- On August 4, 2015
Cloud-based solutions for all aspects of business are here to stay and the reality is Cloud-based Solutions influence how its end users are evaluating, choosing and implementing their Corporate IT needs. Channel Partners are as important as ever. As stewards of the brands and solutions they recommend, they must be encouraged to stay current, adopt new technology early and be fully supported—to retain their reputation as collaborative Trusted Advisors.
Gorilla channel consultants are brought in by vendors to better understand the Evolution of the Cloud and Cloud Engagement Models that support a changing sales and relationship landscape for brands, vendors, Channel Partners and their customers: the end-users.
Is this new technology and the shift to the Cloud creating an opportunity for customers to bypass the Channel? Or does it create new opportunities for Channels to develop because of Cloud Services and Solutions.
Some vendors would say that Channel Partners can be bypassed and customers could work with vendors directly. Gorilla recommends this better approach: do not replace the Channel Model with a Direct Model but provide channel partners with the education/tools, product and/or service to adapt to this shift in how services and products are delivered.
“The continuing Channel will circumnavigate B2C as more consumers will buy direct or through the larger online e-tailers—helping themselves to what they need and not being concerned with support for their purchases of software, hardware and accessories.
Yet, in the B2B Channel it will be sink or swim for Channel Partners and the business will have to be centered around Professional Services, as the financial model also changes. The traditional VAR Model will fade out within 5-8 years time. Resellers can now layer business opportunities and create a cash-flow model that will provide for increased long term financial stability. Business for Resellers before had spikes and dips, whereas the Cloud Model is linear and services are being sold on annuity basis with most customers renewing year after year.
Cloud relationships will be better if people begin them with the idea of it being a long term relationship (and this is the path of least resistance). Loyalty is being built into purchase as expectations are set through the marketing and selling cycle—and this is a wise approach.”
In most cases, the Channel Partners and Network is still the most cost-effective and timely way for customers to receive the best advice, services and products. BUT…
The pace of change is speeding up and won’t be slowing down. Cloud-based solutions are abundant and evolving and channel partners need to embrace this change right now and fully.
“There is a five year window of opportunity to set up for the transition: for things haven’t changed yet, but stay mindful that gradual change is occurring and Channel Partners need to be proactive now.
What also must change to keep up with the pace? How your channel partners need to be engaging their customers who are now more than the Corporate IT. Business units more and more would have their say in setting budgets and are even making more than half of the decisions .
Channel Partners may need to re-establish their reputation as trusted advisors—if they are not already in alignment with the Vendors and Solutions Providers of IaaS, PaaS, and SaaS
Meanwhile, the customer’s adoption of Cloud Services as a new standard varies wildly and it is ever more important for Channel Partners to understand how decisions are being made and how the decision making process itself is changing as Corporate IT and Business Units are both involved; and both must be satisfied.
“Vendors have the power to drive their Channel Partners to make the shift, and this is the very business we are in , working with IT manufacturers, creating Sales and Marketing and Channel Engagement Strategies for Vendors that help their partners make that shift.
Vendors ultimately need to be the ones who want to drive the culture change in the partner base, to shift the thinking of their Channel Partners and how they work with the more complex needs of organizations in need of Professional Service. Buying hardware and software is one thing, implementing it is an entirely different animal. And, incorporating Cloud cannot be avoided.”
What now is available through Hosting and Cloud Services?
The Technology Industry now has additional options that shift the burden of infrastructure, platform and application management to off premises (changing their responsibilities and how they work depending on if their chosen solution is Dedicated Hosting or Cloud Infrastructures or Cloud Platform).
The responsibility of the Channel Development Community is to educate Channel Partners so they can understand the Cloud Services environment and then embrace it, champion it. And what of those partners that do not? They may not stay in business forever, which also translates as lost leverage and revenue for the vendor/manufacturers.
Dedicated Hosting is still in high demand and more and more is being migrated off-premise by businesses. Millions of businesses still rely on Dedicated Hosting Services. These are used by many customers and it is presently the sweet spot for most Channel Partners and there is a growth rate of 20% per year.
What is changing quickly is the self-service and on-demand Cloud Services and Platforms with IaaS, PaaS, SaaS delivered through the internet. Cloud is even being used more and more for mission critical applications and activities and not to just develop and test applications and run non-core activities. It is considered more reliable and secure and the tools to develop, deploy and monitor apps are more sophisticated while being also user-friendly
The growth “of the Cloud” has created a new Channel Partner “of the Cloud.” New Partners “of the Cloud” are competition for Traditional Channel Partners. These new partners are motivated by Cloud based software development and Professional Services opportunities–knowing there is a large global market that needs IaaS, PaaS, and SaaS
At present, Cloud computing accounts for only 2.3% of the Global Market. In 2008, the revenue value of Cloud Computing Services was $46 billion. Gartner projects that revenue for Cloud services will exceed $182 billion in 2016.
Our role as Channel Sales and Marketing professionals is to take the lead and help the Partners be able to embrace the changes, get and stay educated on an evolving technology OR see them become part of history.
Evolving an opportunity as the Cloud is, there remains a need for Channel Partners as Brand Ambassadors and Trusted Advisors
We see the growing adoption of the Cloud as a step change happening again. “For Channel Partners, who once made revenue off of software, hardware and some professional services, squeezing mild margins out the Cloud business is possible but setting up and launching Cloud companies is an expensive endeavor to take on. Channel Partners with vision would be wise to wrap their services around the offerings of SaaS, Iaas, and PaaS as much as they can, and stay current as a Professional Service provider to configure, implement and support systems being used by companies.
Staying loyal to a CRM you invest a lot in, such as Salesforce, makes sense and is better for your learning curve over time and it is therefore the Path of Least Resistance.
The future of the Channel is Business people selling to business people. With 60-70% of the IT spending being chosen by the marketing people and line-of-business (LOB) managers not the CTO of a company.
“At the end of the day, a Channel Partner’s success depends on their understanding and how to respond to the changing needs of customers if they are to maintain their trusted advisor status. Channel Partners must stay abreast of a rapidly evolving technology platform and continue to reinforce their value to multiple decision makers within their customer business. And that is where Channel Sales and Marketing professionals come in; extending the reach of the companies and securing both enthusiasm and engagement from their Partner Networks. It’s wise to make staying engaged easier too!”
“People will buy from people. People will believe in people. People will believe in ideas generated by people.
Ultimately and at the end of the day, Cloud, and business for that matter, cannot exist without human relationships.