Jeff McCullough, Global VP, Channel Sales at Park Place Technologies, considers the value of a channel programme
Vendors have traditionally used the channel to facilitate scale at speed and usually as an expansion of their own internal sales force whilst extending reach into interconnected services and complementary solutions. Evidently then, the channel model continues to play a critical role in the tech sector, albeit with a dynamically changing landscape. Much has been documented about the decline of the traditional VAR channel in favour of the MSP pay-as-you-go online services provider with MSPs touted in many regions as the new dominant IT channel. Likewise, sitting at the top of the channel pyramid – and acting as the link between vendor and partners – is the evolving role of the channel Distributor. Is their role as a Value Added Distie (VAD) becoming eroded and replaced by a breed of Master MSP facilitators – often working alongside pure maintenance providers for hardware service extension? Covid-19 catalysed channel change further still as organizations transitioned to online software service provision to facilitate remote working via SaaS platforms.
Successful channel programmes are only as good as the channel relationships that underpin them, key values of which pivot around trust, mutual profit, and a desire for ongoing growth With this backdrop, traditional channel programmes, portals and initiatives have raced to keep pace to serve both the consultancy driven, specialist VARs while also equipping the cloud based Managed Service Providers with the tools to churn more white-gloved app based services. We examine if it is time to rip up the rule book on tired portals, lacklustre QBRs and ad-hoc rebate schemes to invigorate the dynamic channel of today to add real value to sales and customers?
To answer that question, we need to consider if the output of channel programmes currently in place differs greatly between traditional partners and MSPs, as we have already established that their DNA now differs. Dual partner personas provide a problem for vendors trying to offer best of breed generic channel programmes that satisfy both licence revenues and annual recurring revenues (ARR).
VARs & MSPs need different channel programmes:
Here is the conundrum. To survive and thrive, VARs need the tools and marketing to continue to demonstrate their independent value, provide trusted advice and offer hands-on expertise on physical hardware and software products to justify their existence. MSPs on the other hand, need to keep a sharp eye on their incredibly competitive monthly service recurring costs to clients, while extending their buckets of complex online IT services to grow revenues and survive in a margin-deflated model. Because now so many are offering SaaS, MSPs sometimes struggle to establish unique selling points and can fall into the trap of offering similar propositions with the only differentiator being price. So, to support these different channel models, what’s worth keeping the in traditional channel kitbag?
The topline requirement in any channel programme remains constant, that of full transparency between organizations. With transparency comes trusted partnerships, which in turn leads to increased deal recognition and enhanced mutual remuneration. Within the channel deliverables, sit the desired requirements of self service capability; structured rewards and rebates; a stepped training and accreditation scheme that rewards both the partner and the partner employee; incentives for reaching into different sectors of the vendors portfolio and, of course, lead registration to protect deals. On the marketing side, best practice channel programmes should continue to offer co-branded marketing capabilities and piggy-back marcoms services, sometimes with concierge services for automated rollouts. (Especially critical for MSPs, as they frequently lack dedicated marketing functions). The housing of these channel marketing tools needs to be greatly enhanced and modernized too. Partner Portals have come a long way from offering singular point services such as lodging Fund Requests for Marketing Development Funds, to transition towards the fully immersive and digitalized partner apps now available across any device, that synchronise directly into leading CRM tools within the vendor.
Discreet onsite outsourced service provision to deliver extension services, is set to continue:
Established savvy VARs, MSPs and even VADs can and do increasingly benefit from discrete partnering arrangements with leading Third Party Maintenance providers. Reliable TPMs offer a natural middle ground for expansion and transition of services whether VAR or MSP, meaning that the partner can confidently quote to outsource certain highly profitable professional services to increase incremental value, standing and footprint within their existing customers without carrying the full Professional Services overhead. For instance, the world’s leading TPM, Park Place Technologies daily equips VARs and MSPs with services that expertly increase their own service provision to include hardware maintenance, ITAD, Remote Hands, IT Discovery. Given that the onsite TPM engineer discretely represents the partner, they can now front and extend service offerings to customers. By offering additional services onsite to key customers, partners become even closer to helping the end user reach their core IT objectives outside of just selling hardware or delivering SaaS. A broader swathe of offerings allows partners to align closely with the services they provide end customers.
Notably too as we emerge out of the COVID-19 pandemic where Cloud environments have soared, it is highly likely that delayed refreshes in on-premise environments will come to the fore later in the year and into 2022, especially refreshes for critical enterprise applications running in local data centers. This could lead partners who have refocussed towards an MSP model in 2020 to be short of onsite installation support for refreshes and upgrades. Again, there is a natural extension working alongside a reputable TPM who can plug in for the duration of the project with specialist quality help, allowing the partner to provide the customer with complete solutions implemented by experts. Working with other providers and partners is today increasingly familiar, plugging into other specialists. For instance, leading MSPs are now becoming the de facto experts in integrating entire cloud services from various vendors and see themselves fast becoming the new breed of Master MSP facilitators.
One thing is for sure. The tech channel has proven itself to be as durable as it is dynamic. Channel programmes need to match similar levels of progression to maintain relevancy.