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COVID-19 Resource Center
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Partners are facing significant challenges in the aftermath of the COVID-19 pandemic crisis. Many are tired of talking about it, tired of hearing about it, and are ready to move forward to whatever the “new normal” brings.
As TSIA has polled members and non-members alike around the ongoing challenges in this crisis response timeframe, several of the accelerating trends from the pandemic will have long-term ramifications to partner communities if not addressed expediently.
Here are a few critical challenges to be addressed in the near term (see Figure 1):
The future of partnerships is in the “influence channel.” As stated in TSIA’s 2020 State of the Industry of XaaS Channel Optimization research report, this trend has accelerated through the past six months. What TSIA sees as the traditional segmentation of partners has evolved from what we viewed in the past as being primarily a “reseller” heavy model (as seen in Figure 2) to a more nuanced trio of models.
Partners must not stay in their “boxes.” Their boxes are the boxes of “Distributor,” “Reseller,” and “Systems Integrator.” No, partners must diversify to survive.
Additionally, vendors must not keep thinking of partners in these old-school boxes either. If they do, the vendors will miss opportunities to leverage the whole of their partners’ potential.
Make no mistake about it, for the most part, partners are “shape-shifting.” They clearly recognize now that they have to evolve and change to survive in the new normal of business post-crisis. Partners are adding capabilities, acquiring solutions and intellectual property, and reorganizing for future success. Vendors need to revisit their partner segmentation for XaaS (recall trend #1 in Figure 1) and reimagine their business partner community.
The new trio of partnering approaches are depicted in Figure 3 and they are:
These partners sell the technology offerings through their books and also may take physical ownership of the offerings in the supply chain to the customer.
This is what has typically been the traditional relationship between technology providers and distributors. Other partner types, such as agents and master agents, are acting as sell-through partners when at times, depending on the offering, they may not take physical ownership of the offerings they resell.
These are partners that buy a technology offer “as is” to embed in a larger solution. Two common examples are:
A managed service provider or a cloud service provider purchases a technology offer to embed in their larger offer for a particular customer or all of their customers.
Partners that may be paid a referral fee or marketing fee for helping the technology provider secure qualified opportunities. Often these partners are providing services that complement the technology offer but they do not want to resell the technology offer. Some sell-with partners may not want to accept payment but instead will opt for other “soft benefits” in exchange for their qualified leads, such as joint marketing or some other exchange of value that will not come into their books as “income.” There may or may not be a contract involved in this value exchange proposition.
The former segmentation will not cleanly fit into these new partner models. Partner companies will be crossing all kinds of chasms in the new normal future in order to stay in business, and it is imperative that vendors do not force them into previously defined “buckets” and therefore partner programs that do not address the “whole person.”
Vendors that successfully navigate the crisis waters by sailing into business advantage with their partner ecosystems will provide options that solicit and engage partners freely into the business and economic models that they desire. These ecosystems of vendors and partners that can be open-minded and creative about how to work together in the future will be wildly successful delivering digital sales, solutions, and services to customers.
At our upcoming TSIA Interact virtual conference, TSIA members and attendees will be covering this topic and more in detail, sharing additional data, real-world best practices, and pitfalls to avoid. Be sure to register today to take advantage of the valuable insights you can look forward to in our XaaS Channel Optimization track.
Post Date: September 29, 2020
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Anne M. McClelland is the vice president of XaaS channel optimization research for TSIA. In this role, she works with closely with member companies to deliver research and advisory programs that help them optimize their channels to drive incremental revenue at scale for XaaS offerings. Throughout her career as a global partner and channels executive, Anne has built new partner organizations from the ground up, driven revenue from new partner communities, and launched programs and tools to support these partner efforts.
The Technology & Services Industry Association (TSIA) is dedicated to helping technology and services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at (858) 674-5491 or we can call you.