by Chris Becwar
First off, I want to say how excited I am to join the CCI team as the new marketing director and host of the Channel Champion blog. I’m looking forward to connecting with all of you regularly in the future. So without further adieu, let’s jump in!
My first week on the job, I was lucky enough to attend the Channel Focus North America with Channel Focus Latin America 2013 conference in Miami. Another amazing Baptie event last week! If you’re a channel pro and haven’t attended this event, I can’t recommend it highly enough… in-depth sessions and workshops from the top channel experts and leaders in the world… our heads are still spinning with new insights and ideas. The yacht party wasn’t bad either! Here are some key themes and take-aways…
A central theme was channel transformation…we are at a tipping point right now with the rise of the cloud. Over the next few years, vendors will be under a lot of pressure to quickly evolve their ecosystems. Vendors know that this transition will be rocky and cost them some key relationships, which is the cause of a lot of underlying fear and uncertainty. How do they help get VARs through the lean first years of selling in the cloud while protecting their market share and revenue? Most vendors don’t have an iron-clad strategy for this and are “playing it by ear” to see what works best for them.
What does the “VAR of the future” look like? Most agree that they will be:
- More adept at being a service provider in the mold of the insurance biz and less likely to know much about servers, etc.
- Good at SSO and web services/API integration
- More vertical industry expertise
- Often “born in the cloud” with much less technical experience, so less focus on plumbing and more on biz outcomes
- More skilled at selling outside of the IT department to Biz Unit heads
There was much discussion about “interim channel transition planning” for the next 3-5 year period, where partner incentives are set up to encourage a mixture of up-front and subscription business. After that, it’s ‘sink or swim.’ Some key interim approaches:
- Partners setting up separate P&Ls for traditional and cloud businesses
- Hybrid compensation models where partner reps get comped up front for the full first year of new cloud subscription accounts
- New, creative approaches to incentives that target things beyond quarterly revenue: training milestones, using ‘new age’ marketing approaches, rewards for ongoing service quality/customer churn control
Recurring cloud vs. installed revenue models… there were many mentions of the need to educate partners on the ‘rule of 78s’. In a nutshell: what do you get in a year for selling one $1000 cloud deal per month… $12K? Nope, $78K. See http://www.phcconsulting.com/rule-of-78-chart.htm
Another key point was that channel solution agents and platform providers are offering more off-the-shelf, plug & play web API integration connectors with each other.
Rod Baptie presos are always a ‘must see’ and this year was no exception. He focused on the rapid rise of the telcos as a key channel:
- The telcos are increasingly offering cloud products and services
- Their channel understands recurring revenue
- Their channel sells billions of dollars today
- They want the cloud and IT resellers
- They have access to customers ─ millions of them
Steven Kellam of CCI shared the results of a very in-depth survey of both channel vendors and partners, looking at how each side views various channel challenges like training, engagement, incentives, and much more. There were many revealing insights into what we can all do better. Please email us if you’d like a copy!