The changing face of our business has forced all of us in the channel ecosystem to take another look at our businesses. The market conditions, technology innovations and and the changing expectation of our end customer today drives the dynamics of the channel ecosystem rather than just product innovation.
1.Customer: He is looking for a value based solution offering to ensure a better way to manage his heterogeneous & complex technology environment.
2.Partner: These are the front runners in promoting technology based solutions which help resolve complex business problems
3.Distributor: More and more, it seems that the distributor is fast becoming an extension to the vendor’s channel team and enabling faster reach to market
4.Vendor: These are the tech generators, the solution creators, the ones whose solution is promoted by the distributor, enabled by the partner and bought by the customer
Value is a term of an era gone by. The Channel requires More Value
More Value ? It means a multi- pronged approach to connect the dots that define the needs of the channel ecosystem to make the entire channel more profitable for all its players. Encourage customers to adopt new technologies, new services attached to those technologies and financial models that these innovations bring to the fore. Use the channel capabilities to provide to the end customers deeper portfolio of vendor products and its product alliances.The market did. The channel ecosystem responded to align itself. Distys have always offered recruiting and marketing services, to attract VARs to a vendor and help them sell vendor offerings, but that’s not enough; now Distys get that they have to recruit, enable and ramp VARs (in partnership with vendors) to create a win/win/win. The BOTTOM line is that if a disty can’t show a VAR how a particular vendor offering will help them grow their TOP line, the VAD value prop falls apart! Vendors started to see VADs as managers or co-managers of their extended channel. Companies like Cisco are now looking to distributors to manage a part of their SP/VAR channel. What changed? This role is in contrast to the distributors prior role as a wholesaler of the vendors’ products where the vendor still ‘owned’ the channel relationship.
Distributors realized that they need to align their business models more closely with their tech vendors. This means that they need to help vendors enable, on-board, and create demand for channel partners through value added services vs. relying on back end sell through.
VAR’s have struggled alone to create the value proposition for their customers with little or no support from the rest of the ecosystem. Vendors need to design the DNA of their channel programs FIRST and then look to distributors to execute against that blueprint.
Its fine for distributors to be active partners in the creation of the DNA, but vendors still fall prey to fantasy that distys actually know what the vendors Go-To-Market and channel strategy should be and that if the vendor gives the disty its products, magically, VAR sell through will result. This fantastical thinking leads to disastrous results, because as good as a VAD is at the foundations of channel building, each vendor has a unique Go-To-Market and channel strategy that has to be clearly defined BEFORE a VAD can engage successfully with the vendor.
VADs execute pieces and parts of this machinery, but lack the right multi-vendor engagement models and a mass customizable back end to scale their VARs’ pipelinesThe design of a channel management system that enables value-added channel to successfully sell customized solutions to end users is an important strategic decision for vendors
VADs need to create a more compelling demand generation foundation that vendors and SP/VARs can leverage. Ultimately, VADs need to help VARs build demand around multi-vendor offerings that combine a group of non-competing vendors .
While volume-based incentive systems are popular, it is not clear that this compensation structure is appropriate for the VAR channel Vendors need to adopt a different metrics of incentivization for their value channel