The Ultimate Handoff in Getting Cloud-Ready

The passing of the baton from vendor to solution provider around effective and profitable professional services delivery is what we call the “last mile of being a channel-centric company." It’s hard stuff. And it calls into focus the intentions and revenue goals of the vendor’s direct delivery of professional services. We see 2012 as a turning-point year in vendors getting this issue right, and striking the balance between how to share IP and learning from their own large-account engagements without interfering with the partners’ own unique and often multi-vendor solution approach. 

And there’s a lot at stake in professional services execution this year. Customers are demanding their suppliers and solution providers understand their technical and business pain points and understand their core business process better than ever. Plus, many agree that success with virtualization and other application-integration, professional-services projects paves the way toward solution providers building a successful cloud practice. 

In our 6^th Annual State of Partnering Study, we saw some definitely maturity in the teamwork between vendors and their channel partners around services delivery. Here’s what we see as their top priorities in the area of professional services for each group in 2012:

One of the bigger issues for solution providers in the past has been clarity in the engagement models with the vendor around services delivery. Defining “who does what" in facing the ultimate customer can be a complicated but absolutely critical discussion as these recurring services become more common and diversified. Increasingly, vendors have moved up the customer pyramid and reserved their best architects and delivery staff on their biggest and most strategic accounts. They’ve also published more formal and clear rules of engagement to smooth their relationships in the field with their service-delivery partners. One notable example here was Cisco’s recent release of its Services Rules of Engagement, which covers everything from what services flow through the channel to processes for resolving conflicts between Cisco and its partners.

And by the vendors’ and solution providers’ own assessments, their conflict with each other is decreasing. It was not noted by solution providers as any meaningful impediment to investment or profitability in professional services practices for 2012.

Vendors did indicate their top priorities for partner skill development in the area of doing effective pre-sales assessments. Some of this is being addressed through the vendor community’s increased focus on field-level services mentoring and sharing of services intellectual property much more openly with partners. At VMware’s Partner Exchange event this week, virtualization solution providers were very favorable around VMware’s open sharing of IP in the form of their Solutions Enablement Toolkits (SETS). Many I spoke with indicated how it has helped their practice structure and accelerated their ability to drive incremental virtualization-services revenue.

But, why is effective professional-services delivery not a bigger priority for vendors in their performance expectations of their partners? Why aren’t enablement and training higher on the list of overall skills development priorities as well? Do partners not need or want vendors’ help – or is there still too much vendor direct conflict?

We think there are three camps of partners on this issue. The first are large, national solution providers who already have sophisticated P.S. practices built around best-of-breed products from multiple vendors and frankly don’t want the interference from any one vendor in their services approach. The second group is the larger regional providers with enough cash flow to invest and who are a bit more supplier-dependent on practice-development assistance. This is the prime target for vendors wanting to influence their partners’ services practice structure. The third group is small, regional VARs who may not have the resources to invest in new methodologies, staff or technology to build out a new services practice. They need to differentiate and build a stronger services revenue stream, but they don’t have the capital to pull it off.

In three to five years, what is a professional service versus what’s a cloud service will be a lot harder to distinguish. Partners’ biggest value-add will be their ability to do great pre-sales work and thereby understand the customers' overall IT architecture and pain points better than any one of their competitors (or vendors) can. Mature professional-service offerings will directly impact their ability to succeed in that way, especially in today’s cloud-focused markets. We think this is especially true in that a lot of the solution providers from group No. 2 and No. 3 mentioned above (based on our 2012 data) are taking a wait-and-see attitude toward building cloud offerings in 2012. Contrary to industry hype, over 50 percent said they are not likely to start offering cloud services this year.

Vendors are smart to keep all engagement models open and share as much IP to ready, willing (and well-capitalized) partners as possible. As we move more directly to cloud, vendors recognize that the stronger the partners’ existing services practices, the more likely they will be to build a viable practice around the cloud – whether that be at the pure IaaS level or whether they move over into SaaS application delivery. 

Interested in hearing more about the solution provider-focused results from the 2012 State of Partnering study? Sign up for our free Webinar on Feb. 23 here. For more information on PartnerPath, visit us at www.partner-path.com.

Beth Vanni is vice president of PartnerPath (formerly Amazon Consulting) and can be reached at bvanni@partner-path.com.