Changes in the channel – how IT partners and vendors need to adapt together

Trends in the IT marketplace are changing everything for software vendors’ channel partners. Cloud-native SaaS and subscription models are fundamentally altering what clients buy, as well as the role of the partners they buy from.

In line with this, the alliances between IT partners and vendors are changing too. The relationship is becoming less about revenue and more about long term strategy, and engagement is happening at a higher level – in the C-suite.

Vendors are building ecosystems of partners which are aligned on strategic direction. Their ecosystem enablement programs – that span sales, go-to-market, implementation and beyond – are becoming essential to growth.

As a consequence of this growing closeness, operational alignment between vendors and partners is becoming vital. The best vendors are giving partners the tools and resources to become a true extension of their business and focusing on channel process automation to maximize efficiency.

Challenges and opportunities for partners

These changes are bringing both challenges and opportunities for partners. The biggest challenge is having to fundamentally rethink their business. They’re not just systems integrators anymore. The scope of what they do is much broader and more strategic: they’re becoming agents of change and driving the digital transformation of their clients.

Forward-looking partners are going far beyond merely implementing a vendor’s software. They’re helping their clients decide how to implement a range of technologies – like AI, IoT, 5G, augmented reality, and automation – to advance and transform their businesses.

In response to changing revenue streams, partners are having to up their game and focus more on services. They’re becoming thought-leading consultants, using specialist knowledge of a particular industry or business function to add value and develop add-on applications to augment the vendor’s platform.

While revenue profiles of partners are changing, their costs are also reducing, as implementations are getting easier due to low-code/no-code software and the fact that most of an implementation can now be done remotely.

The opportunity for partners which adapt successfully to these changes is to create deeper relationships with their clients, expand into new areas, grow their revenue, and emerge as stronger, more strategic business partners to both vendors and clients.

The vendor is key to the partner’s success

It’s up to vendors to invest in their partner ecosystem, offering programs that set their partners up for success. A good process starts with the vendor asking the partner how they define success and checking that their visions and strategies are aligned. 

Proactive vendors are creating community programs which include their channel partners. Here, partners can listen to the concerns of their clients and add their voice to that of the vendor on how to address client business issues.

The vendor needs to treat the partner as an extension of their business, giving them access to the same enablement as their internal teams. Features that distinguish a great enablement program include:

• Frameworks for understanding the client’s needs and showing how they can be addressed by the vendor’s software and the partner’s services 
• Training and accreditation in integrations, extensions, and development of applets on top of the vendor’s platform to maximize value-add to the client
• Support with ongoing development of the relationship, from renewals and upsells through to quantification of business outcomes and client success stories 

A new definition of partner success

The partners of the future may look very different to the partners of the past, so the basis of evaluation in any tiered partner program needs to evolve. It’s no longer just about revenue and discount tiers.

Partnership structures need to be geared more around achievement of client success, satisfaction, and engagement. Partner competencies need to be fully certified, and tiering should reflect the partner’s investment in joint business development initiatives. 

As the role of partners evolves beyond systems integrators and towards strategic business partners, it will be crucial for vendors to evolve too. As a result, by supporting their partners to become a true extension of their own business, it will be for the benefit of the partner, the vendor, and most importantly, the customer.