities best, know the unique, nuanced problems that a customer may be experiencing that a vendor’s large internal sales deparemtn could never understand or solve. So partners must be equipped with everything they need to be successful and profitable from the start. It is our responsibility as vendors who are committed to the channel to provide a holistic approach to the partner relationship. We must surround our partners with great, reliable, easy-to-sell products and services with all of the training, materials and ongoing support they need to realize success — one that rewards partners for their efforts and actually treats them like the hero.