The predictions rely on an extensive research initiative conducted throughout 2021 – the year in which the impact of the pandemic on economic activity and IT consumption was becoming more apparent. Leveraging a panel of over 250K partners, Techaisle surveys more than 5000 partners and has qualitative conversations with hundreds of partners. Techaisle's 2022 in Focus research series illuminates issues and requirements in the vast and complex partner ecosystem.
1. Cloud economics and cost optimization consulting will challenge channel
Cloud cost optimization and economics will be the top cloud consulting service demanded by customers, challenging partners (and their vendors) to provide transparency into cloud costs and ensure that customers receive the best available Ts& Cs. To deliver value to the customer, both partners and suppliers will need to define the current state of workloads and a forecast for the future state, adding value through the development and deployment of processes to support cost optimization and compliance/risk management.
2. MSPs will expand their portfolio to include cloud managed services
Cloud technology velocity will open new services opportunities. For example, as businesses will increase their reliance on cloud-managed services to align IT with business strategies, deep-pocketed, progressive MSPs will increase investment in staff training to grow their professional services revenue. As a result, the MSPs will focus on containers (Kubernetes), microservices, open-source, agile development, API management, hybrid cloud workload management, and security and compliance management.
3. The gap between the cloud "haves" and "have nots" will increase
Cloud vendors will invest in cloud channel leaders rather than in the channel as a whole which will accelerate the gap between leaders and laggards and stress the viability of channel firms left behind. As a result, the year will see a separation between channel partners that have the expertise to combine transformative and traditional business models and those that do not.
4. Vendor and partner equilibrium will be unstable
Vendors have been mitigating channel conflicts through "double bubble" compensation models, creating clear guidelines around where the vendor will sell direct and reducing competition between dissimilar channels. However, the complexity associated with cloud consulting and digital transformation adoption acceleration will have vendors questioning the role of partners. Channel partners will be present in several accounts coveted by direct sales teams – increasing vendor/channel conflict. Vendors will manage conflicts and will not eliminate them.
5. The cloud marketplace will be lots of smoke, but the fire is nearer
ISVs and channel partners will have a tough time finding each other and ultimately finding the end customer. Despite low barriers to entry, few will find immediate profitability. Both partners and marketplace operators will need to build and manage relationships, plug into sales and marketing programs, drive investment in the implementation and support for end-users, and fund all of this on a fraction of the monthly fee associated with each service sold. A high percent of end-users will be marketplace curious and not committed customers. It is not how enterprise customers purchase, as yet. Marketplaces will not kill the channel; instead, channel partners will be a vital link in the buyer's journey.
6. Vendors will struggle to identify the most cost-effective mix of partner enablement levers
If it's true that "good blocking and tackling wins football games," it's also true that "good enablement is the foundation of channel success." From a vendor perspective, enablement is a matter of resource allocation. In theory, any vendor could identify and then replicate, at least to some extent, industry-leading practices across all leading sales and marketing areas. The problem with a "Frankenstein" approach along these lines is that it would incur an unsustainable level of cost. Instead, vendors will cover all primary bases but allocate the highest proportion of resources to the areas with the most significant impact on their partners. The first question that vendors will struggle to answer about enablement, then, isn't 'what might we invest in?' but 'what programs are most important?'. Innovative vendors will invest in Partner Management Cycle.
7. Cloud competition will force vendors to second-guess partner incentive structures
Incentives are one of the areas of highest vendor channel investment. While the key to success is more in execution than strategy, vendors will increasingly rely on competitive announcements to understand and adapt the preferences of the partner community when allocating funds across their incentive areas. Only very few vendors will drive incentive innovation to cover pre and post-transaction, startup, ramp-up, operating by weighing them against revenue potential and timeframes. The incentive north star will be spinning a revenue flywheel.
8. Roster and portfolio issues will force focus on Partner Management Cycle (PMC)
Vendors will question whether they have the right quantities and types of partners to develop/meet customer demand. Partners will ask whether they have the right mix of technologies, services, and applications to deliver the complete suite of solutions expected by customers. Actionable answers to both questions will confound vendors and partners. Vendors will look for market presence, indicating the breadth of channel expertise associated with target categories. As a result, several vendor partners will redraw their channel coverage models.
9. Partners will focus on efficiency and control over expansion
Business issues relating to efficiency and control will become more critical, while the expansion will decline in importance. Efficiency and control - improving the effectiveness of sales and marketing, managing uncertainty, keeping pace with the competition, and focusing on customer retention - will be the essential considerations in shaping the interests and actions of channel partners. Focusing on new markets and increasing engagement with vendor partners along with a previously maniacal focus on new account acquisition will drop in priority due to partners' already unmanageable sales pipeline backlog.
10. Co-creation and shared risk partnership approach will come to the fore
As digital transformation projects shift even more emphasis onto business outcomes over technical outcomes, channel partners will begin to structure contracts that offer customers lower up-front or monthly costs but additional payments when customers realize business objectives. To transition, transformative channel executives will commit to business strategies and contract terms consistent with shared risk. At the same time, their vendor suppliers will focus on metrics that prioritize and incentivize lifetime customer value.
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