The Changing Partner Landscape: How the Pandemic Fueled Demand for an as-a-Service Model

By Mike Fouts

Mike Fouts

The COVID-19 pandemic is having a significant effect on the entire partner ecosystem – vendors, partners, and customers alike. Some impacts were sudden, and others continue to develop over time, changing the course and reshaping the future for organizations of all sizes across a variety of industries. As employees embrace remote work, and organizations adapt to allow continued remote and hybrid models, I don’t think we’ll ever go back to the “normal” of two years ago. The proverbial genie is out of the bottle and most companies have figured out how they can enable productive remote work while reducing costly overhead. The key, they’re finding, is flexibility.

What has all of this meant for partners? While this might sound counterintuitive, the pandemic has actually increased business for the partner ecosystem, not decreased. The bulk of our partners have experienced significant business growth year over year. I believe this stems from the fact that everyone had to quickly change the way they do business and move to a model that was more remote, almost overnight. This has been a seamless transition for partners as they are, and always have been, well prepared to step in quickly and help customers adapt given their expertise and skill set.

“When discussing cloud, we hear customers talk a lot about wanting the ability to flex up and down as we continue navigating through COVID times,” said Mike Quirin, partner, Alchemy Technology Group. “There are a lot of companies that have experienced workforce contraction, yet they are stuck owning a whole bunch of licenses, because they had just signed long-term license contracts pre- or right at the start of the pandemic. This need for flexibility extends beyond improved IT efficiency and reduced IT costs. When COVID-19 forced workforces out of the office and into their homes around the world, the need for high-quality and secure remote workspaces became critical overnight.”

As we enter this new phase, organizations are demanding flexibility – in the way work gets done, where and when it gets done, and even in the technology used to empower this new way of working. As a result, we’re seeing the emergence of an as-a-service business model.

Demand for Flexibility, as-a-Service Consumption

In my conversations with the partner community, I consistently hear that the biggest shift they’re seeing is the increase in the number of customers asking for operational and technological flexibility. They want to purchase things as a service, more like a utility model.

To address this demand, I predict we’re going to see a big shift toward an as-a-service model. Whether it’s Microsoft, Google or Amazon driving that with their marketplaces, this is the direction customers are moving and that’s how customers want to buy and consume technology and services. Among the partner community, I think we will see a big, rapid evolution in the next 12 months to move their business toward as-a-service. While partners have traditionally resold products, the next year will be a big transition year into hosting a service for a customer and hosting an offering as opposed to selling a product or solution.

Key Drivers for as-a-Service

What’s behind this drive among partners to hosting services and offerings? I think it boils down to a few things. First, it’s clear that uncertainty has been a key factor. In addition, I think that technology has now caught up to the as-a-service model that we’ve become used to in so many other facets of life. For example, we’re accustomed to paying for what we use when it comes to …

… utilities like electricity and water. As a society, we have become accustomed to consumption and consumption pricing. Consumers have realized that this model makes sense and fits their needs. Now it’s evolving into the technology space. Finally, with the sudden impact of COVID-19, organizations have realized they need the flexibility and agility to scale up and down and to pivot in uncertain times.

As the world continues to evolve, I expect to see these consumption- and service-oriented models continue to gain prominence. This evolution will require transformation on the part of the partner as well as the customer. In addition to developing specific new skills and methodologies, there are also implications all the way downstream to your business model – moving from project-centric to services-centric. For example, changing the billing process, payments systems and other operational concerns.

The Changing Partner Ecosystem

Looking ahead, I predict this will be a significant learning year for partners as they find their place in this new landscape. Where do they fit among providers such as Microsoft, AWS and Google Cloud Platform? How do they fit in those ecosystems? What is their role and how do they change and adapt?

I think there’s still some concern and hesitancy in the partner community, that they don’t know if they have a spot in a world that includes those players; however, there is a spot for them to own the integration. I always say to partners that none of the things they do get up, walk out the door and automatically place themselves into Google’s data set. Somebody needs to do that work and it requires a complex, high-skilled effort.

In addition, I anticipate that there will be a shift in customer focus. COVID-19 forced many customers into a reactionary mode to quickly pivot and find immediate solutions – even if they were intended to be short term. Two years in, there’s a shift toward building a strategy for a sustainable business in the “new normal,” and one which anticipates the unexpected.

Mike Fouts is vice president for Americas Partner Sales at Citrix, where he is responsible for the channel strategy and go-to-market sales motion for the Americas channel ecosystem. He has 30 years of channel and sales management experience, with leadership roles regionally, nationally and globally within the Citrix sales and services organization. Prior to Citrix, he held management and leadership positions with a Citrix channel partner, a Fortune 500 financial services company and the United States Golf Association. He holds a computer science degree from Trinity University. You may follow him on LinkedIn or @citrix on Twitter.