|Creating Business Value|
A Channel Partners blog by VIRGO CEO John Siefert and other industry thought leaders on understanding, articulating and delivering on the strategic business value of technology in the indirect channel.
The Business Value of Technology and Services
By John Siefert
For about two decades I have worked in and around the technology and services category. I have seen the hype and ambiguity swell around the biggest IT and service innovations the category could muster, and I have seen technology professionals and the channel that sells to them, take a big bite of the hype and shift their businesses (and marketing) almost overnight to climb aboard the newest thing. Back in the ‘90s it was client-server computing, in the 2000s it was the Web 2.0 transformation and today it is all around cloud computing.
Here is 20 years' worth of experience in the form of advice: No matter what the new thing, it will become irrelevant unless it adds business value to an organization — oh, and so will you.
IT professionals and the channel serving them have to question how much of this new cloud thing is marketing vs. actual new solutions and architectural approaches to achieving business goals. Further, if something is literally “new," what makes it worth the time, energy and effort of deploying and utilizing it? If it is just repackaged legacy technology or services to lever the buzz in the industry, is that being done within the context of what a company is truly trying to achieve with their IT and services strategy, or is it just catchy words surrounding an old school approach?
At the Channel Partners Fall Conference & Expo earlier this month, I had a ton of meetings with IT and telecom services channel partners, along with a host of vendors that are bringing some of these solutions to market. In all cases, questions and answers about “cloud" were the rage.
From channel partners themselves I heard: Should the channel be selling it? What defines a cloud solution? How should the channel position it with their customers? What is the difference between hosted voice and cloud-based voice? How does the channel make money on it?
From the vendors bringing the solutions to market I heard: Should I sell this through traditional VARs or telecom agents or both? Is there a market for cloud solutions at the mid-tier of the enterprise? Should this be sold by direct sales teams due to the complexity of the sale? How do I position its value at the channel and end-user levels? How do I differentiate myself from everyone else in this space?
I like to break these things down to their most basic essence by asking the simplest question: Are your customers asking for it to drive value at their business? I think the answer is yes, but it means that the channel – and the vendors selling through them – need to change their language and focus on business value, not just price.
Business value — the premise seems pretty simple: If I am an SMB or an enterprise, how can I judge the business value of using an IT service or solution to gain an advantage for my company? The reality is significantly more complex and includes issues like total cost of ownership (TCO), return on investment (ROI), time to deployment, training, business-process shifts, security and data protection, communications strategy, leveraging an installed technology and more. That said, this shift in language for the channel has to include a discussion with customers that goes well beyond how much money the customer can save with their service and toward the business value enabled by the solutions they are bringing to their customers’ businesses.
This, in turn, means that channel managers need to evolve the management of their indirect sales channel. It is no longer about technology for technology’s sake or promises to lower the customer’s phone bill; it is about helping them optimize their customer’s business process by harnessing the power of an always on, on-demand infrastructure to enable customers access to the systems they need, when they need them. Further, it is an analysis of how their existing investments in on-premises systems (e.g. switches, servers, apps and more) can be used to scale via the addition of cloud delivery that extends the availability of data while protecting the integrity of said data through defense-in-depth architectural approaches.
This is a new language for many channel partners and the channel managers from the vendors they sell for. Can they evolve and do this? I believe they can, but it will only happen if all sides of the equation are willing to commit to it. That commitment includes understanding the needs of the end-businesses using these solutions and speaking in their terms about the impact these solutions will have.
After spending a week with our readers and attendees – those Channel Partners putting their efforts toward this goal – I think there is great promise for the space; however, the end result in my mind is pretty easy math: If the channel is not leading with the business value of the technology and services they are bringing to market, they will perish.
John Siefert is CEO of VIRGO, the publisher of Channel Partners.