**Editor’s Note: Throughout the fourth quarter of 2018, as part of our “In Focus” series, we will feature a series of galleries designed to help partners grow their businesses in 2019 and beyond.**
By Kevin Casey
Channel partners navigate the intersection of business and technology each and every day. Suffice it to say, it’s an extraordinarily busy intersection — it always feels like rush hour.
It can be tough in an environment like this to slow down and make sure you’re headed in the right direction. But that’s increasingly a must in order to capitalize on significant changes in business and technology instead of simply succumbing to them. That rush-hour feel is a sign of opportunity, provided you’re positioning your business to take advantage.
Unosquare’s Giancarlo Di Vece
“Today’s rapid-fire growth and shifting of the technological ecosystem continually yields excellent opportunities for nimble MSPs [and other partners] to expand their business,” says Giancarlo Di Vece, president of software development firm Unosquare. “Tech advancement simultaneously presents [partners] that have historically operated under a traditional business model with a new set of challenges.”
Given the choice of “new opportunities” versus “new challenges,” most of us will choose the former over the latter. So it comes down to adopting the right set of business strategies and best practices for doing just that, while solving those inevitable challenges and problems along the way.
We asked Di Vece and other experts for tips and trends on doing just that in the year ahead and beyond. What best practices should channel partners consider? More importantly: Why?
As you explore their expert advice momentarily, you’ll perhaps notice some themes here.
For one, these are ultimately business practices, not tech trends. Channel businesses need to heed some of the same fundamentals as just about any other company: investing in the right people, making smart decisions about growth, and adapting to macro-level shifts in the industry.
It’s also about revisiting some of the fundamentals, such as: Don’t partner with just anyone. Once upon a time, there were fewer choices to make in terms of vendors. Not so today, as new partner programs proliferate, especially in areas like cloud, where vendors from the biggest names to smaller upstarts look to partners to help drive the next phases of their own growth strategies. That doesn’t mean you should just sign on with these programs willy-nilly, though — but we’ll get back to that in a bit.
In the gallery below, we’ll identify nine business best practices partners should be considering as they develop and fine-tune their business goals and strategies for 2019 and beyond. The channel universe has never been more exciting or fast-paced. Are you prepared to keep up?
Kevin Casey writes about technology and business for a wide variety of publications and companies. He won an Azbee Award, given by the American Society of Business Publication Editors, for his InformationWeek.com story, “Are You Too Old for IT?” He’s a former community choice honoree in the Small Business Influencer Awards.
Trend: Double Down on Recruiting and Retaining Talent
Partners are ultimately as much people businesses as they are technology firms. Hiring the right people is a must, but so is keeping those people around long-term. Taking your team for granted is akin to ignoring emerging technology trends; one day, you simply wake up and realize your business is failing.
“As an MSP, having a talented and diverse team will set you apart from the competition,” Di Vece says. He notes, however, that accomplishing this is no easy feat, especially given a booming job market, employee-retention realities and other factors.
Di Vece and other experts expect recruiting and retention strategies to play an outsized role in separating highly successful partners from the rest of the pack in the near future. Bowing to this challenge isn’t an option.
Jonathan Bohrer, CFO at Abacus Group
, says his firm’s clients expect 100 percent from its team, day in and day out; the firm must make an equal commitment to its people.
“The basics are easy: a fun work environment, good benefits, extras like good coffee and cold beverages in the fridge for Friday afternoons,” Bohrer says. “The rest is more difficult: a career path, upward mobility, and perhaps most important, a voice. All are part of building a positive culture and work environment where everyone is engaged to win together.”
Trend: Be Strategic and Specific in Your Business Growth
Our business culture tends to be obsessed with growth: Year after year, quarter after quarter, everything must grow. It might be tempting in a strong economy to try to grow in any and every direction; smart partners, though, will be more focused in the year ahead.
“MSPs and [other partners] should begin growth planning by identifying an area or two to pursue,” Di Vece says. “Do you want to scale up at volume (you’ll plan to build efficient processes and increase automation) or increase your client base a few at a time (you’ll invest in account management, professional services and support)? Do you want to expand into new geographical markets? Take on more complex clients?”
Di Vece recommends doing your homework, and looking for underserved industry subsets, geographical areas and company sizes or types. Don’t be afraid to make choices.
“Narrow to what is feasible and attractive to supporting your short- and long-term business goals,” Di Vece says. “The inroads to expansion can seem endless, so companies need to debate and decide which path works best for their business model.”
Trend: Automate Manual, Recurring Work as Much as Possible
Speaking of growth, it’s a whole lot easier when you automate as many processes as possible. Your specific automation strategy will of course depend on your business goals, but ignore this technology and business trend at your own peril. It’s going to continue to heat up.
“It's all about automation,” says Jeff Aden, co-founder and EVP at cloud services firm, 2nd Watch
. Channel companies can increase margins by developing or implementing tools that automate routine tasks associated with the delivery and maintenance of cloud-based infrastructure and applications.
Scott Sacket, VP of business development at AvePoint
, advises baking automation into your product and service-delivery pipeline as early as possible, if not from Day 1.
“This way, when you are ready to double down on a service or product, you will already have the tools in place to move fast and grow,” he explains.
Trend: Be Smarter and More Selective in Your Partner Program Strategy
Just because you can sell a product or service, doesn’t mean you should. The same goes true for choosing partner programs. Expect leading partners to be increasingly selective in their vendor programs and relationships going forward, especially as the number of such programs increases in areas like cloud (including infrastructure, SaaS, and more segments of this enormous category).
David Neely, VP of channel at Green House Data
, advises focusing on three key evaluation criteria:
- Contract negotiation: There’s plenty to consider here, but here’s one core area to focus on, according to Neely: “[What] are the goals of the contract and what is the service provider actually trying to drive as behavior? Do they match the spirit of what they’ve verbalized to what’s in the contract?
- Ease of doing business: Dig deep on how easy it is to understand the provider’s products and services, how easy they are to implement, how easy it is to get quotes, statements of work, and so forth. “This can be so easy, yet so many [vendors] make their programs hard to work with,” Neely says.
- Commissions/payments: Watch out for programs with a reputation for slow-paying partners. They shouldn’t be hard to uncover with shop talk; Neely notes that partners tend to have a long-term memory when it comes to this issue.
Trend: Use Discovery Sessions as a High-Value Sales Tool
As channel economics are increasingly dictated by services-led approaches instead of product-led transactions, sales strategies will necessarily evolve, too.
Doug Stephen, leader of the learning and channel divisions at CGS
, expects “discovery sessions” to become an increasingly powerful sales strategy for partners.
“During a conversational Q&A session, you can gain more insight into problems and present a solution in a way that resonates,” Stephen says. “Using discovery sessions for selling allows channel partners to leverage this highly effective process. Learn more about the prospect individually, ask specific questions, present a solution in a way that is individually tailored to that prospect’s goals and, ultimately, conversion rates will surge.”
Trend: Take a 'Land and Expand' Approach to Account Management
There’s all manner of data out there that speak to the value of retaining existing customers rather than merely focusing on signing up new ones. That same principle applies to growing revenues; that doesn’t simply mean adding new accounts, but rather growing existing relationships. Aden at 2nd Watch sees it as an increasingly important strategy for growing the top line.
“Make land-and-expand a priority,” Aden says. “Grow within your current customer base by winning net new deals based on complementary services that demonstrate your firm's unique tech skills [and] capabilities.”
Trend: Stop Trying to Be All Things to All Potential Customers
“No company can be everything for everyone all at once and all the time,” Unosquare’s Di Vece says.
In a crowded field, specialization or a reputation for being the best at something (or some things) – versus pretty good at everything – will be an increasingly competitive advantage.
“It’s virtually impossible for an IT partner to be good at everything; too many products and options exist,” says Sacket from AvePoint. “Instead, stick to your core competencies and experiences, and be the absolute best at them. As a result, you will begin to establish a reputation in your field as an expert.
Mark Salter, VP of worldwide channel sales at SUSE
, points to vertical-industry knowledge as a particular example of expertise. The need for this kind of specialized knowledge is set to grow, especially as cloud vendors go vertical.
“With cloud vendors developing more industry-specific solutions, channel partners must also home in on vertical-industry knowledge to capitalize on these markets,” Salter says.
Trend: Move Away from Transactional Models Toward Services and Outcomes
principal analyst Anurag Agrawal is a big proponent of channel partners evolving from transactional business models – companies still focused selling hardware or other product-led transactions, with services as an afterthought – to leading with services geared around business outcomes. Agrawal spoke with Channel Futures about this
recently, noting it as a fundamental mistake some mature companies make.
He’s not alone. Bohrer at Abacus Group calls it “selling the service value proposition.” Part of this practice is to begin it from within: When you team gets it, they’ll be able to help your clients get it.
Trend: Shift the Vantage Point for Determining Value
Agrawal and Techaisle recognize that the so-called “post-transactional” era for the channel represents a disruptive shift. He wrote a whitepaper, “Channel Imperatives for 2020,”
that includes the 12 points of transformation for partners to consider in a services-led, cloud-centric IT world.
The first point may be the most important, and it overlaps many of the trends and practices included here: Partners need to shift from thinking of value as something added
by the channel to something created
Think about some common, traditional scenarios of how partners “add value:” the addition of memory or storage to a central processor; the installation of software; the implementation of a system at a customer location; and the provision of management services, to borrow Agrawal’s examples.
“Each of these value-adds has an important factor in common — it looks at what the channel does to enhance its own revenue stream or differentiation,” Agrawal wrote. “None looks at the issue from the other direction: In what ways do the products and services delivered create value for the channel’s customer? What is my client able to do differently or faster, or more efficiently in a way that enhances their revenue stream or differentiation? In an era of ‘good enough’ technology, customers are not especially interested in optimizing the performance of their hardware and software widgets — they are focused on improving the performance of their businesses.”