Channel Marker

Dec 16 2014   11:50PM GMT

PartnerPath maps out key partner channel trends

Lynn Haber Lynn Haber Profile: Lynn Haber

Tags:
Channel
IDC
IT trends
Market trends

A recent one-hour PartnerPath webinar, titled “3 Vital Channel Trends Affecting You in 2015,” pinned down trends in three key areas: cloud, enablement and partner types. The webinar was aimed at a vendor channel audience.

Five years into cloud computing and there’s no let-up in momentum, agreed Darren Bibby, program vice president for channels and alliances at IDC, and Diane Krakora, CEO at PartnerPath.

While the day when talking about cloud simply as software isn’t here yet, the projections for public cloud (SaaS, PaaS and IaaS) and the greater cloud market (public, private and the enabling IT and services) are strong.

According to IDC, cloud adoption is up, and public cloud services and sales are expected to reach $70 billion in 2015 and $127 billion by 2018. Similarly, the greater cloud market will hit $118 billion in 2015 and reach $200 billion by 2018. These figures represent 5x the growth rate of IT spending overall.

These dollars represent across-the-board opportunities for partners. In fact, a 2014 Microsoft-sponsored IDC e-book, “Successful Cloud Partners 2.0,” noted that partners are making 26% of revenue from cloud-related products and services. Two years from now that figure is expected to reach 40 percent.

Krakora turned the discussion to the roles vendors expect channel partners to play in their cloud offerings, which can include reselling cloud services/applications, customer evangelism and relationship management, referring business, and post-sale professional services and pre-sales architectural or assessment services.

While resale may be in the near-term future for partners, Bibby suggested that resale will ultimately represent less of what partners do for a living as they add more managed services, professional services and maybe even build their own IT infrastructure to earn more margin.

On the flip side, vendors are changing their metrics from seats/licenses sold to seats installed and deployed.

So what does the partner of tomorrow look like? Bibby noted seven key ways that partners have to transform in the future. They’ll have to:

  • Shift from a second-platform orientation to a third-platform orientation (cloud, big data, mobile and social), which is where IDC sees the future growth in the industry.
  • Shift the sales motion from the deal to the relationship.
  • Shift the conversation from the IT department to the line-of-business users.
  • Shift marketing from traditional to digital.
  • Move partner activities up the stack from resale, services and managed services to building and creating their own intellectual property.
  • Understand that finance model will shift from short-term to long-term, something managed services providers have figured out.
  • Understand that competition will change to include some strange bedfellows, such as banks, travel agencies, HR, consultancies and digital agencies.

The discussion of key channel trends then turned to which partner types vendors value most: traditional resellers, systems integrators, born-in-the-cloud solution providers, large account resellers, or telco/service providers.

Krakora suggested that transformation of partner types is not going to happen overnight. She also noted that partners will play a variety of roles in the new cloud world, blurring the lines of a historically linear model (vendor > distributor > VAR > customer). Going forward, the familiar linear model will transition to a cluster model where many entities — distributor, systems integrator, agent, solution provider, vendor and service provider — could sell to the customer.

Next up was the topic of the where partner skills are most needed, whether through technical training and certification, developing vertical solutions, selling to the line-of-business decision maker and business transformation to a cloud model.

Selling to the line-of-business manager will be critical going forward, said Bibby, adding that smart vendors are realizing they must provide resources to partners. IDC predicts that by 2016, 80% of IT investments will be influenced by LOB decision makers and 40% of IT investments will be made by them.

Vendor enablement used to revolve around technology, skills and certifications. Going forward, it’s about partner self-sufficiency, business acumen training, marketing skills — digital in particular — and vertical industry expertise, Krakora said.

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