Partner Program Complexity Challenges Vendors

For all the talk of just how complex technology solutions have become, there's one subject that puts the complexity of generative AI, cybersecurity and cloud computing to shame — the good old-fashioned partner program, which is going through its most significant change in the history of the channel. 

If you want to put fear into the hearts of any channel leader, just tell them their partner program has fallen behind its rivals or that partners are no longer responding favorably to the elements of the program. In just the past few months, there have been significant announcements from Microsoft, IBM and HPE and others regarding major revisions of their partner programs. Vendors have spoken about the huge financial investment they made in this program upgrades. IBM, the pioneer in partner programs from the channel’s earliest incarnation around medallions, goes so far as to drop the name of the longest-running program to show how it is breaking from the past. 

For those who believe in saving the best for last, the executives who remained for the closing-day sessions of last week's Canalys Forum North America in Palm Desert, California, were treated to something very special. In a discussion headed by Canalys’ analyst Lisa Lawson, longtime partners and vendors talked about what they think a next-gen partner program should look like in an age of services-led models, co-selling and multilayered sales initiatives. 

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Lawson’s discussion included the following: Mark Barrett, IBM; Louise McEvoy, Trend Micro; Bill Hustad, Okta; Richard McKinnon, DVBE; Travis Woods, Fort Point IT; and Jason Kraft, Computacenter. The speakers all brought in views from their different walks of life in terms of how partner program evolution is impacting providers of technology or partners selling directly to customers. McKinnon and Woods were both vocal that today’s vendors must tailor programs to assist partners who are small businesses vs. large, volume-based organizations in vendor programs. Over the years, that has always been difficult for vendors to address —or resist. 

Canalys’ Lawson said the major trends impacting partner program development include simplifying access to benefits, vendor and partner collaboration and incentives.

“When it comes to collaboration, that is the major buzz word with a greater emphasis on co-planning, co-marketing and co-innovation,” said Lawson, whose firm is now part of the Informa organization that also owns Channel Futures and the Channel Partners Conference & Expo.

Related:Canalys North America Forum Highlights: HPE, Dell, Partners & AI

Lawson referenced Microsoft’s recent partner program revision to a points-based system as the trendsetter in the market that other vendors are studying so they can adapt to such a formula.

“Co-selling and co-innovation mean something different to everyone. The industry needs to define best in class co-selling,” Lawson told the audience.

One thing is clear, based on Lawson’s research at Canalys: When co-selling is built into a partner program, deal sizes improve, resulting in greater revenue opportunities, and the rate at which sales close shrinks, thus accelerating the sales process.  

But just when vendors were starting to get their arms around the latest formula for success in partner program structure, along came generative AI and a shift to recurring revenue and services that are changing the foundation of such program.

“AI, automation and data sharing are changing partner programs when it comes to incentives, making PRM (partner relationship management) systems more predictive and finding where there are gaps,” Lawson said. 

Partners are embracing that point said, DVBE’s McKinnon.

“The points system is a genius idea. It helps the channel and helps compliancy to the end client. The point system is the best direction the channel is going in a long time,” he said. 

Fort Point’s Travis was quick to add that whether it is a point system or another inventive program, vendors need to help partners “create a seamless transaction so we can get the pricing and information for the client when it comes to different support levels.” It was clear to the audience after that exchange that perfection in programs can never be attained due to the nuances, subtleties and different partner models. 

From Barrett’s perspective, IBM’s recent partner program changes were driven so the company’s indirect sales channel could get “self-service on pricing for customers quickly and determine their margins, allowing for the delivery of very predictable quotes to customers.” For those industry geeks who get excited about partner programs the way nerds do about tech advancements, there has been a significant shift in buying influence which is driving all this change.

“Frankly, we talk about our relationships and clients are really important. Like other vendors, we dictated the routes to market on how customers would buy. That shifted as a result of a heavily informed and smart customer. It is about simplification,” Barrett said. 

There are other vendors that had to shift programs to embrace the global nature of selling technology. Cybersecurity giant Trend Micro recently refreshed its program, based on regions and territories to one global program, McEvoy said.

“We had to pull that in, so we were a true global program,” she said.

As McEvoy pointed out, Trend Micro had to plan for shifts in purchasing and influencing sales. She used the example of a services-based partner's focus on health-care compliance working with customers who purchase though a marketplace. Developing a program to incorporate that scenario, she said, was important to Trend.  

For vendors like Okta that are rolling out the early versions of a partner program, a points-based system may be something in the future.

“A points-based model is something we need to look at but we have to get through the evolution and change and continue to reinforce incentives and access to tools and enablement,” Okta’s Hustad said. 

For Compucenter’s Kraft, co-selling must be an essential element of any vendor partner program because it will boost sales. From his experience, when channel partners and vendors strategize on their largest customers, it opens new doors and opportunities.

“Vendors will learn more about us and our services, and then we start talking about four or five accounts, not just that one — and what we can do together to beat the competition. There is a true partnership and commitment and oversight on both sides,” Kraft said.

For all the talk of technological advancement, attendees realized today's partners and vendors can't succeed without the right elements baked into their partner programs.