By Lawrence M. Walsh, CEO and President, The 2112 Group
The IT channel was built on bits and bytes – businesses that not only understood the technology they were selling, but had the acumen to expand the capabilities of that technology with their organic know-how.
The telephony channel, on the other hand, has a more sales-oriented business model in which the agents and resellers of voice and data connectivity engage in service-level selling. Their skill is writing paper and marshalling the resources needed to fulfill the customer order.
Which model will win in the cloud? Both. Sort of.
Cloud computing products will increasingly be sold based on the strength of a solution provider’s ability to correctly map their customers’ needs to cloud and on-premises resources. This requires deeper engagement in the customer’s environment and a deeper understanding of the customer’s business operations and objectives.
If you think you’ve heard this before, you’re right. The technology and telephony industries have been pushing consultative selling to the channel for years. From a vendor perspective, consultative selling will lead to attached sales – or the addition of more single-source products per deal. This leads to higher yields for the vendor and, in theory, the partner.
During a recent Channel Partners Cloud Convergence Council meeting, members took up the issue of consultative selling and go-to-market business models. Telephony agents believe they have the model that best positions them for cloud sales, since they have the experience of identifying services, writing contracts and handing off to other solution providers for fulfillment. IT VARs and solution providers recognize they lack that services-based selling, but argue they can win if they add sales to their existing technology bench. In a sense, IT VARs believe they can create one-stop shops that give customers the best of both worlds.
Neither side is wrong. As has always been the case, business models are like opinions – everyone has one, and their validity is often a matter of situational conditions. In other words, don’t knock it if it works.
What’s becoming clear, though, is that lessons for success in the cloud are emerging from both sides of the channel. IT solution providers recognize that their telephony counterparts have the sales skills and service management experience they lack. Telephony agents understand that their IT brethren have technology depth they lack. Combining the two collective capabilities to produce a new form of consultative selling could produce a powerful new channel business model to address future cloud opportunities.
The Cloud Convergence Council will take up these issues next week at the annual Channel Partners Conference & Expo in Las Vegas. The group of industry thought-leaders will conduct two sessions on trends leading to channel convergence in the cloud and best practices for developing integrated cloud channels.
While the issue of a sales model remains an open debate, the Cloud Convergence Council aims to provide guidance for IT and telephony solution providers on how to work cooperatively in cloud engagements through the dialogue at this conference. There’s certainly more to come on this topic.
Lawrence M. Walsh is CEO and president of The 2112 Group, a technology business advisory service that specializes in optimizing indirect channels and partner relationships, and principle blogger at Channelnomics . He’s also the executive director of the Channel Vanguard Council and moderator of the Channel Partners Cloud Convergence Council . He is the former publisher of Channel Insider and editor of VARBusiness Magazine. You can reach him at email@example.com.
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