How Partner Programs Are Changing Alongside Channel Disruption
One-size-fits-all? Not in 2022.
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Stefanie Hammond is head sales and marketing nerd at N-able. She believes that in the modern channel, relationships and community are much more important than they have been in the past.
“People want to deal with people,” said Hammond. “Trust is a huge part of the buyer’s decision-making process, which is why focusing on educating the channel and learning more about partner challenges is so important to the sales journey.
“At N-able, we’ve gone back to our roots. The focus is on developing and growing our partner community. The MSP institute, the Head Nerd team and the partner success managers are all non-commission-based programs at N-able. Our main objective here isn’t to make sales, it’s to get involved in the partner community and learn about the issues they are facing so we can help them grow as a business. This enables sales— which is the goal — but not the immediate objective.
“We find that many people in the partner community fell into the MSP marketplace because they knew the technology but didn’t know about business or marketing. It’s been our job to teach them the right skills, so we can help them succeed. Because we’re not blindly focused on the bottom line, we develop stronger relationships with our partners and as they grow, we grow.”
Gavin Jones is director of wholesale channel at BT Wholesale. He points to how end-to-end digital experiences, such as self-serve tools, are now being championed in the channel to give partners more control of their account, offerings and acceleration.
Additionally, brand association is now a priority for many channel partners who are getting to grips with marketing communications and building their own identity.
“By utilising the relationship with the provider, partners can encourage trust and loyalty across customer bases, which is critical to the success of a business. With increased marketing resources, partners provide reassurance to existing and new customers, which can have a huge commercial impact,” Jones said.
James Munroe, channel director at Trend Micro, thinks partners are looking for two main things in a program. These are true enablement of skills and how vendors will protect them in a deal.
“Consumption and differing marketplaces mean the days of badge colours being so important are long gone and partners want vendors to clearly demonstrating how they are shifting to the new online marketplaces such as AWS. Whilst programmes will always be an entry point for partners, the rigidity of past years of accreditations and differing exams are gone and partners want true commercial flexibility from vendors to fit their agenda and not that of the vendor,” said Munroe.
John Brown is director, EMEA channels, at cloud security vendor Menlo Security.
“The availability of everything in a modern partner program, including deal registration links, promos and incentives, vendor assets, competitive battlecards, pricing and SKUs, should reflect the way people work today. This means they are available wherever they are, whenever, and on whatever device they choose to work on,” he said.
“To succeed in a modern channel, a vendor’s program and its contents should be visually appealing and engaging, rather than a drab afterthought. Features like the ability to compare a number of competitive products side-by-side should become the norm.”
Lewis Simmonds, UK channel & MM/SMB director, HPE, notes the uptake of as-a-service offerings throughout the channel. However, the question of, “is everything-as-a-service really a thing for partners?” is still asked.
The short answer, he says, is “Yes, it is.”
“Partners are a key element of our vision to make digital transformation affordable and secure, and to introduce the concept of ‘a cloud experience everywhere.’ How this could look like was tested in 2019, when we piloted our HPE GreenLake cloud services with partners. The focus was on making pre-configured architectures available in t-shirt sizes in as few as 14 days to small and medium customers through the Swift Sales Program. With success – after three years and substantial investments in enablement, activation, and progression – we are seeing more and more partners turn HPE GreenLake into repeatable business.
“Another development we see is resellers launching their own managed cloud services. They are increasingly leveraging white-labelled cloud services with limited upfront investment and global networks of service providers. [These are] provided by vendors to offer their own branded cloud solutions, retain the customer relationship end-to-end and elastically scale services in line with demand. In the coming years this market will see significant growth, with data sovereignty, security and compliance as some of the key drivers.”
Patrick Aronson, CMO at Westcon-Comstor, says transformation and new operating models will be critical for all businesses to succeed in 2022 and beyond.
Selecting the right technology, building the right partnerships and hiring the right people are some of the major challenges that partners and users will face in the post-COVID era.
“This creates immense opportunity for the channel community,” he says. “We have already seen how many partners have reinvented themselves by building managed services business, and we expect demand will continue to fuel growth in 2022.
“Managed services are rapidly displacing traditional resale as the way partners profit in the channel. End users want to automate or outsource more of their noncore functions so they can direct precious internal resources to focus on the parts of their businesses that generate the most value. This, coupled with increasing software dominance and the opex-over-capex approach to funding digital transformation initiatives, is the key driver behind this change. This reality opens up an abundance of revenue growth opportunities for channel partners.”
Puppet has recently changed its way of managing channel partners. Instead of the traditional tiered revenue approach, the company is implementing a competency-based approach.
“Traditional channel partner programs are generally tied to revenue,” explained Leslie Lorenco, global director, channel sales at Puppet. “The dollar amount a channel organization transacts within a year determines their partner tier. Based on their tier, the partner receives certain benefits, rewards or incentives. While there are typically additional criteria, revenue is the predominant requirement.
“A competency-based model offers an alternative approach. Partners are encouraged to achieve competencies, or specialisations, that align with their unique value proposition. Revenue is still a component, but not the primary driver.
“This type of approach is extremely important to build stronger relationships with partners, have them deliver value to shared customers faster, and is necessary for growth companies who are expanding into new markets.”
“The past two years have seen dramatic changes in what customers expect,” said Nick Ward, alliances manager at Liferay UKI.
“Initially businesses had to rapidly accelerate their digital transformation initiatives, throwing them out of long-established comfort zones. That sense of discomfort has only been exacerbated by increases in cybercrime throughout the pandemic and the more recent supply chain issues.”
Ward said it’s critical that partners provide their customers with solutions that help meet these needs.
“Whereas they would once have simply been able to sell off-the-shelf solutions, they now need to be proactive and tell customers about problems they might experience before the business itself identifies them. In order for them to do so effectively, they need to work with solution providers that are forward-looking and understand how the channel is evolving.”
Nimisha Overton is EMEA partner program lead at Canon EMEA.
“Over the past 18 months we have been in consultation with our channel partners, gathering their feedback on all aspects of operating in the channel. [This includes] how they would like to see partner programs evolve to best support them.
“Whilst we work with a vast range of partners, dealers and resellers, one message came through clearly – ‘one size does not fit all.’
“Nowadays the channel wants a program that delivers flexibility and tailored support. [It must be] allied to support from a vendor with a broad product portfolio that can cover a range of end-customer needs. The past few years have been tumultuous, and change has happened rapidly for lots of our partners. A program that is empathetic and recognises this is what is needed. The modern channel requires a partner program that lets partners pick their own path, supports growth and encourages diversification. One size really does not fit all.”
Jo Dunkley is business development and marketing director at channel marketing firm, Coterie.
“Partner programs are constantly evolving and have been for the past decade,” she said. “From our research, this evolution has been expedited because of the pandemic, which became a ‘hard refresh’ for many channel players. The channel ecosystem now requires a different type of support from vendors.
“Tiered partner programs are over, although many vendors have yet to fully recognise this. Partners want segmentation based on skills and specialisations — not how much revenue they’ve made by doing transactional sales. Partners need help differentiating and this is where forward-thinking vendors will win out over the next few years – proving support and programmes that help their partners stand out from the crowd.
“What we’ve found talking to partners is that channel marketing, that’s used to fund channel programs and support partners, is often left as an afterthought when it comes to initial strategic discussions. For the channel to thrive, this will need to change in the future, and I think we’ll see a shift in thinking from vendors, as they race to drive their subscription-based models and realise the importance of the channel ecosystem in serving customers and succeeding in this area.”
Francis O’Haire is group technology director for UK and Irish distie DataSolutions.
“The vast majority of established software vendors are working to transition their products to cloud services and their perpetual licensing to subscription and consumption licensing,” he said. “Channel partners who have relied on large upfront deals to fund their businesses and commissions need to adjust to the new programs. Rather than individual deal sizes, the value of monthly recurring revenue and service consumption become more important.
“Vendors are asking their channel partners to integrate their solutions into managed services consisting of an ecosystem of complementary technologies and services. Partners need to consider specialising either in solution areas or vertical markets so that they can differentiate their offerings.”
Karl Roe is digital transformation and customer success, Nuvias Group. He says channel programs are changing to reflect the increasing adoption of XaaS.
He points to toolkits that offer partners a ready-made template to start transacting in a XaaS marketplace. Those that also complement the standard offering with their own specialist services will fare well in the current and future environment.
“Speed of reaction in fast changing times is ever more important to gaining competitive advantage,” he said. “Programs that can support partners to graduating fast through developmental stages – for example by gaining vendor accreditation – will make all the difference. Nuvias has set up a special program called nu|RAP with this objective, offering a rapid start for partners alongside a long-term partner enablement plan.”
Ellen Velickovsk is managing director at telXira. She says that no single platform can deliver all the services that satisfy all customer requirements.
“It has therefore become essential to make platforms easy to integrate. For example via APIs, and to find the right partners,” she said.
“Partnerships are essential to better serving the changing demands of today’s channel landscape. By partnering, businesses have the ability to offer their customers best-of-breed solutions that are tailored to their needs and can better overcome their challenges.
“It’s become more important than ever to find the right partner not only in terms of the technology, but also in terms of ethos. Partners need to be on the same page with shared values, shared successes, and a shared vision for moving forward with confidence.
Stewart Grant is partner manager at Irish MSSP Integrity360. He says in the past, partner programs have often been hoop-jumping exercises. They resulted, he says, in a box being ticked, but limited value outside of the program badge. But as partner programs have evolved, they have become more focused and valuable with end results that benefit the partner and program owner.
“Certifications are no longer generic; they are more heavily focused on specific solutions and technologies,” he said. “This results in specialized classifications to help differentiate the partner and demonstrate higher levels of expertise. The partner has the opportunity to become a specialist in a particular technology set and this is recognized rather than historic older programs where partners are ‘generalists.’
“Measurements outside of certifications and revenues are now increasingly being added in. New logo business, marketing and support are all being included to measure partners overall capability. Again, this gives the partners that invest the best opportunity to succeed and be valued.
“The highest tiers of partner status are becoming harder to achieve. Whilst this could be seen as tedious and involving more resource to complete, they are in fact benefitting the partners who invest over those who don’t. The value in return is increasing with better direct management support, trust, and funding being available, along with more partnering opportunities.
“Overall, partner programs are more than just a badge-getting tick box exercise, they are now value-driven partner programs designed to give partners a real opportunity to differentiate themselves in an often crowded marketplace.”
Ian Rainsborough is international channel and partnerships director, Exterro.
“We have seen increased demand for self-service and expectation from our partners to be able to help themselves before engaging with our sales teams. This covers a broad gamut of processes, from being able to download marketing material to enrolling in education programs. Whilst these are all extremely beneficial and encouraged, we appreciate the need to liaise with our partners to optimise opportunities, with an open and supportive working relationship.
“COVID has forced many vendors to work harder to maintain relationships with channel partners. But we refuse to give up the element of human touch. We recognise how interaction with our sales teams can add huge value to the sales process and help our partners close bigger and better deals in a shorter time frame.
“It shouldn’t be a question as to whether to build a channel partner program/relationship, but rather, how best to optimize one. We are continually growing our channel team to help our existing, and new partners grow with us and share in our success.”
Ian Rainsborough is international channel and partnerships director, Exterro.
“We have seen increased demand for self-service and expectation from our partners to be able to help themselves before engaging with our sales teams. This covers a broad gamut of processes, from being able to download marketing material to enrolling in education programs. Whilst these are all extremely beneficial and encouraged, we appreciate the need to liaise with our partners to optimise opportunities, with an open and supportive working relationship.
“COVID has forced many vendors to work harder to maintain relationships with channel partners. But we refuse to give up the element of human touch. We recognise how interaction with our sales teams can add huge value to the sales process and help our partners close bigger and better deals in a shorter time frame.
“It shouldn’t be a question as to whether to build a channel partner program/relationship, but rather, how best to optimize one. We are continually growing our channel team to help our existing, and new partners grow with us and share in our success.”
The channel ecosystem is evolving rapidly – and vendors have been forced to adapt their partner programs in response.
Vendors now face growing complexity when they’re designing their channel programs. They must navigate the move to cloud and SaaS and the emergence of new service-based business models. They must also accommodate an increasing number of partner personas populating the channel. One of the biggest mistakes, therefore, is to treat all partners the same – there is no ‘one size fits all’.
But it’s not just being able to differentiate between partners. For some vendors, it’s out with traditional tiering and in with specialisations. For others its a focus on the partner experience (PX) and ensuring a frictionless experience for partners.
In the slideshow above, channel execs weigh in on what is happening in the channel and how they see partner programs evolving.
Want to contact the author directly about this story? Have ideas for a follow-up article? Email Christine Horton or connect with her on LinkedIn. |
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