By Frank Eagle, Vice President of Business Development, QTS
Channel veterans know that the adage, “the more things change, the more they stay the same,” is well-applied in most tech markets. And yet, having been on the front lines of the data-center channel for more than 20 years, I believe that this particular market is very different from just a few years ago. The challenges data-center channel partners are facing today are more numerous and complex than at any previous point.
There are several particular pain points being felt within the current data-center channel; some aren’t all that unusual for a technology vertical, but many speak to the incredibly rapid expansion of the data-center market and the pressures that customers are feeling to join the “cloud revolution” sooner rather than later.
In conversations with channel partners and their customers, the most consistent challenges I hear about include:
The gross overpopulation of channel agents. Quite simply, when the data-center industry took off, agents sprouted up like weeds — to the point that the options are overwhelming for potential customers, and the competition within the channel is stifling. For the most part, agents don’t mind some competition, but with so many players vying for only so much business, chasing data-center deals has become as difficult as closing them.
More agents also mean more data is flowing to customer prospects, and with this flood of new information comes the increased risk of confusion, rumors and flat-out deception. The burden is now on the established, long-time data-center agent to ensure that potential customers are getting the straight story on a potential supplier’s suitability and stability, as well as its ability to address specific needs — insights that can only come from experience.
Loss of control = exposure to churn. The cloud has changed everything for channel partners and their customers. Partners who have worked for years with organizations on custom colocation projects are finding those customers moving to public cloud solutions like AWS so that they have greater flexibility, visibility and control. It is now virtually an everyday fight to renew contracts and avoid revenue churn resulting from moves to the public cloud — sometimes driven by their service providers’ lack of a viable cloud offering.
The best way to reduce exposure to churn is to work with providers that can provide both private, single-tenant cloud solutions and managed public cloud services. Vendors that have all of those bases covered, with ownership of their own cloud and not just a series of partnerships, will ultimately provide their partners and customers with the least expensive and easiest path forward to the cloud, and eliminate the excuses customers have to seek an outside solution.
Customers are smarter and more demanding than ever before. Based on both anecdotal evidence and hard data, it’s clear to me that customers are better prepared for data-center sales interactions and have a higher level of education around technology specs, pricing and case studies than any previous era. Customers are increasingly hiring procurement managers or …