How Partners Are Adapting to the Cloud
This article is based off a B2B Revealed episode. You can listen to the episode or read the article below.
Your partner channel sees the world differently now. The cloud has changed everything. For partners today, it’s adapt or die.
On-premise software and hardware are giving way to cloud-based solutions. This is forcing a swift evolution in go-to-market strategies for independent software vendors, systems integrators, and more.
B2B tech companies often have hundreds or even thousands of partners. That’s a huge and rapidly changing ecosystem.
As a market research firm working exclusively with B2B tech companies, we’ve witnessed scores of partner evolutions first hand. Here are eight trends that partner channel leaders should be aware of.
Partners Curry Favor With Business Leaders.
B2B tech partners, as a rule, are moving away from targeting IT. Instead, they’re focusing on business leaders.
Many of our projects have revealed that partners are making significant moves to identify talent who can target business-decision-makers in client accounts. It’s a company-wide effort across delivery, sales, marketing, and more.
In truth, partners are struggling with this change. In the past, technology expertise alone could make a partner successful. For example, “we can set up SAP” used to be enough. Now, partners also need to be business experts. Something like, “we know how to transform your accounting” is a better strategy these days. Demands have evolved and become more complex.
Vendor-Offered Business Training Gains Importance.
Since B2B tech partners are increasingly selling to business leaders, partners want a vendor who can help them speak to the business side of the deal.
In fact, many software vendors are expanding the amount of business training that partners can access so it matches or even exceeds that offered for technical training.
Partner/Vendor Monogamy Is On The Way Out.
We’ve seen in our research that partners are less likely to work exclusively with a single vendor.
Rather, partners are increasingly offering a mix of services that cross various cloud platforms and apps. A partner may offer AWS, Azure, and Salesforce to its customer base, for example.
This represents a significant shift in partners’ business models. Ten years ago, it would have been rare to find a partner who offered competing technology stacks from the same shop.
Partners Are Climbing Verticals.
Thanks to the cloud, partners can also be more vertical-focused than they were in the past.
Partners used to take vendors’ neutral solutions and make them more industry-specific.
Today, partners can simply point customers to a range of cloud-based solutions that are designed to meet the needs of a certain vertical market.
Partners of the past were technology implementers. The role is shifting to more of a business liaison.
Vendors’ Partner Programs Are Lagging Behind The Times.
Many vendors are failing to capitalize on the changes in their partners’ world views.
Some vendors maintain a product-centric focus and foolishly try to force their partners to fit in with it. This doesn’t work so well now that partners are increasingly concentrating on business and industry.
As a result, partners and vendors often have conflicting strategies.
Partners Are Less Restricted By Geography.
In the past, partners focused on regional dominance, perhaps by city or even country.
With the cloud, partners are less limited by regional boundaries.
Now that the buyer’s journey is primarily digital and many solutions are delivered via the cloud, the need to pick a local partner is greatly diminished.
Unfortunately, many vendors still assume regional selling and delivery constraints exist in how they award and classify partners.
This needs to change.
Big Data Is Driving More Sales.
Vendors can now better support software as a service, infrastructure as a service, or platform as a service solution partners by providing them with usage data.
With this information, partners can learn whether customers are using a certain cloud service more than others, which features customers rely on the most, and which features are rarely used.
Equipped with this knowledge, partners have a better chance of finding and prioritizing smart sales opportunities.
Big Deals Have Given Way To Recurring Revenue.
Lucrative development and service contracts for on-premise software installations were once the norm. Often, these contracts entailed years of service with custom extensions built by the partner.
With the rise of cloud-based solutions, many companies have switched their technology spending from CAPEX to OPEX.
The large cash outlays and contracts required for on-premise rollouts no longer exist.
Instead, smaller drips of recurring revenue have taken their place. Hello, subscriptions.
Know Your Partners.
In sum, any partner program leader who understands these trends has the knowledge to retain and grow partnerships.
If you don’t understand how these trends are impacting your partner channel, perhaps it’s time to start asking the tough questions that only a market research project can answer.
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