Channel executives are being encouraged to broaden their definition of desirable partners. At ImpartnerCON18, Impartner’s annual customer conference held in Salt Lake City, UT in February, speakers pointed to the decreasing ranks of traditional partners, the emergence of thousands of new agents, and what may well have the biggest impact on the way vendors go to market — the increasing purchasing power of decision makers in business units — as reasons to widen the ranks of their channels.
In his presentation, Jay McBain, Forrester’s Principal Analyst – Global Channels, pointed out that the broader channel community is beginning to age out. McBain cited that there has been a 36% decline in IT channel firms since 2008. And in the next six years, 40% of channel owners plan to retire.
It’s likely that many traditional partner organizations will lose ground before they decide to call it quits. Unless partners adapt to how they go to market to focus more attention on decision makers in business units rather than IT, they will find it increasing difficult to compete.
“Traditional channels are struggling to stay relevant as business leaders take the lead in purchase decisions” said McBain. A decade ago, 10% of technology decisions were made in the business unit. Today, 65% of every technology decision is made outside of IT. McBain predicted that as many as four out of every five technology decisions will be made by business units in the next few years.
Non-technology companies already working closely with business units are recognizing the opportunity to add technology solutions to their menu of services. For example, industry-based professional service firms, which McBain includes among his list of “shadow channels,” already have strong relationships with their customers and a deep understanding of their business needs.
Rod Baptie, president of Baptie & Company, agreed. In his presentation, he continued to drive home the emergence of professional firms as strong partners for technology vendors explaining that they “can talk the business…already work with the C-suite…are trusted advisors,” he said.
And because many of their business models are threatened by new technologies, business service companies are eager to expand their revenues by partnering with technology companies, Baptie explained.
To successfully recruit industry-based professional service firms, Baptie emphasized that technology vendors needs to demonstrate how their technology can enhance the prospective partner’s value to its customers and how it can enable them to bolt on additional services.
And while professional service firms tend to have a better understanding of the value of a strong business plan – and expect a potential vendor partner to have one – Baptie said that sales and marketing enablement is a must-have.
McBain agreed. Just as sales and marketing is a major weakness for most legacy partners, the majority of new partners “are not going to make the move,” he warned. “You need to get to the new buyers, you need to work with your partners to get to the new buyers. And you have to provide the air cover to make that all work.”
McBain cautioned the conference’s attendees that expanding their partner programs to include enough “shadow partners” could boost their partner base 5-to-10X in the next few years. As a result, automating channel processes and offering robust self-service to partners will be a competitive advantage in 2018.
“If you do anything on a spread sheet today, if you do anything in a manual way, you’re going to get blown up — first by your new partners, but second by your competition,” warned McBain. “There are just too many permutations and combinations today not to be automated.”
Replays of the presentations made by McBain and Bapties, as well as those of the other presenters at ImpartnerCom18, are available here.