Techaisle Blog

Techaisle’s landmark survey of 2,115 channel partners, representing a cross-section of the partner community, shows diverse concerns reflected in the business issues data stemming from a fundamental change in how the IT channel engages with customers. Like the IT function, the channel has typically served clients as a problem-solving option, able to plug a defined technology gap with a functioning system. However, as “business infrastructure” became indistinguishable from “digital infrastructure,” the definition of what IT needs to deliver has morphed. IT is now expected to support the business in ways that deliver tangible business benefits. The buyer community increasingly insists on outcome-focused project definitions, and procurement departments have started using shared-risk approaches, rather than traditional RFP-style responses to static requirements, to optimize the impact and value of systems that deliver new business functionality.

In 2017, 11% of small businesses and 14% of midmarket firms preferred business outcome-based, customer success-driven pricing from their channel partners and cloud solution providers. In 2021 the percentages have doubled to 22% and 28%, respectively. On the managed services side of the equation, SMBs have a very definitive view of managed services pricing. From a current payment method on a per-device/per-seat basis, they want to transition to a company-wide, fixed recurring fee. This type of payment takes the uncertainty out of the picture. However, similar to outcome-based cloud solution deployment pricing, 29% of SMBs prefer incentive pricing tied to performance levels guaranteed by the MSPs. Data also shows that 78% of SMBs want to work with suppliers who can connect business challenges with technology and design, architect, deploy and manage technology solutions that deliver business outcomes. The data speaks for itself. Contracts will need to specify the anticipated benefits resulting from technology implementations. Supplier rewards, at least above some nominal run-rate level, will need to be tied to achievement (or extended via over-achievement) of these objectives.

Writing is on the wall. Business outcomes-based, customer success-driven pricing is imminent.

With renewed growth prospects, SMBs looked to platform technologies to support new initiatives in still-uncertain times. Agility has become the watchword for new automation projects, and acceptable timeframes cannot be in months. There are few absolute certainties in technology, but one subject beyond debate is that the cloud has permanently changed how technology is deployed and consumed within SMBs. What are the key issues that SMBs are considering when planning their cloud strategy as they identify the portfolio of products/services that best meet their "new normal" business needs? Five key issues have become intrinsic to the development of SMB cloud strategy:

1. Cost

Within SMBs, the cost is always an issue in business decisions. However, with the cloud, the cost is taking on additional meanings. Cost is not only a reduction in CAPEX or OPEX. Cost also relates to the missed revenue that may result from an inability to address new market demands. Cost is a function of needing to recover from a catastrophic event within the business. Cost also relates to a perception that competitors are pulling away or realizing that business, as usual, is no longer enough – that traditional approaches are no longer sufficient. Cost, across these many dimensions, has become an essential factor in building a cloud strategy.

Digital transformation provides enormous opportunities for the channel partner, particularly the reseller community, that has been negatively impacted by the recent economic downshift. Although 71% of partners offer digital transformation solutions to their customers, only 10% help their customers integrate digitalized processes to deliver real digital transformation business outcomes. Channel partners focusing on a single type of product or service cannot act as trusted partners in digital transformation. Instead, they become suppliers to an ecosystem that other solution providers are tapping into as they work with customers to evolve digital transformation capabilities.

Digital transformation is demanding that channel partners develop extensive new capabilities and best practices. It also offers a means of establishing a business-level customer relationship to secure ongoing/escalating account revenue and influence, which will improve the business outlook (and enterprise value) of firms able to capitalize on customer need for digital transformation support.

Techaisle surveyed and studied channel partners globally to understand the best practices and critical competencies that channel partners are building to be more successful than others.