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Techaisle Blog

Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.

Lenovo Partner Hub – a great beginning of a long journey towards channel empowerment

What should vendors do to build strong relationships with partner channel partners? Where should vendors invest in the success of current relationships? Techaisle data shows that it is generally tricky to replace channel partners that exit from the vendor's orbit. In many ways, the core challenge in channel management is determining the optimal allocation of enablement (effort) and investment (funding) options. A program capturing the best options in all areas would be prohibitively costly. Channel program management needs to allocate attention and investment to the areas that align with their specific goals.

The new Lenovo Partner Hub is the beginning of a long journey. It is one of the most massive transformations within Lenovo. What I like about the Partner Hub is its focus on providing excellent partner experience through a simplified content presentation, persona-based dashboards, bid requests, quoting, and product ordering for both PCSD (PC and Smart Devices Group) and DCG (Data Center Business Group). Simplification is at the core of any partner program, and Lenovo has nailed the beginning.

Lenovo's global process owners from business units and key partners in all geographies across thirteen countries contributed to harmonizing the design and tools. The single objective was to give time back to the partners so they could focus on their growth plans and customer conversations.

Vendors tend to consider channel enablement and investment as costs associated with specific product sets – and as a result, these activities get tied to product sales performance. However, although well-intentioned, often, this approach ends with the channel partner positioned as a vendor sales agent, which connects with internal vendor accounting requirements but poorly aligned with the core value provided by the channel partner to its mainstream business customers. The channel's role – and its most significant opportunity – lies in focusing on buyer needs. Successful vendors are building programs and partner platforms that empower channel partners to maintain vendor presence in complex solution environments – not sales agents. Lenovo is one such leading vendor who is trying to enable empowerment approaches through Partner Hub that focus on business outcomes and partnerships.
Designed and developed internally at Lenovo, five different portals combined into one platform with an agile approach rolling out new changes every single day. Lenovo's advantage is that it does not have to rely on nor negotiate with third-party partner platforms for customizations, unnecessarily prolonging the partner empowerment approach.

A grid-like dashboard has five distinct areas – Deal registration, Bid requests, Product Ordering, Asset Library, and myPitch. There are different dashboards with pre-defined quick links for PCSD, DCG, geographies as well as personas – Sales rep, Sales manager, Marketing and Admin. The quick links get updated with the use and memorization of frequently used tasks. There are also groupings for sales, product, and services, solutions, marketing, and training. An easy to use tool is available for contact and lead management.

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COVID-19 Impact on Channel Partners

COVID-19 is a pandemic. No market segment is immune to the economic shock. The channel comprising of MSPs, systems integrators (SIs), dealers, resellers, VARs and retailers form the essential cogs of technology’s eco-system that puts products and solutions in the hands of customers. COVID-19 is challenging the channel. As per Techaisle’s global channel partner census count, there is one channel partner (excluding consultants) for every 160 commercial businesses and 1780 households. It is natural, in current circumstances, when both consumer and commercial IT spending is being reined in, for channel partners to lower their 2020 revenue growth expectations and re-prioritize business objectives. Techaisle leveraged its panel of 225K channel partners to understand the impact of COVID-19 on channel business. Data from COVID-19 impact survey of channel partners (excluding small retailers) shows that the percent of channel partners expecting revenue increases in 2020 may drop by 20%. Good news is that 63% of partners are still expecting increases but not in the high-teen percent that they had planned for at the beginning of the year.

Download to read full analysis that covers - expected revenue changes, business concerns, top priorities, new comfort zones, digital transformation and need to deliver customer success in crisis. Free download, no sign-up required.

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10 Channel Partner Predictions for 2020

The new year (and decade) provides an opportunity for assessing the business of the channel: what has shaped the channel in the years leading up to 2020, and what we expect to see in the coming 12 (or in some cases, 24 or 36) months. Here are 10 key areas where change is afoot based on our extensive global channel partner studies leveraging our network of 250K channel partners.

1. Channel partners will become navigators in plotting customer digital transformation strategies.

To help customers expand their focus to ‘the art of the possible’, innovation-focused partners will proactively explore new technologies and educate their customers on potential benefits and related business process changes. Partners will, in short, become navigators plotting customer digital transformation strategies. Techaisle’s urgency and importance ratings showed that this was not ‘top of mind’ for channel partners in 2019 – but it will be important on the strategy radar, as partners will build plans (integration, migration, architecture & orchestration for digital transformation) for viability into the next decade. By the end of 2020, percent channel partners delivering DX will grow by 80%.

2. The NEXT Channel (Networked, Engaged, Extended, Transformed) will emerge.

Channel partners will begin to abandon ingrained behaviors and move to new approaches that will enable NEXT (Networked, Engaged, Extended, Transformed) channel businesses. The core changes in the demands on different areas of the channel business are critical and challenging, but they can be seen as more effect than cause. In all aspects of channel business, long-held business tenets will be replaced by an emerging reality that has been ushered in by the move to cloud and amplified by other trends – changes in buyer behavior, management and process changes, evolutions in service/technology delivery, how technology is being acquired and used.

3. Pure-play MSPs will drive (or attract) M&A activity.

Traditionally, MSPs have offered customers advanced and highly-efficient solutions to current problems, but MSPs do not tend to customize offerings for individual customers – doing so undercuts the efficiencies at the core of their business models. This model doesn’t perfectly address DX requirements, which begin with a vision of business rather than technology outcomes. During 2020, 40% of MSPs will foresee mergers and/or acquisitions in their 3-year plans. With the market valuing MRR-based businesses at a high multiple vs. firms based on product transactions, MSPs will appear to be in the best position to attract outside investors.

4. P2P collaboration and ecosystem alliances will move from opportunistic to strategic.

Solution packaging is a customer choice issue – and customers are choosing to move from turnkey systems to hybrid environments that can be aligned with their evolving needs. This will require an accelerated frequency of partner-to-partner collaboration, not opportunistically but strategically. Pursuit of this ecosystem business approach will require changes in go-to-market strategies and in the ability to integrate around data rather than physical system components. This escalating requirement will expose vulnerabilities of channel partners in meeting customer expectations. Ecosystem alliances and P2P collaboration will become non-optional. By end of 2020, 70% of partners will collaborate frequently for sales (not as much for deployment, support) with an average of 3.5 partners.

5. Influence of IT consultants, CSBs will increase for professional services.

IT buyers are relying much more on consultants as they look to shape strategies that are aligned with current and emerging opportunities for greater IT leverage. This trend will have a ‘trickle-up’ effect: IT consultants and CSBs will become more specialized to deliver insight on vendor and technology options, technology compatibility, architecture, deployment and management. By the end of 2020, 25% of channel partners will consider their business models as “Consultants”. However, these partners will need to incorporate unique intellectual property (IP) into their processes and offerings as they will be unable to fund their operations with margins from acting as middlemen. They will structure their businesses to deliver professional services - billable in one form or another – to address customer needs for strategy, planning, onboarding/training, integration and support.

6. Market will reward channel partners who flexibly deliver multi-vendor solutions.

Toolkits and not hammers. The “law of the hammer: if the only tool you have is a hammer…everything [you see] is a nail.” Channel partners have tended to concentrate on a limited number of core platforms – typically, those that they have invested in, via certifications – and looked for opportunities to build around these platforms wherever they engage. Successful channel partners will tailor multi-vendor solutions that address customer business requirements, layer in support and integration, and land on a position that offers a platform for repeat business and healthy margins. Single-vendor solution providers will most likely be focused on promoting features which will lead to reduced profitability because single-vendor solutions are easy to comparison shop (leading to discounting). By the end of 2020, 50% of partners will be experts in assembling multi-vendor-best-of-breed cloud options.

7. Value creation will start with the customer and not from vendor out.

Traditionally, the notion of ‘value add’ in the channel is referred to a reseller’s ability to demonstrate that they augment the base product with some combination of technical and/or logistical support. Technology is generally sold on the basis that it will help businesses to cut costs, accelerate cycle time or expand reach and revenue, once a transaction is complete, the onus for realizing these objectives rests with the customer. Cloud and its pay-as-you-go model will impact this balance, and the inexorable twinning of IT solutions and business processes / outcomes will further disrupt mainstream business expectations. Channel partners will innovate in value creation for customers and will gain more durable advantages than those who continue to focus tightly on new technologies. As a result, in 2020, channel partners will go ‘deep’ rather than ‘wide’ specializing and clustering around four segments.

8. Cloud application deployment and delivery to mainstream customers will come into sharp focus.

With the notable exception of Microsoft, most of the primary cloud suppliers (hyperscalers – notably AWS and Google – but also SaaS suppliers) have lacked deep experience with the channel, and haven’t developed effective programs or coverage strategies. There will be an increased investment in staff training, certification to increase professional services revenue with a focus on containers (Kubernetes), microservices, open source, agile development to deliver cloud apps for customers’ customer facing apps as well as apps to support customers’ internal processes and operations. However, channel partners will be challenged due to legacy integration issues, missing APIs, lack of development/QA skills and inability to conduct extensive security testing. Regardless, by the end of 2020, slightly more 50% of cloud partners will have one or more cloud app development capabilities and MS Azure will be the hyperscaler of choice. AWS VMWare solution at the edge, a recent addition, will be of interest to channel partners. Red Hat Ansible for automation will find a footing within partners.

9. IP-led solutions and solution development funds will be key elements of success.

A successful cloud channel partner’s desire to keep its own IP front-and-center in the solution will be rooted in several wise channel objectives. By end of 2020, 60% of channel partners will rely on sell-to and sell-with sales models. And for 45% of partners, solution development funds will be among the top 2 preferred vendor incentives. Historically, the hardware vendors had several levels of compensation and though software suppliers and the hardware vendors started in different places relative to partner compensations, they are now getting to a similar model. By the end of 2020, 25% of established channel partners’ cloud revenue may be attributable to products that they have built internally, their own IP, on top of vendor products.

10. Channel empowerment will align “customer-in” rather than “product-out”.

Channel empowerment (as opposed to channel enablement) will feature into vendor program requirements. Channel partners have looked to vendors for information on technology directions and the dependence will grow more acute because of structural industry change. Vendors-channel partnership approaches, however well intentioned, often ends with the channel partner being positioned as a type of vendor sales agent. The channel’s greatest opportunity is in meeting buyer needs – and that requires that the channel partner plot a path that is attuned to buyers rather than vendors. In 2020, successful vendors will build programs that empower channel partners to maintain vendor presence in complex solution environments – not sales agents. These programs are unlikely to arrive fully-formed; they will evolve as needs and success paths become more clearly understood. In 2020, look for leading vendors to provide empowerment approaches that focus on business outcomes and shared risk partnerships.

 

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