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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.

Does channel partner sales cycle vary by cloud delivery and positioning?

Data from Techaisle’s study channel partners (research analysis documented in Techaisle’s series of reports either delivered individually or as Channel Partner Research Annual subscription service) tell fascinating stories. Excerpt from the specific study of 650 US channel partners selling managed services, based on Techaisle’s database of over 250,000 partners, shows that the sales cycle length varies not only by line of business, but also by expertise levels:

  • Cloud provider channel, on average takes 2 weeks longer in its sales cycle as a cloud provider channel
  • Systems Integrators’ average sales cycle is ~1.5X of VARs because of complexity of SI’s engagement with an SMB. VARs, are often selling products into existing accounts, have relatively short sales cycles, while SIs, who are positioning complex solutions, have longer sales cycles than other channel businesses
  • Even a consultant who is usually familiar to an SMB organization has to prove that they are the right partner and it involves building a plan and showcasing why their advice and solution would be ideal for SMBs

More fascinating are the four charts below.

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12 points for Cloud Channel Transformation

Recent work by Techaisle shows that the need for channel management imperatives has expanded beyond the tactical questions of sales or management metrics or marketing activities. Techaisle has identified twelve fundamental areas where conventional wisdom has not kept pace with the fast emerging business needs of the channel. Channel policies based on conventional wisdom and past history is leading channel organizations away from the practices needed to compete successfully in the cloud market. Techaisle has developed 12 points for transformation of SMB channels table to illustrate ways that channel organizations must alter basic attitudes towards their business in order to be successful in the current and future IT market. Table below compares old model with new model with imperatives that are losing relevance with those that are emerging.

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We are tech companies and tech means cloud which means new business models

We believe that we are all tech companies. Obviously companies like Dell with hardware or Microsoft with software or Cisco with networking products or IBM with services or Salesforce with cloud software or even Apple with consumer electronics are recognized as tech companies that are relevant to the businesses that operate around the world. But this is not the extent of the tech industry.

We may or may not recognize financial institutions as being technology companies but the financial institutions themselves recognize that technology shapes their competitive environment. A recent memo from a senior executive at one of those financial institutions identified not their traditional competitors but Apple Pay as a significant source of future competition.

Automotive industry companies like GM, Ford, and Mercedes are also technology companies. We all recognize Tesla as a technology company because in essence its product is technology with electronics and electric engines. In the 1970s, metal was the single highest value component of a vehicle. In the 80s and 90s, computer hardware became the most valuable component of a vehicle, and today software is the highest value component in a new vehicle. A new vehicle purchased today contains often as much as 100 million lines of software code. For comparison's sake, the Android operating system contains about 15 million lines and Facebook has about 62 million lines of code. So a late model car is equivalent from a coding perspective to Facebook plus Android plus Android again plus a little bit more Android.

The taxi industry, represented by cabs in New York City and Toronto and Mexico City and a tuk tuk from Thailand, has been greatly disrupted by Uber which owns no cars but provides ride services around the world.

This huge opportunity for the creation of new wealth by disrupting existing industries with technology is driving quite a lot of tech innovation throughout the economy. As analyst David Moschella observed in a post entitled 'Dual Disruptions', a firm can be seen by the technology industry either as a valued customer or potential lunch for this Uberfication style of disruption.

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New Belgium Brewing – a midmarket firm managing growth with technology & analytics

Founded by an engineer in 1991, New Belgium Brewing, a midmarket firm with 700 employees, uses technology across its entire business. Automation in engineering is in its DNA and data is at the core of its business success. Technology is pervasive within the organization and is used for manufacturing, quality, sales, operations and even sustainability needs and initiatives. In an interview with Techaisle, Jake Jakel, Technology Solutions manager at New Belgium Brewing said, “Technology is a huge part of what the company does to bring to market its Fat Tire Amber Ale beer. Our entire sales staff relies on data to be at their fingertips when they are out in the field selling our products and brands, and our non-field staff uses data from an analytics standpoint to understand what they are doing right and which areas need attention”.

A key challenge for New Belgium Brewing is managing growth, not only business growth but also corresponding growth of IT staff to support the business. It finds itself frequently caught in the medium sized business conundrum, the in-between phase where it is neither a small business nor a large enterprise. It has many IT personnel who are generalists supporting the business, and is trying to add specialists but is faced with issues such as at what pace should it add the specialists and in what areas should it add first. It is an area which is no different than other growth-oriented mid-market firms. In a Techaisle’s survey, we found that 36% of midmarket businesses have taken steps to address the need for what is sometimes referred to as “double deep” (with respect to IT and business experience) employees by employing IT specialists for the growth and rapid adoption of emerging technologies.

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