The IT channel has undergone a huge transformation in the last decade. The emergence of the “as-a-service” model has had a profound impact on the industry as a whole, particularly for channel partners. Many have found that the journey from being resellers of hardware and packaged software to being specialist providers of cloud solutions and associated services is one that is not without its challenges.
The move has been felt in every corner of the channel, from partners, distributors, vendors and beyond. This theme of channel transformation is set to continue as digital transformation becomes more pervasive, and customers start looking for new capabilities from their IT solution providers.
In October, IDC held its inaugural European Channels and Alliances Executive Leadership Dinner, at the St Pancras Renaissance Hotel, London. IDC invited dozens of senior European and EMEA Channels and Alliances executives from a variety of different types of companies (Service Providers, Systems Integrators, Infrastructure Vendors, Software Vendors and Cloud-Native vendors) to discuss the theme of channel transformation and to address some of the pressing issues facing them in their roles today.
A wide and varied selection of issues were raised by the executives– from measuring partner-driven digital marketing efforts; balancing sales of traditional hardware versus emerging solutions; and how to better understand customers’ digital needs. Among the discussions and comments, key themes emerged as to what the primary issues facing the channel are right now.
1. How to find the right partners to work with amid industry transformation
When the cloud and 3rd Platform technologies first began to emerge about a decade ago, there was serious concern among the partner community that their businesses would not have a significant role to play when it comes to cloud – if they had one at all, that is. The move to the as-a-service model was threatening for partners and distributors alike. However, as the industry has evolved, IDC has seen that partners are playing – and will continue to play – a leading role. In fact, we predict that by 2020, 70% of cloud service providers’ revenue will be mediated by the channel or cloud brokers.
Although vendors, for the most part, appreciate and value the channel’s role in their go-to-market, many find it difficult to select the right ones on which they can place their bets. Traditional partners may be large, established, and generators of high revenue now – but are they willing (or able), to make the move to the as-a-service world? New and emerging partners tick the boxes in terms of business models and transformational outlook, but do they have the breadth and experience to reach the right kind of customers to sustain a vendor’s indirect business? This is one major challenge vendors face against the backdrop of this major shift, and one which was is top of mind for vendor channel executives.
2. How to evolve partner account management in the context of digital transformation
While identifying and nurturing the right kind of partner is an essential component of future partner strategy in the digital economy, it is important for partner executives to rethink their own partner management functions. Just like channel partners are the face of the brand to customers, partner account managers are the face of the brand to the channel – so it is essential PAMs or channel managers are fit for purpose and aligned to the vendor’s key strategy and goals.
PAMs of the future will need to not only focus on customer retention, partner loyalty and customer lifetime value, but will increasingly need to play the role of identifying new partners and connecting different players in digital eco-systems. Discovering how to evolve and compensate current partner account management towards this new model will be a significant challenge for vendors.
At the dinner IDC presented it’s partner of past, present and future framework which highlights the key business transformations that IT solution providers need to make in order to remain relevant, profitable and growing in the digital economy. This framework covers the core transformations partners need to make in terms of sales, marketing, portfolio and go-to-market strategy and forms the basis for IDC’s partner transformation research and thought leadership on partner identification, prioritization and enablement for digital transformation.
3. How to navigate the complexities of GDPR
GDPR has serious implications for the entire IT industry and beyond, and the IT channel will not escape from feeling its impact – far from it. During IDC’s Channels and Alliances dinner, GDPR was hotly debated. Understanding the complexities of GDPR from a customer perspective, and helping them to become and remain compliant is just one challenge vendors face. However, the nature of the channel means vendors need to consider even more – relating to the compliance of their partners, as well as their own businesses. Channel marketing – lead generation, lead sharing, co-marketing – is one area of vendors’ go-to-market which will face serious implications when the regulations come into force in May 2018, and as such, will remain a topic high on IDC’s Channels and Alliances research agenda. Initial research into the topic has began and is available here: There is no silver bullet when it comes to GDPR in the channel and The Impact of GDPR for Channel-Centric Vendors
These issues are just some of the many which were highlighted by channel executives during IDC’s Channels and Alliances Executive Dinner. The channel is experiencing massive change, and the companies operating within it are advised to move quickly and effectively to navigate them. The fast pace of change and evolving customer needs means that choosing to ignore the transitions impacting the channel is not an option to ensure long-term success.
The role Partner Account Management will play in the future, and how it must evolve, is just one area included in IDC’s European Channels and Alliances research program. The subscription service provides reports and research into the key trends impacting the European partnering ecosystem. Unlimited analyst inquiry and access to exclusive channel & partnering events and webinars are also part of the service.
Further information
Podcast: Three Mega Themes in European Channel
Podcast: Joining forces: Why Cloud Alliances Are on the Rise