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'Ecosystems don’t run on spreadsheets' — how vendors are automating channel programs

'Ecosystems don’t run on spreadsheets' — how vendors are automating channel programs

Jay McBain on how vendors have revamped channel programs to cater for an increasingly "trifurcated" landscape

Jay McBain (Forrester) delivers EDGE 2019 keynote

Jay McBain (Forrester) delivers EDGE 2019 keynote

Credit: Christine Wong / IDG

Almost 12 months on from the coronavirus pandemic’s explosion, many world-leading vendors have dramatically re-vamped their partner programs to embrace automation, flexibility and self-service. 

According to Forrester analyst Jay McBain, the COVID-19 pandemic has accelerated the adoption of channel software technology, which helps vendors recruit, onboard, develop, enable, incent, co-sell with, manage, measure, and report on partners. 

McBain claimed Forrester itself helped “dozens” of these vendors adopt “build, sell, and service” programs catering to transacting and non-transacting partners.

On top of this, 2020 was the year that saw Cisco announce it would pursue an entirely subscription/consumption business model, a move accelerated by the pandemic.  

Dell Technologies also announced that all its seven companies would make a similar move, moving a $92 billion into a recurring business, according to McBain. IBM also claimed it would move its storied services business to focus on multi-cloud and hybrid cloud, as well as becoming entirely subscription and consumption-driven. 

Meanwhile, Hewlett Packard Enterprise (HPE), through its three-year journey with GreenLake, will also make the full shift by 2022, Forrester added.

“With the rapidly shifting partner landscape, channel leaders and business-to-business marketers can no longer succeed with manual, human-centric processes or rely on spreadsheets to manage their partner programs,” McBain said. “With the trifurcation of partners into influencer, transactional, and retention categories, managing a plethora of concurrent activities without sufficient automation is no longer possible.”

Credit: Forrester

McBain has long theorised that the “trifurcated” channel model would play a major role in global IT sales. As per his view, this involves the separation of the channel landscape into influencer, transactional and retention categories, meaning managing multiple concurrent activities without sufficient automation is no longer possible. 

According to Forrester, the channel software tech stack from the beginning of 2020 included 18 companies that the analyst categorised as “ecosystem management” tools.

McBain’s research found that these companies drove US$93 million in pure software sales last year. However, the number of these companies has doubled this year to 36 and the revenue has almost doubled to US$173 million, he added. 

In order to manage the vast and complex operation of managing a global partner ecosystem, and the data generated from that, vendors are now able to tap into artificial intelligence and real-time insights. 

The areas of channel automation most likely to play a role in the next 12 months now include partner relationship management (PRM); through-channel marketing automation (TCMA); channel learning and readiness (CLR) and channel incentives management (CIM). Others also include channel data management (CDM); channel marketplaces, financials, pricing, and inventory and channel ecosystem management. 

Ahead of ARN and Reseller News’ virtual EDGE 2020 conference, McBain even claimed that customers are reaching vendor and partner selection without the channel even knowing, meaning partners are missing key ‘moments’ during the purchasing process. 

He added that 68 per cent of technology buyers now adopt a “digital-only journey” from a purchasing standpoint, throwing into serious question the future success rates of traditional channel marketing practices. 

“At Forrester we talk to 690,000 customers every year so we have a strong sense as to what these ‘moments’ look like,” he said at the time. “On average, five different partners are present early in that journey which is the key influencing part before vendor or partner selection occurs. This is the time to help a customer go from almost zero knowledge to the point in which they can make selection.” 


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