Build­ing the per­fect chan­nel

CRN - - EDIT OPINION - ROBERT FALE­TRA Email Robert Fale­tra at rfale­tra@thechan­nel­com­pany.com

Iam just back from our Best of Breed con­fer­ence, where Meg Whit­man, Michael Dell and the in­dus­try’s most elite so­lu­tion providers met to talk about what is im­por­tant and nec­es­sary to drive the mar­ket for­ward over the next 12 months.

For three days, the agenda fo­cused on the chan­nel and push­ing for­ward to­ward a new busi­ness model de­signed to drive cus­tomer en­gage­ment, part­ner prof­itabil­ity and a new way of de­liv­er­ing com­put­ing power to busi­ness.

Michael Dell sat on­stage and talked about how he has set a com­pany goal to be the best part­ner in the busi­ness. Meg Whit­man told part­ners that HP is re­turn­ing to its roots as a prod­uct-driven com­pany with a fo­cus on cus­tomers and part­ners. Mar­gins are be­ing squeezed in ev­ery cat­e­gory of IT and the re­sult­ing pres­sure on the cost of di­rect-sales chan­nels, let alone the need to have a deeper un­der­stand­ing of cus­tomer needs, is push­ing CEOs across the in­dus­try to fo­cus on the in­di­rect sales chan­nel. While Whit­man and Dell may be the most vis­i­ble cham­pi­ons of the need to grow via their chan­nel, they cer­tainly are not alone. But how do these ti­tans build the per­fect chan­nel for the fu­ture?

Build­ing the per­fect chan­nel of the fu­ture is go­ing to be much dif­fer­ent than in the past. Sup­pli­ers, be they ven­dors or dis­trib­u­tors, are mak­ing de­ci­sions as to what their own goto-mar­ket strat­egy is. Will they be cloud sup­pli­ers, en­ablers, bro­kers, or all three? Depend­ing on the strat­egy, how will they man­age the chan­nel con­flict if they choose to be both a sup­plier and an en­abler?

The era of back­end re­bates and other tra­di­tional meth­ods of com­pen­sa­tion for part­ners is chang­ing. As we move from a world of tra­di­tional on-premise sales to hy­brid cloud en­gage­ments and full pub­lic cloud sales, com­pen­sa­tion meth­ods need to change too.

Of course, build­ing the per­fect chan­nel is sub­jec­tive. One per­son’s per­fec­tion is an­other’s abom­i­na­tion. It is al­ways de­pen­dent on where you sit that changes your point of view. But one thing that is cer­tain is that part­ners and sup­pli­ers need to talk more and be will­ing to bend past busi­ness prac­tices.

This is prob­a­bly the most chal­leng­ing is­sue for the CEOs in this in­dus­try that are re­spon­si­ble for shift­ing their businesses. Know­ing what to change in­side of an or­ga­ni­za­tion, be it people, pro­cesses, com­pen­sa­tion or or­ga­ni­za­tional struc­ture, and when to do so, is crit­i­cal and tricky.

In the end, there is no per­fect chan­nel for very long be­cause this mar­ket is con­tin­u­ally chang­ing. But there is a way to get very close to one, and it re­quires CEO lead­er­ship, a sur­round­ing team of loyal ex­ec­u­tives that be­lieve in the goal, and a com­mit­ment to take feed­back from the field and build a busi­ness that is eas­ier to do busi­ness with.

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