- On June 29, 2021
Channel marketers have a lot of changes in store and we’re seeing so many emerging and converging trends that are changing how we look at the market every day and how we play a role in terms of making all this work, in essence redefining our channel ecosystem likely forever.
The Way It’s Going
Before we jump in its always good to look at the size and scale of the market in the last year, we know tech, it’s our industry so we can confidently say there is a 3.5 trillion-dollar technology market for example, of which almost two-thirds of it went through the channel directly, almost 90% of it was Channel assisted and if you look in broader Industries almost 75% of World Trade goes through indirect channels of some type or another, the main reason for a lot of this scale resides in the technology market.
Every company, in every industry, is becoming a technology company; the level of disruption that is happening we’re reading about in mainstream magazines and watching on TV, they’re all coming into the technology conversation and all of the players are starting to see technology as a way forward. Where we used to see the technology ecosystem as more of a reseller or transaction-based channel we’re starting to now see ecosystems of all kinds of companies coming in. Having brought our way of working round to non-traditional conversations we can now say we used to measure the market in hundreds of thousands of Channel marketers, today, we measure it in millions, with millions more coming in all the time.
Now we know that as every company, in every industry, is looking at their own transformation, their own challenges, looking forward, making their own changes to better align to their customers and to their partners, as well as the employees inside, we can see it is a tech story through and through; we also know that almost two-thirds of the new Cloud opportunity is bought in from outside of it, so these line of business buyers are really important element. We’re seeing companies today, a big number of companies, where the head of marketing spends more on technology than the head of IT, and that marketing buyer has 8000 different tech companies that are in that stack and there’s whole sets of new channels, hundreds of thousands of marketing agencies, digital agencies, coming in to help them. So in terms of buyers we are looking at new disparate branches within each organisation, watching the channel in the channel tech stacks, there are all kinds of buyers in all kinds of opportunities that sit in non-traditional places, and business buyers now spend 51% of their time outside the firewall.
The Channel Ecosystem Assessment Issue
So, let’s look at an example. When evaluating our ecosystems we don’t talk about health care anymore, we talk about midsize clinics with fifty doctors, different to the dentist office, different from a small Hospital; opportunities galore in terms of double-clicking from an industry perspective not to mention geographic factors. You can’t sell to a midsize clinic in New York the way you sell to a midsize clinic in Madrid or Tokyo, it changes region-by-region with legislation, compliance, governments, and regulation all playing a role in the nuance. We need to know our customer focus number as we have different sector sizes defining segments of our market.
But that’s not all, the skills they have, the resources they have, their ability to be successful is changed by the size of those companies as well as the sector that they’re in, and we used to look at this market as channel marketers in the tech space as Hardware, software and services; well today we track 26 categories. And we can’t have a security conversation for example, without talking about the seven layers below that, then the 17 layers below that there are thirty-five million opportunities, tens of thousands of enders, thousands of Distributors, I already talked about the millions of partners. There’s a lot of stuff going on, there’s over 175,000 software companies today and growing, there are 800,000 emerging tech companies, the scale is chaos, and that causes issues in terms of the market to the buyer, that’s what we get to look at and what we need to solve for.
The Character of 2021
We’re nearly a year and a half into a pandemic which has changed and accelerated a lot of the technology world, if you look at all of the hundreds of things companies are looking to do whether they’re in Hospitality or Retail or Restaurants or fast-growing industries we know that the opportunities are around automation at a major scale for seeing huge growth in robotic process Automation (RPA) and business process automation. All of these environments are creating all kinds of opportunities for the channel meaning the cloud acceleration is off the charts! Recently we saw Microsoft announced 50% growth of Asher year-over-year that’s after reporting 48th and 47th ¾ of the way through Covid.
Just the other day the head of AWS got a really nice promotion, the big Stacks companies; Salesforce, Servicenow, Workday, Marketo, they’re all in the 30s. The fact of the matter is its recovery again, whereas some in computer hardware are down by double digits, others in cloud and automation categories are up 50, 60, 70% and that creates two sides of the coin for the channel as a whole.
The pandemic is really created a new remote ideology and we know now everyday we’re seeing announcements of companies shutting down headquarters and other locations, rethinking the real estate idea, realising that 20 to 30% of employees in the future are going to work in a very different way we got laptops and a zoom account, now we’re starting to ask the compliance and governance questions, asking the security and risk question, the continuity questions.
This is all an opportunity for the channel and we can see that in this case many companies, actually the majority of companies, moved out of survival mode pretty quickly and they started to get into thrive mode. Through the pandemic they’re investing heavily in customer experience, in partner experience, in employee experience, and then doing that for digital models; e-commerce and marketplaces etc. So all of the channels that have been wrapped up into these areas are seeing large double, and in some cases triple-digit growth having taken advantage of this huge opportunity.
As Channel marketers how should we be thinking about these trends, all of us wake up every morning thinking about the buyer, we know that we’re going through this demographic shift where in four to five years the majority of buyers will be Millennials, we know the Gen Z are now getting their first jobs, we’re going into that change, but at the same time we’re going into this digitization of sub-selling and marketing where the majority of buyers know their ideal digital-mix or digital-only journeys. There’s a lot of fear in the market right now that deals may be lost without ever knowing there was a deal to be had, and that as these digital journeys take off, buyers have more and more chances to become anonymous without ever talking to a sales person and without ever filling in a marketing form with the correct information. This puts a greater reliance on partnerships, because we know that as they go through these digital journeys they encircle themselves with trusted advisers and influencers, and those companies are critical in terms of us getting visibility in the future.
So, many of our companies are going to start to look at us to channel marketers to go get that early information and make sure the companies doing the right thing, whatever big company you’re talking about they’re starting to think through products and enabling their own sales and marketing departments and we need to know how do we work as channel marketers to drive that.
Finding software in the future for example is going to look like buying a car today through that digital journey in terms of consumption of B2B related products the 13 trillion dollars that goes to B2B transactions and how much of that can be on a consumption basis direct with the manufacturer in the marketplaces. The other option being as mentioned before the partner approach, gathering around a small set of super connectors or super influencers in terms of what gets them from not knowing a lot to vendor selection in a majority the cases now if you can avoid sales if you can avoid traditional marketing and get the vendor selection and feel comfortable about it that’s the future what we’re facing so as Channel marketers we have to kind of dragged down this chaos theory and look at those 35 million customers in the middle and start to figure out or predict who are going to earn those five spots that customers going to bring in on average to help them through that digital journey.
The fact of the matter though it’s about the few and if you’re going after midsize clinics in New York you can actually start drawing what that looks like; three people at the Chamber of Commerce, somebody in your accountant in Scranton and an agency in Ithaca, maybe there’s a managed service provider in Schenectady, you could start to draw it out exactly so now we don’t have to talk about millions of partners and we don’t have to go recruit in the entire ecosystem knowing the goal and the market we can actually go recruit the 50 key partners to get 80% share in that very particular market .
Wanting to develop as a channel marketer you can then playbook that so you can do it over and over every time you have new areas to focus, essentially building a channel ecosystem around it and we can enable and engage and do all the things necessary in our program to get that package around that customer and to earn a seat so that when they reach vendor selection they discussed us enough that we’re going to win the deal.
The channel ecosystem now holds business models that are different than the way you would have thought about them in the past, with many tech companies in the ecosystem converting to subscription and consumption models, embedded and white labeled models, as well as alliance type models. This means transactions themselves are only the first 30 days with the new customer. Now we have to drive adoption of our product to get the monthly/annual renewal, we have to drive deeper integration and stickiness to keep that retention, and we have to push upsell and cross-sell to enrich the contract every 30 days, forever! The customer Journey now never ends, and so where you spent all of your time, effort and money in the middle 5 years ago building out the people, the processes, the programs in the technology to drive your channel, now you have to take a step back and spread it much more evenly, where a third of the money should probably be going early to keep them after the 30 days and third of that money should be going later in the journey to drive better lifetime value of the customer for your company. So, our job as channel marketers have changed and how we, marketing-wise, enable these companies and how sales enable them, and how we technically complete is completely different, based on where they show up in the journey.
This idea of the business model evolution is really a huge alteration factor, with 76% of CEOs, according to Accenture, in every industry, every geography, of every size, suggest their current business model will be unrecognizable in another 5 years. Channel ecosystems are the number one reason why this isn’t just a technology conversation, though as we said before everything is somewhat becoming technology, it is hitting every industry. We can think about the forklift that could have an Internet of Things (IIoT) device added, it could now send over a thousand data points per second to the cloud, GPS, weight, temperature, the humidity or tire inflation levels, it gets sold on to a construction company goes into the building industry. You’ve now got this forklift which if you go to their website starts to look more like a tech/cloud company, take a look at the charts for the data and you wouldn’t be surprised if you saw it on AWS, Microsoft, Google or Salesforce or Oracle, you would be surprised if they had hundreds of dealers and they do the marketing with two, through those dealers like they always have used! But they’re one of those 76% of CEOs who think their future is ecosystems and the channel ecosystem for them is 10 times larger than those dealerships, they’re out recruiting 3,000 partners, to make this a reality and if you click one more time on their website it’s the digital ecosystem for everything, it’s not about the gauge of steel it’s not about the tires on the forklift it’s about all the downstream opportunities that the ecosystem creates and if they could become the ubiquitous platform, they win in the marketplace over their competition.
Revolutionize Your Channel Ecosystem With Gorilla
We hope you’ve enjoyed reading our perspective on the tech channel ecosystem. If you’re interested in learning more about how to grow your ecosystem, contact us to learn more about the ways we can help you develop your channel.