Calendar year 2020 was my first full year in the role as Vice President of Research for XaaS Channel Optimization. Whenever I spoke with prospective new members in the first half of the year, three key questions came up more often than any others.
Partner Channel Priorities: Early 2020 Key Questions
- How do vendors convince the channel to move off the perpetual model?
- How do vendors create economic value for partners with their XaaS offerings?
- How do we know if partners have the capability to be successful in LAER (Land, Adopt, Expand, Renew)? For more information on LAER and how to become LAER effective and efficient, check out this research paper by Thomas Lah, Executive Director and Executive Vice President of TSIA.
Now that 2020 is over and 2021 is underway, the questions and trends are shifting. As a result of COVID-19, TSIA has identified the trends that we are seeing in the marketplace which have accelerated (i.e., they were present pre-COVID, but now are on “steroids”). From a partner ecosystem lens, I like to highlight these:
The move to XaaS has far and away been the key trend that has accelerated all the others, and this has been validated via conversations with TSIA member companies in nearly every segment of the technology industry. The XaaS transformation has changed the priority and even the validity of the three common questions from early 2020 mentioned above.
This acceleration to XaaS has made the first of the questions virtually irrelevant. Companies that I speak with think that if partner companies do not want to move to the XaaS model, they will (and should) be left behind.
Based on conversations that I have had with TSIA member companies in late 2020 and early 2021, the three questions have evolved into the following.
Partner Channel Priorities: 2021 Questions
- How do we know if partners have the capability to be successful in LAER?
- Do I have the right partners?
- How do I deal with the partners who do not want to make the transformation?
- How can I accelerate/enable the partners who want to move more quickly so we can all be successful sooner?
- How do I locate/find the partners that I do not have in my ecosystem but I need to recruit?
- How do vendors create economic value for partners with their XaaS offerings?
- How do I get partners to be so excited about my platform that when they hear my brand, they think of all the revenue and profit they can make due to their partnership with me?
- What am I doing well from an execution perspective, in my XaaS partnering model vs. what am I missing?
- Where do we, as a company, have gaps and where could we implement best practices?
- What are we missing that could take us to the next level and leapfrog our competition?
- What should we do to be seen as one of the best vendors to partner with in the tech industry?
As I think about these questions, I realize that companies will be focused on different questions as they work through their XaaS maturity model. Using the TSIA Fish Model below, these questions map nicely to the maturity of a vendor company in their XaaS journey.
If the vendor company is early in their journey to XaaS, they are focused on the first two questions in the sequence.
If they are fully committed to XaaS as a company and have decided to turn their backs on the perpetual model and invest solely on the XaaS model, they are focused on the middle two questions.
And those companies that are fully “SaaS” or “XaaS” or Born in the Cloud are definitely focused on the last two questions. They are tuning their model. They are looking for ways to become more optimized, efficient, and effective with the partners they have and provide the business value as an ecosystem to their customers.
The companies that are “on the right side of the Fish” are focused on delivering customers a return on their technology investments, securing seamless renewals, and reducing churn because the customers are able, with the partners’ support and assistance, to articulate business outcomes and value realized through the technology solution.
As we turn the calendar page to a brighter 2021, I believe we will see customers are laser-focused on assuring that every dollar spent for technology is returned in value and achievement of planned results. This shift will cause a ripple effect through the partner communities as again, they are forced to accelerate their business models from pay-up-front to pay-as-you-go based on customers’ demands.
In the TSIA State of XaaS Partner Channel Optimization 2021 research paper, I will cover this topic in more depth as I have explored the avenues for motivating and driving partners via incentives for value realization and business outcomes.
Happy New Year, and the brightest and best wishes for a healthy and profitable 2021!