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Hello from Revitas! We are Pleased to Join the Channel Focus Community!

Hello from Revitas! We are Pleased to Join the Channel Focus Community!

First, an introduction. Here at Revitas, we are all about revenue acceleration. We help organizations accelerate revenue through diverse, multi-level sales channels, by delivering enterprise-class solutions that tailor channel and contract management to the needs of the business. For over 25 years, we have enabled companies in the most challenging, channel-intensive industries to achieve best-in-class performance and sustainable competitive advantage.

Our first encounter with this community was the Channel Focus Conference held in Miami, FL, this past April. We were pleased to discover an engaging dialogue regarding current market conditions, trends and themes around channel management, with active participation from an insightful audience. We immediately sought to join the community and share our experiences, best practices, and observations in the area of Channel Incentives.

To start, we thought we’d simply share our thoughts on the themes we learned at the event. We found the following four key takeaways from the Channel Focus Conference:

·         The channel is in a state of almost unprecedented flux and change

·         The channel is financially healthy and expanding

·         Channel partners are transforming from traditional to cloud business models, and are looking for support to help in the transition

·         There is a high interest in partner recruitment and on-boarding – “partner experience” is an emerging trend

Channel Flux and Change: Drivers, Roles and Trends

As almost all attendees seemed to agree the channel is currently in a state of almost unprecedented flux and change. The roles in the channel are blurring and combining, and becoming more complex. There is an emergence of new roles in the channel. The control of the sale is shifting from the large technology vendors, to the partners in the channel, most notable Managed Service Providers (MSPs). Customers are focusing on service levels, pricing, delivery models, and the capability of the MSP providing those services as opposed to the selection of the technology itself. This theme was introduced and defined as SPaaC, or “Service Provider as a Channel”. The idea here is that the brand of the product is more in the hands of the SpaaC vendor, and that this channel is playing a key role in the cloud transition. We also heard that change is being driven more from the SMB focused channel up to the enterprise, rather than top down.

The Financial Health of the Channel

From the discussion of many speakers, a clear picture of a healthy and expanding model emerged. According to a presentation from Tech Data, the growth of the US channel exceeded growth of IT spending between the years 2011 and 2014. It appears that channel business has managed to outpace the growth of IT budgets in the US, which indicates that IT teams are purchasing a larger percentage of their technology from the channel. This sustained growth reflects a healthy channel, which is likely to grow based on end-customer preference for purchases, as well as the technology vendor’s strategic plans to increase their percentage of revenue derived from the channel. It was also emphasized that the SMB-facing channel was the healthiest part of the channel.

 

 

The Cost of Change: Financial and Program Investments Required for Cloud Transition

What kinds of financial and program investments might be required from technology vendors to assist traditional VARs in their transformation from reseller to cloud business models? VAR willingness to embrace cloud is not sufficient on its own; companies must also have the financial resources to make the investment required.  There is also high competition to attract new cloud partners – and therefore the need to work with the current VAR partners to help them transform. One presenter illustrated contrasting sales projection trajectories over the next 5 years for channel partners who postpone cloud, preserve traditional reselling, or make an investment in the cloud. Although it appears to remain lucrative to postpone or preserve in the first two years, the growth of cloud sales overtakes and exceeds in the long run for the partner investing in the change. But what type of investment is required? Many participants agreed that the investment is related to conducting the business, and the type of systems required, such a billing systems designed for high-volume monthly invoicing.  The infrastructure itself required to establish a cloud service is another form of investment. Additional considerations include the capability to recruit, train, and manage highly skilled technical employees to operate the cloud and deliver services, and to develop new application layers for added services on the cloud.

High Interest in Partner Recruiting and On-Boarding – “Partner Experience” is an Emerging Trend

Discussions about partner recruiting, on-boarding, engagement and training were of high interest at the conference. We found the sessions and workshops to be well attended. The driver behind this interest is the need for vendors to continue to grow their channel business and a portion of that growth is expected to come from new channel partners. The challenge of this effort is that each vendor is recruiting from the same overlapping pool of channel partners. A result is an emerging trend of the “Partner Experience” and the need to improve the partner experience in doing business together.

 

In summary, we found these four themes to be of particular interest and topical for discussion and consideration. At Revitas the importance of improving partner engagement as well as delivering targeted, high-impact incentive programs that drive more effective selling behaviors is a clear focus and differentiator for us. Understanding the trends and changes occurring in the channel landscape with regards to financial health, technology adoption, and emerging business models are of great interest and importance.  We’d like to keep the conversation going, so please feel free to share your thoughts from our key themes learned at the Channel Focus Event, and methods in which we can address these factors of change.

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