How can cloud suppliers identify the partners most likely to be successful or very successful in selling cloud? Techaisle’s 7th year of channel tracking survey data indicates that a powerful indicator is found in the growth paths identified by channel firms.
Characteristics of very successful cloud channel partners (“what to look for”)
- Very successful cloud channel firms view advanced solutions as major opportunities and are focused on growing business in BI/analytics and IoT
- Very successful cloud firms recognize that hybrid IT is the key and are anticipating increased revenue from data and/or application integration than their less successful peers
- Nearly 90% of very successful cloud channel firms (as compared with just 23% of unsuccessful firms) offer IaaS to SMB customers
- Over 90% of very successful cloud partners offer SaaS today. Less than one-third of unsuccessful cloud partners offer SaaS, and 20% neither offer it nor are planning to do so
- Successful cloud partners view partner-to-partner (P2P) relationships as a strategic imperative, whereas unsuccessful partners connect with other channel firms on an opportunistic basis
- There is a clear, multi-year trend of very successful cloud channel partners differentiating themselves by selling self-branded (and supported) cloud offerings
- There is strong evidence in data to support the notion that very successful cloud partners are focused on assembling multi-sourced solutions to meet customer needs, 57% of very success cloud partners as compared to 31% of unsuccessful and 34% of successful partners
- Three-quarters of very successful and nearly 70% of successful cloud partners offer UCaaS, vs. just 20% of unsuccessful firms
- Successful channel firms are actively participating in cloud and IT orchestration and are investing in technology advisory & architects
- Digitalization & digital transformation are new focus areas of very successful channel partners
What to look out for – characteristics of unsuccessful cloud partners
Unsuccessful cloud partners appear to be tightly focused on mobility and VDI. Three-quarters of channel firms that are unsuccessful in cloud expect to increase mobility solution revenues, a figure that is much higher than the 44% reported by companies that are very successful with cloud. Interestingly, though, the situation is exactly reversed when talking about DaaS, mobility solutions rooted in the cloud. More than half of channel firms that are successful or very successful with cloud anticipate increased DaaS revenue vs. just 17% of firms that are unsuccessful with cloud. Unsuccessful cloud partners are also somewhat more likely than peer organizations to look to managed services for increased revenue.
Budget & staff allocation:
Techaisle’s research asked respondents to indicate where they were planning to increase budget and staff allocations in the upcoming year. Unsuccessful firms have very different priorities than their more-successful competitors. Successful and very successful cloud channel firms are much more likely than unsuccessful peers to be focusing on new investments in lead generation and pre-sales support. Unsuccessful firms are more likely to focus on administration of partner programs and other administrative areas. Collectively, these findings paint a picture of two discrete types of businesses: one focused on creating new business opportunities, the other focused on administering existing programs. Data shows that 3X as many successful partners as unsuccessful partners are investing in lead generation and pre-sales support.
Procurement source of cloud solutions:
Successful and (especially) very successful cloud channel businesses are effective at sourcing cloud solutions from distribution – which in theory, opens up a wide range of solutions for these firms and for their customers. Unsuccessful cloud channel partners, on the other hand, are much more likely than peers to obtain cloud solutions from another channel partner. The fact that unsuccessful cloud channel members are not inclined towards P2P relationships, but that they see P2P as a major source of cloud solutions, indicates that these unsuccessful firms do not view cloud as a primary option within their accounts, and will take action to source cloud solutions only when pressured to do so by the client. Data shows that 2X as many successful as unsuccessful are procuring cloud solutions from distributors.
Portfolio expansion plans: Every vendor approaching a new channel partner wants to hear about that partner’s portfolio expansion plans – after all, that’s where the new supplier’s opportunity resides. But there’s a limit to how fast and far a channel partner can reasonably be expected to expand, especially in a segment where a lack of in-house expertise and financial resources are cited as key constraints.
Survey data illustrates both the current number and the planned number of cloud solutions offered by very successful, successful and unsuccessful cloud channel members. The first group is planning to grow its portfolio of offerings by 28%. The ‘successful’ group is planning to increase by 54%, which seems very ambitious. The ‘unsuccessful’ group is eying an average increase of 423%, which is in whatever realm lies past ambition, at the edge of fantasy. As a supplier, it’s important to find new channel members, but equally important to find those that have the capacity to focus appropriately on ramping up new offerings. Companies that are looking to shore up a weak market position with a ‘whatever sticks’ approach will boost partner rosters but won’t contribute positively to market momentum and may end up consuming more resources than they contribute in new business.
In 2013, very successful cloud partners were about 45% more likely than successful cloud partners to prefer sales built around internally-branded and supported cloud solutions; in 2018, the gap has increased to nearly 70%.