As the industry transitions to the 3rd platform, we see vendors making big bets in terms of strategic direction. Be this splitting, refocusing, selling off or acquiring, these big bets have a very direct impact on the channel.Add to this the complexity facing the channel with the emergence of the 3rd platform technologies, our channels & alliances analysts have spent much of the last 2 years trying to understand the implications for vendors and their partners. In these two years, there have been a couple of mega-themes that have dominated the conversations we’ve had.
The first is around the business model implications the 3rd platform – particularly cloud – have on channel business models. As we move from the physical, on-premises world to the as-a-service world of cloud, the revenue opportunity from resale of physical products and licenses declines. Additionally, it also implies a move from transactional, one-time revenue model to a subscription-based, recurring revenue model. This can have significant implications for partner profitability and cash flow. Additionally, customer expectations have changed, requiring partners to rethink their sales, marketing, service delivery and go-to-market. IDC has designed a business model focused framework: “The Partner of the Future” which outlines 10 major transformations partners need to make in order to remain profitable and growing in the 3rd platform. Much of the research we publish and advice we give to partners is centered around the transformations implied in this framework.
The second major theme has been around the changing partner landscape. In IDC’s recent worldwide IT channels & alliances predictions, we predicted that by 2021, at least 30% of the channel will not exist in the format we know them today. We are already seeing new types of partners enter into the eco-system, companies like digital agencies, cloud service brokers, 3rd platform start-ups, digital system integrators, industry cloud players and strategy consulting firms, are all starting to offer IT-centric solutions and services and are emerging as non-traditional partners for technology vendors. We’re also seeing new routes to market emerge in the form of cloud marketplaces and cloud communities. We’re seeing the borders between different partner types start to blur. A good example of this is in the managed services space, with partners like Telcos, CSPs, VARs, Systems Integrators, outsourcers, hosters and IT solution partners, all investing in building and selling managed services to complement their cloud and product portfolios. It has become difficult to rigidly segment and classify partners which has direct implications for how vendors structure their partner programs.
The third major theme has been around the implications of these changes for partner programs. One of the questions we often get asked, is “who has the best partner program?” While many partner programs do stand-out, it is impossible to state that one program is “best.” Instead, what we do is identify elements of different vendor’s partner programs which are very innovative, well-received or seen as valuable to partners. IDC has developed a best-in-class framework which looks at all the elements of a partner program and identifies best-in-class for each of these. This framework can help vendors assess their program against best-in-class practices.
It certainly is a fascinating and interesting time in the industry, whilst transformation is hard, it is also the time for vendors to really think about which of their partners they need to prioritize, what kind of support and enablement they will require and how to best engage with those partners who are making the necessary changes and investments to remain profitable and growing in the 3rd platform.
In a recent IDC TeckTalk podcast with IDC’s Program Director for Western European Channels & Alliances, Margaret Adam, we talk about some of these topics (and more), to listen to this podcast click here:
For more information about IDC’s Channels & Alliances research an overview of the program is provided here: http://www.idc.com/getdoc.jsp?containerId=IDC_P576