Fundamental Changes in the IT Market
Every IT vendor operating in the channel today has largely mastered the basics. They have tiers in place that reward channel partners based on sales generated and the amount of time and effort a partner invests in developing the expertise required to drive new sales. Rewards associated with higher level tiers of a channel program are typically augmented with additional access to sales enablement programs and technical training. But as the IT industry embraces 2019, one thing is already apparent. Relying on a basic channel program is no longer a guarantee of future success. The IT market as it has historically been known, has fundamentally changed in the last year. With that transition in mind, here are five areas Channel Leaders should focus on to stay relevant in 2019.
Five areas for Channel Leaders to focus on to ensure their approach to the Channel Stays Relevant in 2019
1. Aggressively Embrace Managed Services Providers (MSPs)
MSPs have been around for decades. However the way organizations consume IT is fundamentally changing in the age of the cloud. More organizations than ever are now treating IT as an operational expense. An expense paid for on a monthly basis. Therefore, MSPs clearly need to make some adjustments to how they price their services to align with this new reality. At the same time, MSPs are looking to work with IT vendors that embrace complementary recurring revenue models. The advantage being they don’t require them to invest a ton of their own capital upfront, to deliver that service.
In some cases, this means working with a so-called borne of the cloud partner to resell a managed service provided by the vendor under a white-label. In other cases, it means selling a product to the MSP that is paid for over a series to monthly installments that matches with the way MSP generates revenues.
Whatever the approach, IT vendors need to find ways to align themselves with MSPs that are starting to exercise more influence over how and what IT products get consumed by their end customers.
2. Encourage Partners to Partner
In 2019, a typical IT solution consists of five or more products. Therefore, very few channel partners have the skills required to master every conceivable use case. Channel leaders can increase the total addressable market for their offerings by encouraging partners to leverage their complementary expertise. To accomplish this goal, channel managers need to intimately know the level of expertise each partner can bring to bear. This knowledge will help channel leaders determine, ahead of time, which partners consider other partners to be bitter rivals versus potential allies. This effort will also enable channel managers to identify where there might be a death of skills in their channel, especially when it comes to identifying and recruiting partners that have software development skills. Once complementary skill-sets are identified, channel leaders should layer on extra rewards for partners working together to land new customers.
3. Create Software Development Kits (SDKs)
Adding value in the current age of IT almost inevitably requires channel partners to customize the software. IT vendors, to varying degrees, have embraced application programming interfaces (APIs) to enable automation. But IT vendors in the channel need to extend those APIs. What’s needed is SDKs that make it simpler for solution providers to add value. Value added by additional layers of application and integration software. Most APIs are too low level for channel partners to effectively embrace. SDKs provide channel partners with tools that developers, either contracted or hired by the channel partner, can employ to create new use cases for a product. A product that now serves to expand the total addressable market for any given technology at an accelerated rate.
4. Build More Reference Architectures
Channel partners want to minimize any and all uncertainty when it comes to solution outcomes. Not only is it easier for solution providers to sell additional products and services to happy customers, but the overall engagement is a lot more profitable when the solution can be reliably implemented. Repeatable solutions based on proven reference architectures are especially indispensable when a solution aimed at a specific vertical industry involves technologies from multiple vendors. In addition to validating reference architectures, channel leaders should also richly reward partners for helping to develop reference architectures for new use cases that can be easily adopted by other channel partners.
5. Invest in Analytics
Advanced analytics in the form of Big Data and machine learning algorithms is transforming sales lead generation. Channel partners are going to gravitate to IT vendors that invest in these technologies. Why? Because they generate higher quality leads that close faster. It will soon become increasingly possible to even predict what organizations will most likely be looking for what types of products long before they ever issue a request for a quote. While that may sound like some far off instance of artificial intelligence (AI), the fact is advanced analytics and other forms of AI are already being widely applied to the channel. The return on those investments in the coming year will redefine sales enablement utterly.
Overall, change comes to the channel in waves of disruption that tend to build over time. It’s clear channel leaders have been incorporating new ideas alongside tried and true strategies for several years now. What will make the coming year fundamentally different is how many of these concepts savvy channel managers have been experimenting with over the last few years are about to become mainstream elements of any successful modern channel program.
We invite you to demo our channel enablement software to see what’s truly possible to Automate, Connect, Track, and Sell in your channel. Discover how easy it is to take advantage of a cloud application that comes with all the channel partner engagement KPI’s needed to successfully manage your channel in today’s rapidly changing environment.