The key strategic question that is foremost on the minds of channel partners is no longer whether to build a cloud services model, but how quickly to build it.
Technology vendors need to enable this important shift in the channel business model; vendors have no choice either, as they seek to build long-term differentiation and partner loyalty in a complex landscape. Vendors must transform their traditional partner programs to align with service provider (SP) models, to drive mutually agreed partnership goals. Service providers must be transparent with vendors about their go-to-market priorities and requirements. This transparency and adaptability will enable a strong and mutually beneficial partnership foundation.
In my earlier postings, I proposed a framework for technology vendors to engage service providers, by breaking down the GTM components into upstream and downstream engagement areas. The focus of these may vary based on business model, maturity of partner relationship and end customer objectives.
Based on our research and client engagements, here are 10 crucial strategies to consider as you engage and build your SP channel.
1. When forming partnerships, understand where the partner business model is headed, and develop a clear understanding of what the SPs are trying to achieve with their customers.
2. Your engagement model needs to adapt to the requirements of the SP business. If an SP has multiple business models, the support by GTM area needs to be adapted accordingly to meet the needs of each model (e.g., private cloud builder versus cloud infrastructure provider).
3. Communicate your strategic business priorities and product roadmaps to your partners clearly and regularly. They need this transparency before making their own critical, long-term technology investments. It is one of the most important factors stated by SPs for a successful vendor partnership.
4. Ensure that your engagement model is based on shared risk and reward objectives. The traditional approach of selling your products upfront and pushing all the risks (of a recurring revenue model) to the partner will yield only short-term benefits.
5. Flexibility in licensing and pricing models is especially critical. Ensure deal-pricing strategy and commercial terms reflect the end customer’s pricing requirements for managed service/cloud deals, optimizing Opex versus Capex requirements.
6. Target your training and enablement activities on multiple audiences within the SPs: the technical, operations, sales and presales teams. This is important to ensure successful adoption and evangelization of your technology at all levels.
7. Establish clear governance rules and processes at three levels within your partners:
a. Management: Ensure shared goals and commitments and an empowered engagement.
b. Operations: Ensure that they understand and internalize product roadmaps and developments.
c. Sales: Ensure that offerings are positioned correctly with customers and against competition.
8. Align your SP account manager skill sets and compensation model based on joint GTM requirements. Don’t assign traditional reseller channel managers to manage SPs as this will only perpetuate the "sell-in" mentality and inhibit a long-term relationship.
9. While upstream areas are the primary differentiators, ensure that downstream focus areas such as collaborative marketing support, lead generation, presales support and technical support assume increasing importance as the relationship progresses.
10. Provide integrated upstream and downstream support to smaller/emerging service providers; they typically have less knowledge and resources to build scale with their customers and really need the help.
In 2013, pick your channel bets, adopt new GTM paradigms and drive the transformation to managed/cloud services with a sense of increased urgency. It will ensure you hit the ground running and ahead of the pack in the New Year!