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Vendor Predictions 2017 Part 4: Channel evolution

Jan 06, 2017; By Scharon Harding, Channelnomics

Channel Nomics

How will the channel change in 2017?

Vendors' crystal balls have seen a lot over the past few weeks.

From cloud, to technology transformations, to security, vendors have shared their thoughts on what the channel should prepare for in 2017.

But what about the channel itself? How will 2017 change the way solution providers, vendors or distributors do business?

For one, data analytics will evolve how vendors work with partners, Steve LaPedis, VP of marketing at channel data management software vendor Zyme, says.

"Partner incentive payments, inventory management and channel marketing are likely to undergo the greatest transformation this year in response to more precise and timely partner data," he tells Channelnomics.

The executive notes this will impact how partners approach sales and marketing, with resellers, VARs and MSPs executing more "nimble" tactics.

"With the growing use of real-time data to evaluate performance and optimize channel sales and marketing strategies, channel partners will need the flexibility to manage more frequent adjustments to sales, inventory and incentive initiatives," LaPedis says. "As more accurate data about specific partner performance (down to the SKU level) becomes available, channel partners will find it necessary to show competitive value in comparison to other resellers in their market areas."

Brandon Stigers, director of inside channel sales at ESET, agrees 2017 will bring significant increase in the focus of shared intelligence between partners and vendors.

"Vendors have developed their programs independent of the partner, who is the front line in the sales process. Having better shared intelligence through, for example, CRM integration will allow both parties to create more meaningful, relevant and timely programs that will lead to a more focused conversation with the buyer and help to accelerate the sales cycle," he tells Channelnomics.

The exec notes vendors are a key asset for partners this year as they'll have greater resources to offer around marketing dollars and manpower.

"Take advantage of MDF, use the marketing materials provided, engage with the passive buyer via social media by piggybacking on the content developed by the vendor," Stigers says.

Brian Babineau, GM at Intronis MSP Solutions by Barracuda, agrees partners will turn to vendors for their marketing needs.

"MSPs will be looking to lean on their vendor partners to help them with sales and marketing activities, as well as [for] increasing knowledge of technical staff," he tells Channelnomics. "All of this education has to be delivered in modern formats such as Facebook, easy-to-navigate partner portals, video, and distance learning. "

And Neal Bradbury, senior director of business development at Intronis, expects MSPs to look outside their organization for this area.

"An increasing number of MSPs will outsource some or all of their sales and marketing functions to alleviate strain on internal resources, bring fresh ideas to the table, streamline operations and achieve greater success," he tells Channelnomics.

According to Chike Farrell, VP of marketing at SkyKick, sales and marketing has been an untouched area for many partners but will become essential in 2017.

"Building these skillsets that are foreign to most channel partners is imperative for those channel players (MSPs, VARs, resellers) who want to grab more than their fair share of the SMB market that's still available," he tells Channelnomics.

Farrell also points to consolidation among large players like distributors, as well as solution providers, in the New Year.

"Channel players (MSPs, VARs and SIs) are seeing the opportunity to continue to build scale in provision of IT cloud solutions to SMBs," he explains. "They will continue to seek continued M&As in pursuit of regional, national [and] international scale."

On the vendor side, David Messina SVP of marketing at Docker, says with 2017 being the Containers as a Service (CaaS) "tipping point", container vendors will unify with more core capabilities made available as open source and differentiation moving further down toward the end user.

"At the high end of the market, Fortune 100 enterprises with strong container adoption and deployment strategies will drive cooperation, rather than increased competition, from container leaders," he tells Channelnomics.

The year will also bring consolidation among RMM and PSA vendors, according to Bradbury, who says more vendors will start offering both RMM and PSA thanks to M&A activity.

"We will also see more vendors emerge in this space as RMM moves from the endpoints and into complete end-to-end network infrastructure monitoring and application performance monitoring," he says.

This year, partners will also need focus on developing talent. Nirav Sheth, VP of Global Partner Organization, Solutions, Architectures & Engineering at Cisco, notes cloud, XaaS, security, and software in 2017 will require high levels of expertise for assessing, deploying, integrating and mapping to strategic business goals.

He adds the technologies will require shifting toward long-term views of customers' entire IT strategy,

"This shift toward a complete customer lifecycle journey will result in new training, professional services and the value exchange that reach beyond the initial sale," Sheth tells Channelnomics. "This means not only evolving skills, but new services opportunities, the potential for recurring revenues and closer, more long-term customer relationships."

Sheth urges partners to expand practice capabilities enabling selling to non-IT buyers and investing in software development skills in 2017.

Brooke Cunningham, AVP of Global Partner Programs & Operations at Splunk, also thinks investing in certain skills will be important for partners in 2017, especially considering Internet of Things (IoT).

"Enable your existing teams to address these new technologies fueled by customer need will ensure differentiation. Bring on new talent where you have gaps. And delivering customer insights from these new IoT opportunities - and ramping up fast to do so - is going to be the key to partners' success in 2017," she tells Channelnomics.

"They will need to double down on education, enabling their teams with the right skillsets to address these new IoT and cloud use cases and understand the entire solution that the customer needs - from infrastructure, security, operational intelligence, analytics and more. The ‘soup-to-nuts' solution play, for partners, becomes even more critical than ever before."

Indeed, partners will be called on to evolve their business and cash flow models to support a hybrid approach for on-premises, SaaS and cloud solutions, Cunningham notes.

Kim King, VP of global partners and channels at Progress, meanwhile, expects emergence of services and key VARs with good relationships with companies in unexpected verticals, such as agriculture.

"These VARs are important to the channel because they have great specialties and are trusted advisors to a lot of vendors and end users," she tells Channelnomics. "I would have said they were a dying breed a few years ago, but I believe they'll re-emerge as long as they successfully provide solutions to end users."

King also expects "surprising" changes to the distribution and reseller model as disties that have moved to e-commerce models take over.

"These distributors have already figured out how to evolve, and they will continue to evolve over the next year," she says. "The distributors have been able to create more of an outbound sales model rather than inbound and they're really spearheading the digital journey."

Joe Schramm, VP of strategic alliances at privileged account management and vulnerability management solutions vendor BeyondTrust, sees ISVs moving toward value-added distribution for more scale and leverage.

The exec expects more traditional types of partners working closer with ISVs as well.

"[VARs] will also need to be more open and willing to working with value-added distributors as ISVs look to obtain more leverage and scale in the channel. MSPs will need to be prepared to field more inbound interest from ISVs who are looking for opportunities to bring their solutions to market in that model," he tells Channelnomics.

"VARs will certainly need to look at ISVs where there is good alignment from a domain expertise perspective. ISVs will not want to engage with VARs who are not able to show/articulate an understanding of the domain."

Partners should also prepare for continued verticalization brought along by cloud, social, IoT and more, says Neeracha Taychakhoonavudh, SVP of worldwide alliances and channels partner programs and marketing at Salesforce.

"The same disruption that brought upon the fintech and biotech waves will hit industries such as the public sector, manufacturing and more, and that means massive partner opportunities to implement, train and build amazing vertically-focused businesses," she tells Channelnomics.

And, perhaps unexpectedly, channel partners will continue shifting form hardware sales to ongoing services, as Matt Hurley, corporate VP of Juniper Networks' Global Channel and Field Marketing Organization, points out.

"Customers will continue to ask for specialized technology that meets their specific needs and, in some cases, partners will need to evolve their business models to satisfy these customer requirements," he tells Channelnomics. "In 2017, the channel will continue to move away from transactional interactions to become trusted advisors who understand their customers' businesses inside and out."

Overall, this may just change the sort of partnerships the channel forms.

"Because of the customer demand for highly-specialized technologies, the channel will turn away from depending on larger organizations in favor of multi-party alliances that supply fully-integrated solutions designed for specific use cases, particularly when it comes to verticals like healthcare and finance," Hurley says.