Building the perfect channel
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.