As in so many spheres these days, a new age is rapidly dawning in the world of IT relationships. Many industry forecasters point to the use of Channels or Partnering rising in all areas of the technology market. It is not hard to find evidence of this, certainly in terms of large, well funded Vendors with fresh piles of raised finance, looking for new Channels.
However what is also happening, and is often less observed, is that more and more organisations traditionally thought of as part of the Channel, are building their own partnerships, or even their own Channels, at an increasing rate.
The reasons for both of these phenomena are the same. Though some are some subtle nuances. As such it’s interesting to explore why this is happening and what influence it may have on some of the decisions organisations make in their own planning.
If we look at things from the perspective of a major vendor, either a large platform provider or a manufacturer of hardware or software products, Channels have always been an attractive route to market. As a relatively inexpensive and less risky way to increase presence, boost sales and marketing efforts, improve and increase product support, capture a host of market intelligence all while simultaneously leveraging critical local knowledge and relationships, building an effective Channel is hard to beat as a route to market. On top of all these benefits building a Channel can also help undermine potential competitors and gain market momentum at a pace simply not possible through other routes to market.
There are of course challenges, as many of those vendors have discovered, building a network of reliable and committed partners who deliver continuously and are not easily ‘wooed’ by competitors can be challenging. Also unless you are at a point of great technical change, such as the introduction of the PC or the Mobile phone, competitors are already there and will already fighting hard to win hearts and minds in potential Channel partners.
These types of relationships have mostly been one of the Vendor ‘owning’ the Channel and making most, if not all, of the rules of the relationship. The Vendor is the authority, the Channel is independent but within the terms of a Channel agreement. Obviously the Channel, especially when it speaks as one, has a voice, but ultimately the Vendor runs the show.
From the Vendors perspective that is obviously a desirable position to be in. After all they bring a critical component of the solution and they invested in setting up the Channel in the first place. They can’t ignore their Channel and they cannot afford to be complacent about their Channel, but decisions are their own. This model of Channel is popular and continues to expand in popularity.
The second model is far more of a Partner to Partner (yes, another P2P) type relationship. It is a model which is rapidly growing and it is growing arguably far faster than the first model. In this model organisations agree to bring complimentary skills and technologies together to exploit market opportunities. Between them they recognise they are able to achieve and deliver significantly more than they can alone. Their relationships are more like an agreement to work together, usually with no partner holding an upper hand, and agreeing up front the terms on how they might do so. Certainly within this model there are varying levels of ‘formality’ and indeed there are many sub models in terms of both the Partnering programs engaged in and the types of agreements made, but as a whole they represent an increasingly important part of the Channel market make up.
The popularity of both models is being significantly boosted and, somewhat ironically, it is largely technology itself that is making this happen. There are two ways this is the case.
The first is the ever increasing power of connectivity which technology is bringing. Today companies of any size can find, evaluate and connect with each other more easily than ever before. They can identify, profile and reach out to new potential Channel members or Partners more and more easily. This fact alone facilitates increases in this area, because there are big advantages to be gained by doing so.
The second is that technology now facilitates collaboration in ways previously unthinkable. It’s now possible for teams to work on projects, almost regardless of location or infrastructure, on projects which ten years ago simply could not have happened with the ease allowed for today. When capability like this becomes available it is almost inevitable that partnerships blossom. New opportunities in cost saving, efficiency and proposal strength are created by this change and naturally they are driving organisations together.
But it’s not only technology driving growth in Channels and Partnerships. The other aspect creating this momentum is an increasing need for Domain knowledge.
The market itself is transforming from one where knowledge of the intimate knowledge and skills in the technology was highly prized, to one where such knowledge is becoming less important. Better systems, built using better techniques, with better testing capability, improved UI’s, along with ever more competent users are ensuring that the usability and reliability, as well as capability, of new platforms or products is of a higher standard year on year. This in turn has given end users the freedom to focus much more on the actual end goals of their use of technology, rather than to have to worry so much about the technology itself. That in turn has meant that the need for partners, whose business model is primarily built around providing and supporting the technology itself, has reduced. What is required, more and more, are partners who understand a specific business Domain. Partners who have built their own business’s around a specific area of business.
Take, as an increasingly common example, a cloud services provider who produces an online environment in which to manage business transactions (probably as generically as possible). This company doesn’t need a partner to fix or manage his technology stack, that is all online and there are engineers and tools in house that can do all of that. What this service provider requires are partners who can either add business value to his online technology stack (for example by tailoring or linking it with some other mutually beneficial technical component of of a particular Domain – lets say LAW). Ideally, in order to do that efficiently, that partner will actually need to understand how LAW works, what a Lawyer needs from a system and exactly where the value of any features lies. A partner who can articulate that value and present it to people who work in that Domain, Lawyers. Preferably a partner that has themselves invested in the people and the systems that support the practice of LAW and who now recognise how this Vendors technology platform fits into their world. That is, increasingly, what a Channel member or a Partner looks like today.
Of course, there are still aspects and areas of technology that continue to resonate with the Channel and Partner models. For example a vendor who produces highly technical solutions requiring a deep understanding of specific communications stacks, systems management or perhaps in cyber security. But these areas are drying up as both the problems, along with the solutions solving them, increasingly vanish into the cloud.
With the trend towards more Channels and partnering set to grow and with the trend towards a more ‘Business Domain’ oriented partnering becoming increasingly important in that area, it’s worth giving some thought as to how your business meets those criteria.
Opinion Piece: Richard Roy, Director, SeZing Ltd