Partnering through the pandemic: TSIA has been adamant that new XaaS offers are forcing vendors and their partners to rethink and re-engineer their relationships. Now, in the midst of a global crisis, TSIA is being inundated with questions related to effectively working with partners through this crisis. Top questions include:
- How are companies leveraging remote assistance capabilities to support partner delivery activities?
- Have other companies established risk management protocols with their delivery partners?
- Are companies leveraging partners to accelerate the development of new capabilities required to support customers in this current environment?
These questions and many more will accelerate the need for companies and partners to re-engineer the ways they work together. It is evident that only through coming together and thinking differently will we be able to conquer these new challenges in our nations and in our world. It is imperative that a new XaaS Channel Partner playbook will be written—and perhaps much faster in today’s environment because the “as-a-Service trend” is here to stay.
XaaS Channel Optimization Requires Innovative Program Design
There is a realization in the marketplace that the partners’ input is critical to making excellent decisions around creating an engaging program. Especially, what they desire in a partner program and incentives to stay loyal to a platform.
The requirements for the “new world” partner program effort should include attractiveness to a new variety of partners. These should be focused on the customer lifecycle, encouraging and incenting revenue-driving activities surrounding the platform and flexibility in allowing for changes and enhancements to the program over time.
Companies that are born-in-the-cloud are generally further along than their traditional company counterparts. And, their program efforts can provide some valuable insights when approaching “new world” program design.
TSIA Sees the Trends in the Channel Ecosystem – And a New Approach is Needed
From a survey that TSIA concluded in January 2020, nearly 97% of participants agreed that working directly with partners to discuss program and plan options before solidifying them is the better choice for this as-a-Service partner channel construct over making decisions about programs, plans, and incentives based upon history and traditional constructs.
Figure 1:
Partners are facing a sizable set of challenges when revisiting their people, processes, and technology in their migration efforts to as-a-Service customer value delivery. Those who are in transition and are adjusting cash flow and profit expectations to their investor communities are already thinking ahead about how to build customer success functions and find new means of providing revenue surrounding vendors’ XaaS offerings.
But, as technology vendors, this is not something you can leave to your partners to figure out for themselves. Losing support of partner channel companies during the transition to XaaS can produce negative effects to bottom line revenue and profit.
According to the TSIA survey for XaaS Channel Optimization in January, over half of the companies that responded believe that maintaining excellent partner relationships is more important to long-term revenue attainment than tracking key metrics as your method to manage and rank partnerships in this time of transition.
Figure 2:
Lessons Learned from Born-in-the-Cloud Companies
Companies that are making the transition from traditional models to XaaS can benefit from the lessons learned by their cloud-native counterparts. Without this insight, in fact, they may well make wrong decisions based on how their old models worked.
Here is a great example: In our January 2020 XaaS Channel Optimization survey the question was asked, “In this era of digital transformation, with so many offerings moving to ‘as-a- Service’ models, is it better when deciding on partner initiatives for these offerings to use a data-driven approach or to pilot/experiment and fail fast?”
Figure 3:
Nearly 60% of the companies surveyed said that in this “as-a-Service” realm it is better to pilot / experiment and fail fast than to take a more data-driven approach. However, trial and error may not yield ultimate success. By utilizing best practices around account intelligence, analytics, and data, technology vendors can provide partners with the critical information needed to make mutual customers successful with the vendor’s technology, and the vendor owns this data as the operator of the platform.
Digging deeper into the results of the survey, it was interesting to see that pure-play “born in the cloud” software companies were more prone to develop and execute their partner enablement and tools quickly to support partners than were the more “traditional” companies, including hardware vendors and on-prem software vendors. This speaks likely to the existing infrastructure and legacy that makes creating and launching enablement and tools initiatives more complicated for some companies than for others with less legacy.
What Do Your Partners Want? Ask Them.
TSIA data reinforces the notion that what partners want from vendors is different in XaaS. In the fall of 2019, TSIA ran a survey directed to technology vendors and concurrently a separate survey to partners.
In those concurrent surveys, the data showed that 100% of the partners said that they need the technology vendors to provide them with telemetry data to help enable their success in driving adoption, upsell, and cross-sell motions. The technology vendors, however, either believe that they are already providing enough data, or they are just not prioritizing these initiatives at this point in time. This is a major disconnect…and a fantastic opportunity for vendors who can get it right.
In addition to the point on telemetry data systems, the partners are adamant that training and resources in the new capabilities required for XaaS lifecycle delivery should be part of vendors’ investment in the new world ecosystem.
In other words, the partners are expecting the vendors to invest in their success. Without this insight, traditional vendors may invest in practices that partners find less helpful and thus may lose their partners to competitors with more compelling programs.
Conclusions and Next Steps
- The XaaS Channel Partner playbook is still in edit mode. However, it is clear that different practices are needed in the new XaaS world than what technology vendors have delivered historically.
- Watching the plays of the “born in the cloud” software companies will likely help technology vendors tease out emerging and best practices as they iterate on programs, plans, and compensation models to drive revenue results.
- Looking to differentiate the vendor partner engagement models to deliver the data that the partners need to be successful in this XaaS world will likely prove more powerful and magnetic than product feature/function “one-up’s-manship.
- Listen to your partners, engage in a 2-way dialog, and be flexible in adjusting programs to meet their needs.
TSIA will be working on building out the components for this playbook and would like your participation. Here are ways you can engage:
TSIA XaaS Channel Optimization research and advisory can help you curate your own playbook by showing you the trends in the industry and following the data-validated best practices that lead to success.
Footnotes:
Lah, Thomas. June 2018. “Update: Swallowing the Fish,” TSIA. https://www.tsia.com/resources/update-swallowing-the-fish