New research has emerged that reveals how the traditional partner programme is no longer held with the same regard by the channel partners. Here, Peter Olive, CEO, Vortex 6 discusses the key reasons behind the findings.
The survey by Canalys shows that the percentage of partners that view channel programmes as important when evaluating IT vendor relationships had dropped from 94 per cent in 2016 to just 77 per cent today. In addition, nine percent of the channel firms questioned rated partner programmes as ‘not at all important.’
So what are the main reasons for this? Either a lack of consistency or too many changes to the programmes was the top complaint, the survey found. Complexity in achieving certifications and specialisations was also cited as a sore point by resellers, VARs, MSPs and other channel players.
It is a difficult balance for the vendor to strike. The programmes must reflect the enormous changes occurring in the industry; traditional resale margins are being squeezed, and the channel is having to adapt their business models to the cloud and the new consumption-based services clients are demanding.
This can mean adjusting the traditional revenue thresholds that have been used historically to categorise partners to include more of a focus on training and certification, for example as well as a focus on more annuity based sales.
However, compliance to vendors’ partner programmes can already seem like a complicated and fractured process for the channel, with evidence of some partners leaving thousands of pounds, sometimes up to 50 per cent, in rebates on the table.
This is exacerbated by the shift away from upfront hardware sales to software, cloud and annuity income, which itself is a significant hurdle to a traditional IT supplier. Instead of the customer buying thousands or even millions of pounds worth of hardware upfront, clients are demanding a pay-as-you-go model for their IT consumption.
The benefits of the cloud to the customers are clear but the challenge to the partner to transition to a services-led business can be huge as they struggle to restructure their own sales and compensation models. Plus, rather than rewarding them as they once did for closing a sale, vendors are now increasingly compensating partners on renewal of business and ensuring clients take on all the features associated with a solution.
Canalys says it believes partner programmes will continue to be vital to partners as they are fundamental to how they navigate relationships with vendors. It says, “the huge challenge is to keep programmes simple while our industry embraces complex new technologies,” adding that vendors must invest in stronger digital tools, including integrated automation and AI-enabled capabilities, to help reduce partners’ manual administration work.
Peter added, "this is where we have been helping both resellers and vendors by providing both managed services and partner programme compliance tools to the channel to ensure partners achieve the maximum return from their investment in technology."
Never has the channel been so competitive and had such a tough environment to operate. But as vendors evolve alongside their channel partners, automation such as this will be key to the success of the modern partner programme.