The Times They Are Changing – New Partners New Challenges New Opportunities

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So, sang Bob Dylan in 1964 and it couldn’t be more true of our industry today. We are facing more and more rapid, Channel change than at any point since the initial evolution of the technology Channels in the early 80’s. And like all times of change there will be winners, losers and new models emerging. Those that grasp the change and address it will be the winners, those wedded to old models will fall by the wayside.

So how can you best describe this change? Well doesn’t everyone have a quadrant these days? Here is mine!!

Start by thinking about your technology and the support needed by both you and your end customers. How much business expertise is required to sell your product? How much technical expertise is required? By plotting your products in the quadrants above that will tell you the types of partners you need to take your products to market.

Let’s look at each quadrant in turn.

Lower left – Everyone plays

This encompasses products like Office 365 or Google apps, these offer very low margins and require very limited technical skills to get a client up and running.  Very few partners will be able to make money here and margins will be wafer thin. Some companies like Appriver will be successful by turning this into a volume play and bolting on cyber security and other services. But for most channel partners they will find it virtually impossible to make money in this area.

Lower right – Specialized Channels

This is one of the most interesting areas. If you have a SaaS based application that is industry or business focused this is where you sit. And it’s an area which is seeing the rise and rise of new partners. If you have a financial application who will your customers go to for help and advice? – your traditional technical partners or their CPA firm? If you have a marketing application who better to sell it than a Marketing or Advertising agency? Literally thousands of CPA firms, Marketing agencies, HR consultants, medical reps, manufacturers reps and other are actively selling technology today. Why? They have the ear of the ‘C’ suite, they are the trusted advisor and they truly understand the business issues that are driving the adoption of the technology. If you have a SaaS business application of any kind you need to be embracing these new channels.

Upper left – Technical Partners

The upper left quadrant is dominated by the 800-pound gorillas – Amazon and Azure! Very few partners will be able to afford to build the capabilities to compete. Some will succeed by carving out a specialist niche offering. Here you’ll find the hosting companies, the large data centres, the companies truly focused on big data.  This will require substantial technical capabilities and large on-going investment. For 95% of traditional partners this will prove to be beyond their capability.

Upper right – New Breed Partners

In the upper right quadrant new partnerships are emerging. Accenture are buying Marketing agencies. Publicis a $6 billion Marketing and advertising group are acquiring technical agencies. Both recognise that the CMO does own a substantial part of the IT budget – and its very profitable!! So both understand they need a combination of business and technical expertise and it will take too long to build it – so they are buying the expertise they need. Who even 3 years ago would have seen Publicis and Accenture as competitors?

But it’s not just the big companies… I spoke with a smaller Cloud Reseller at our Cloud Partners event in New York. ‘We recently lost an important account to a CPA firm. They knew all about the client’s business needs and put in a Cloud based ERP and business analytics system. I figured we had 2 choices; try and compete with their business knowledge, or try and partner with them. I approached them, we’ve just closed our second deal together! They bring the business expertise, we have deeper technical skills, – who knows where this might go.’

So it’s time for all of us to think about the Channels our customers are looking at to help them implement new technologies, we need to be where they are and sadly that may mean leaving a number of our existing partners behind and engaging with new partners with new demands – but that’s for another blog..

After all, as Bob Dylan sang:

For he that gets hurt
Will be he who has stalled
There’s a battle outside
And it is ragin’.
It’ll soon shake your windows
And rattle your walls
For the times they are a-changin’.

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