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Redefining the channel: the changing partner landscape

Redefining the channel: the changing partner landscape 

In the process, they’ve outgrown the point products traditionally sold by VARs.

Gone are the days when VARs simply resold technology to their customers. Or system integrators only sold services with technology companies. Or where outsourcers bought technology directly from technology companies to run systems for their customers.

All partner “types” are being forced to evolve and step outside of their traditional business models, doing things that were once unthinkable. Systems integrators are reselling technologies while outsourcers are adding new sell “through” and sell “with” business models to their sales strategy.

If a partner company hasn’t at least considered altering its business model at this point, its chances of survival are quickly diminishing. A transition to a hybrid-partner model can take up to 18-months in a market with a six-month sales cycle. Partner companies must face a hard choice – evolve or die.

Partners evolving to a hybrid model must ask themselves three questions: How do I quickly change my offerings to meet new customer demands? How do I make the change without impacting revenue flow? How will I support a new business model?

New Demands, New Portfolio, New Business Model

Some of the pain points that will drive change in a partner model are mixed responses from customers on traditional products: “I like your product, but can you help me run my business in the cloud?”

To compete in the cloud-computing arena, partner companies will have to resell another company’s cloud offering or establish their own. Many VARs are setting up their own clouds by leveraging their expertise in installing, implementing and servicing data centers. However, not so many are adept at selling a cloud solution.

Meanwhile, systems integrators are starting to resell other vendors’ products, which would have been unheard of three years ago. To provide a complete end-to-end solution for their customers without giving away products, they’re adding a “sell through” aspect to their process of offering cloud solutions.

Evolve and Minimize Revenue Impact

Any partner company that attempts to evolve its business model alone will face an interruption in revenue for up to a year and a half, complicated further by unpredictable levels of margins throughout a diverse range of products and services.

Smaller and more agile companies will make the transition sooner, potentially leveling the playing field with their larger competitors. Larger companies will in turn acquire these firms or merge with larger organizations that offer complimentary services, such as the recent acquisition of the French–owned IT VAR Bull Group by Atos, a software consulting and hosting firm.

Consolidations will likely prove to be a quick path for VARs, systems integrators and outsourcers to leverage their collective strengths and minimize interruptions to revenue.

New Model, New Marketing

As partner companies evolve, so must their marketing disciplines. Traditional direct mail, brochures and specialty advertising items no longer match the unique, end-to-end solutions that customers want, or the way that customers research solutions for their business challenges.

Today’s IT professionals seek information and share insight through a social community of colleagues and even competitors. Blogs, Twitter chats, articles in trade journals, and webinars provide a dialog that addresses a broader set of needs. As a result, they’re better informed and more engaged. More than 60 percent of customers are familiar with the technology before contacting a sales rep.

Therefore, it’s important to engage in these conversations over leadership discussions on blogs, Twitter and through the media. Partners will need to be able to convey their leadership and knowledge over multiple topics, offering advice and insight to help solve the customer’s individual problem. And everything must be digital, social, and searchable.

Credibility can be achieved through customer success stories, shared over Twitter chat sessions, joint blogs or traditional press releases. It’s best to make these arrangements early in the contract discussions, offering discounts in exchange for joint public relations and marketing activities.

This approach to marketing will also change who engages with the customers. While sales traditionally takes the lead, armed with marketing materials, marketing will now have to join sales by driving the customer dialog to demonstrate thought leadership and credibility.

Albeit a long journey ahead, successful partner companies will come out of this transition as trusted advisors, opening new doors of opportunity and new sources of revenue beyond their traditional point products.


Michelle De Hertogh is vice president of business EMC development for alliances, development and marketing.

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