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Cloud Raises Partner-Support Questions


By Cary Tengler

In the world of cloud and SaaS computing solutions, where do channel partners go for support? IT VARs historically have worked with their vendors and distributors, while agents have worked with carriers, CLECs, and other voice and data providers. The increasing adoption of cloud-based services is causing IT vendors and service providers alike to rethink the role and investment requirements of partner automation, communication and collaboration tools.

Effective partner automation systems can and should be a competitive differentiator for both vendors and their service provider partners. With any new service, the challenge lies in identifying the key functions and attributes required of such a system. For example, cloud services are sold both directly and through multiple channels (agent/referral, resale and white-label) and many cloud providers offer all of these go-to-market options. And their systems must support the partner engagement that goes along with all of the options.

The inherently multivendor nature of cloud solutions adds further complexity as IT VARs, seeking to maintain or improve their vendor program status, want to ensure they get appropriate revenue credit, MDF and rebates for selling or influencing, e.g. a Cisco- or NetApp-based cloud service.

Partner automation systems for cloud services are a growing challenge and, more and more, it appears that the large service providers are viewed as critical players in solving the puzzle.

In a recent channel research project conducted by Amazon Consulting, 70 percent of IT vendors now consider the large telecom service providers as highly strategic partners, whereas in the past, theyve been treated primarily as a direct customer. These vendors already see most of the leading service providers building and expanding their own channel programs and in many cases are supporting the carriers efforts with program support and marketing and sales development funds. In return, the IT vendors are looking to access the service providers end-users and existing partners and, as importantly, to leverage the back-office, billing, provisioning, support and contract management systems, which are important in delivering cloud services.

This automation deficit shifts the focus even more to the service providers, who, ironically, often have limited partnering DNA and systems support beyond the basic program offerings of agent fees and wholesale discounting.  Several companies, however, are making the requisite investments to turn this industry shortfall into a strategic and competitive advantage.

If the national and global service providers are going to differentiate themselves as the new wholesalers of cloud services and overcome their perception as partnering novices, they will need to expand their current automation systems to keep both their IT vendor stakeholders and new downstream channel partners happy. Key areas for investment include:

  • Flexible transactional models allowing solution providers to vary their engagement model (agent, reseller, white-labler) from deal to deal, or at least end-user to end-user
  • The ability to offer tightly executed promotional campaigns for various combinations of services (e.g. VPN + VoIP + a SaaS application) through their channel partners or to test the configuration and price-point of new B2B services before general availability
  • The ability to quickly onboard new partners with streamlined online sales and technical tools and accessible, low-cost training
  • API-level support that enables communication and linkage with other cloud ecosystem partners, including IT vendors like Cisco, HP, NetApp, IBM and potentially distributors like Ingram Micro, Tech Data and Synnex

The increasing important role being played by the service providers creates an inherent risk for the IT vendor community. In turning over the automation” reins to the service provider for partner engagement, enablement and ongoing relationship management, the IT vendors can be disenfranchised from the end-user and channel partner and in a subordinate position in the overall solutions equation. 

Therefore, savvy IT vendors and solution providers will be smart to evaluate service provider partnerships based on criteria that extends beyond the carriers current brand strength and service pricing. The mark of a truly channel-centric” organization extends deep into its infrastructure and systems and its ability to support holistic partnering (across sales, marketing, technical and professional services) for the long haul.

Partner automation systems arent the end-all to powering a successful partnership. However, if designed and implemented well, they can provide a competitive partnering advantage for service providers; facilitating strong IT vendor ties and encouraging better engagement and higher sales from the traditional on-premises” solution providers.

Cary Tengler is the director of client services at Amazon Consulting and serves as an Advisory Board member for Channel Partners. He can be reached at ctengler@amazonconsulting.com. For more details on Amazon Consultings channel research focused on service provider/vendor relationships, go to www.amazonconsulting.com/fs/TelecomeBook.pdf.


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