With the global economy shifting to self-service, a growing demand for instant purchase and delivery, and everything moving to the cloud, there are some big shifts happening in the world of sales. But where do these changes leave the channel? Forrester has observed channel sales as representing more than 75% of world trade, and in a lot of cases, the channel makes up a significant portion of an organization’s sales strategy. So what strategies will the channel have to adopt over the next couple of years to succeed in this changing economy? What future channel has, 10 years from now? Rob Spee, Senior Vice President, Global Channel and Alliances, BeyondTrust in an exclusive interaction with Channel360MEA, listed the major shifts coming that will force businesses to adjust their channel strategy.
What is the future of VAD going forward?
Imagine ten years from now, when all products and services are purchased on a marketplace without any vendor sales rep intervention. That means the end of the classic reseller. Partners will have to drive business outcomes to survive. That’s going to be the business model, and as a result, we are going to see a number of significant transformations.
With the demise of the classic reseller, the classic distributor that is serving the VARs today will have to become more of a partner services and enablement hub. Vendors will be challenged to deliver the services training that is needed by partners to drive customer success, which often depends on the integration of multiple solutions.
Distributors have an opportunity to build centers of excellence around their vendors’ SaaS offerings. Since they’re good at bringing in multiple vendors, and offering those up to partners, these will become hubs where they can support and train partners on multiple products and services. They help ramp up partners’ delivery capabilities through co-delivery and bench support.
To accomplish this, they’re going to have to shift their business model more to a services mindset than their current transactional model. We could even see distributors’ value-add and margins increase as they move to this services model. Another big change will be driven by the shift to marketplace purchasing: as more buyers switch to self-service, the channel influencer will become paramount.
With the demise of the classic VAD, do you mean the disappearance of VAD from the chain?
Oh! VADs aren’t disappearing. Their role is evolving from logistics and transactions to enablement and services. VADs will help enable their partners to make the transition from perpetual license resellers to subscription license solution providers. And VADs will become service delivery hubs, augmenting service delivery capabilities of their partners, delivering services alongside their partners when needed.
What do you mean by the term ‘Influencer Channel’?
With users purchasing directly from the marketplace, who is educating and influencing them along that buying journey? In the consumer world, we rely on friends and the advice of online reviews. Technology buyers rely on co-workers, online communities, and trusted partners. There will be a heightened need to think about who is planting the seeds of our solutions in the minds of the customers. This is where the influencer channel becomes so important. Our service partners are influencers, but there are other influencers in the chain that we may not even be talking to today. Companies will need to strategize how to get in front of influencers.
Channel success, partner success, and company success are going to become a team sport. The role of influencing the influencer will fall to everyone in the company, whether in marketing, sales, channel, or technology. This effort to influence is going to drive a further shift in channel technologies. Where today we focus on partner-originated opportunities to determine success, the new influencer channel model will make this difficult to track. More and better technologies are going to have to come out in the channel stack to accommodate the need to track influence.
With the evolution of VAD and the emergence of Influencer Channel, what kind of channel ecosystem is expected to emerge?
Like VAD, Classic VARs are also not disappearing, rather their role and business models will be evolving in the coming days. Regional and Global System integrators will continue to play large influential roles in technology buyer’s decision-making process. And they can help buyers de-risk their technology purchases through their implementation and integration of services to help the customer achieve their desired business outcome.
Additional non-traditional influencer and referral channels will emerge. These “partners” won’t fit the typical partner profile and will require completely different ways of attracting, motivating, and tracking their impact.
With the new channel ecosystem and new selling strategy in place, how will the support from the principle (vendors/ brands) evolve?
I expect to see vendor support evolve in several ways. It has already begun, partner programs are evolving away from the classic metallic tiers that reward partners driving the largest revenue. New programs are emerging that reward partners for their value add, whether that partner originated revenue, services, innovation, or influence. Partner incentives are evolving from thin transactional margins to enablement for larger post-sales service margins. And I expect to see greater sales support from vendors in the form of co-selling with partners, including cloud service providers like AWS and Microsoft.
In a nutshell, what does the coming decade instore for the channel?
Leading channel organizations through all this transition won’t be for the faint of heart. There are still a lot of unknowns that make it difficult to foresee exactly where this shift will take us, but we can expect to see new roles, new business models, and new technologies rise to lead us through the challenge in the coming years. Of course, the only constant is change, and one thing we know for sure is that it’s going to be exciting. The great news is that the channel is a tight knit community of channel pros who love sharing and solving problems together. Get out there into the channel community, listen to the channel podcasts, attend live and online events, and keep your company up-to-date on the channel of the future.
To summarize we can say get ready as, ‘A transformative decade for the channel is approaching’.
