AI, Automation Can Revive The Fortunes Of Channel Partners
A new research has revealed that the traditional partner program is no longer held with the same regard by the channel partners. The survey by Canalys shows that the percentage of partners that view channel programs as important when evaluating IT vendor relationships had dropped from 94 percent in 2016 to just 77 percent today. In addition, nine percent of the channel firms questioned rated partner programs as “not at all important”.
The study noted either a lack of consistency or too many changes to the programs was the top complaint, the survey found. Complexity in achieving certifications and specializations was also cited as a sore point by resellers, VARs, MSPs and other channel players.
While it is a difficult balance for the vendor to strike, the study noted that their channel-focused programs must reflect the changes occurring in the industry. This can also mean that vendors have to categorize partners to include more of a focus on training and certification.
However, compliance to vendors’ partner programs can already seem like a complicated and fractured process for the channel, with evidence of some partners leaving thousands of dollars – sometime up to 50 percent – in rebates on the table.
This is exacerbated by the shift away from upfront hardware sales to software, cloud and annuity income, which itself is a significant hurdle to a traditional IT supplier. Instead of the customer buying thousands or even millions of dollars worth of hardware upfront, clients are demanding a pay-as-you-go model for their IT consumption.
The benefits of the cloud to the customers are clear – including increased flexibility, scalability and cost efficiency – but the challenge to the partner to transition to a services-led business can be huge as they struggle to restructure their own sales and compensation models.
Plus, rather than rewarding them as they once did for closing a sale, vendors are now increasingly compensating partners on renewal of business and ensuring clients take on all the features associated with a solution.
The shift from a CAPEX to an OPEX business model means a partner’s revenues are spread now over the contract period. It is therefore more important than ever that they have complete visibility – through automation – into their transactions and their engagement with the vendor, to enable informed decision-making.
However, the situation is complicated by the fact that many channel partners are used to managing their compliance to programs manually, relying on spreadsheets to juggle multiple vendor relationships and requirements. It is no easy task either for an IT vendor to reorganise its entire channel engagement overnight, especially the global legacy firms that over the years have built up layer upon layer of increasingly complex partner management tools.
Canalys believes partner programs will continue to be vital to partners as they are fundamental to how they navigate relationships with vendors. Canalys’ ongoing research with channel partners shows vendors must involve partners more in their program planning and strategy discussions to ensure programs are valuable.
“As partners develop different service models, the most successful vendors will be those that effectively help partners adapt their technical capabilities. The huge challenge is to keep programs simple while our industry embraces complex new technologies,” said Hiu.
Vendors must take action, such as investing in stronger digital tools, including integrated automation and AI – enabled capabilities, to help reduce partners’ manual administration work. Partner managers must also become more empowered and offer personalized support for individual partner needs. The channel is pressuring vendors to do just this
This is where we have been helping both resellers and vendors by providing both managed services and partner program compliance tools to the channel to ensure partners achieve the maximum return from their investment in technology.
The channel has been fiercely competitive in order to operate on a tough environment to operate. But as vendors evolve alongside their channel partners, automation such as this will be key to the success of the modern partner program.