Strategic Alliance Magazine Q4 2017 - 32
BIG CHANNEL BETS
Transforming the channel
Traditionally, vendors segment their
partners by business models and support
into separate siloed partner programs, i.e.,
technology partners, which provide complementary
capability but don't resell; systems integrators, which
provide consulting and services that influence customer
buying behavior that may or may not resell; VARs that
resell and are in some stage of morphing into managed
service providers; cloud service providers, such as Amazon or Google, that are both customer and channel. The
traditional designations don't hold up anymore.
The modern partner program breaks down these silos
and recognizes that the channel partner may be creating
and delivering value in a very diverse business model
(see "Transforming the business Model," Page 30). The
evolving channel partner is breaking their dependence
on product margins, providing services, may be taking
a revenue share on the subscription service-and if they
are savvy, are creating some of their own IP, either in the
managed services delivery or a SaaS application. The silos
can't recognize and reward value across the entire value
proposition that a partner is providing to the customer.
Partner incentives are also shifting. Vendors once had
rich margins, and they could afford to provide rebates
and incremental discounts to channel partners. These
incentives were based on-and promoted-unit sales.
That model fundamentally does not work in a cloud
economic model. Instead, vendor trends have pivoted to reward value, investment, commitment, and
some volume. Incentive designs are more aligned to
rewarding and promoting behavior that drives future
growth. These will become more essential as partners
make the leap to cloud. Incentives should enable and
reward partners who acquire the necessary cloud
management skills and specializations in vertical and
business domains.
Speaking of nontraditional
partners
Quite a bit of speculation exists in the
vendor community about whether traditional ITC channel partners are going to make the
transition in enough numbers to support vendors' revenue aspirations. Beyond supporting the transition of
VARs to cloud solution providers, some vendors have
taken to nontraditional partners whose service and
sales models are less about technology and more about
the functional organizations they serve. For example,
Marketo, a lead-nurturing SaaS company, tried going to
market through the traditional ITC channel and discovered it just didn't work. Its primary buyer was a chief
marketing officer (CMO). Its most successful partners
OUR RESEARCH PANEL
Arrow
Ingram
Shoretel
Comcast
JDA
Silverpeak
Cisco
Lightriver
Software AG
Compucon
Logzilla
Splunk
Citrix
NetApp
Synnex
Emerson
NVIDIA
TechData
GE
Plantronics
Unidesk
Google
RedHat
Verizon
Guidewire
Saba
VMware
Hyperloop
SAS
Xerox
IBM
Schneider Electric
Zoho
32
STRATEGIC ALLIANCE MAGAZINE | Q4 * 2017
Table of Contents for the Digital Edition of Strategic Alliance Magazine Q4 2017
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