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Why do Channels Matter to Alliance Managers?

Posted By Norma Watenpaugh, CSAP | Phoenix Consulting Group, LLC | CEO & Founding Principal, Wednesday, May 18, 2016

Today, increasingly channels are becoming the preferred route to market for technology alliances with new models of converged architectures, such as cloud computing and big data analytics. As a result, each alliance relationship needs to redefine the sales engagement models that make sense. One partner can be a route-to-market for the other or they can meet in the channel or they can take the traditional influence channel model and collaborate on joint selling.  More often than not, it’s a combination of all of the above.  

What we have seen in the 2013 Go-to-Market Alliances Research is not only are alliances employing multiple routes to market: channels, OEM and co-sale, but the top performing alliances are more heavily invested in an indirect route vs. relying on just joint sales for revenue. This is an ongoing trend with 65% of alliances choosing direct sales in our previous 2010 survey. Given what we are hearing in the industry today, we would expect to see even more business shift to the channel were we to conduct this survey again in 2016.

What this implies is that it is not feasible to keep partners neatly siloed and alliance managers need to be as sophisticated about enabling channel sell-thru success as they are in sell-with.  And in this time of technology convergence and business model transformation, alliance managers need to be solidly grounded in what is happening in the channel and how to equip channel partners to succeed with alliance offers.

 What do alliance managers need to know about channel sales? 

Well it starts with tried and true partner value proposition but viewed through the new lens of “what is the value the channel partner brings to the customer?” What is the value or business proposition that is recognized by the channel partner? What is the value that you, as part of an alliance, recognize? The key principles of success being how do WE create value for customers and how do WE make money all together? That would be the inclusive WE meaning channel partner, your alliance partner, your company and even your customer.

Starting with the customer experience will give alliance managers some perspective on the best route to market, whether direct or with a channel partner. How does your target customer prefer to buy? Do they work with local heroes to recommend and implement your proposed alliance offer or do they rely on global system integrators to act in the trusted advisor role? With the confusing array of converging technologies and digital transformation, going to market through a channel partner that acts as a trusted advisor makes sense. Your channel partner absorbs the complexity and connects technology features to business relevancy for the customer. One channel marketing professional raved about her favorite VAR. They specialized in the Health Spas. They knew everything about the business of operating Spas and could help Spa owners and operators with turnkey technology that would create better experiences for spa customers. And in her words “They were making a killing!”

Another building block of success in understanding how to go to market through channel partners is understanding the driving economic model for the channel. Gone are the days when VARs could make a tidy living on resale margin. Cloud solutions are putting even more pressure on the channel as the cloud margins are even thinner and recognized as monthly recurring revenue. The survivors are developing new skills, new services, and IP, such as API extensions to create complementary revenue streams. In other words, your joint offer may have just become the razor.  Savvy alliance managers will examine the profit model around their joint offer for the channel, being mindful that they need to compete for the best channel partners. 

Understanding the channel partner economic model, gives you insight into how to enable profitability for those partners and you have to do that at scale. You will need many channel partners who are capable of selling, marketing, provisioning, implementing, configuring and supporting your offer. This means working with your channel organizations to build the enablement program that supports not only the joint offer, but also those new revenue streams.

Yes, there are many moving parts and lots to think about, but the trend is clear. As technology buying shifts to the line of business buyer, it takes a partner in the ecosystem that understands the buyer’s business and has that vital relationship required to sell solutions that build their business.  That partner is a channel partner.   

Author and guest blogger Phoenix Consulting Group CEO & founding principal Norma Watenpaugh, CSAP was named 2015 Woman of Influence in Silicon Valley and is a seasoned  volunteer leader for ASAP. She is a member of ASAP and her company is an Education Partner Provider to our members. 

Tags:  alliance managers  channel  channel marketing  Channel partner  cloud solutions  Economic model  Education Partner Provider  go-to-market alliance research  Norma Watenpaugh  Phoenix Consulting Group  sell-thru  VAR 

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ASAP Meets in New York City with Technical Advisory Group Members, Announces Growing Support for ISO Standard for Business Collaboration

Posted By John W. DeWitt, Tuesday, September 29, 2015

This week ASAP announced growing support for an International Standards Organization (ISO) standard for business collaboration. The U.S. Technical Advisory Group (TAG)—chaired by ASAP President and CEO Michael Leonetti—met this week in New York City in its role of representing the interests of U.S. organizations in the development of the international standard. In addition to ASAP, U.S. TAG members include representatives from Business Relationship Management Institute, as well as representatives from ASAP member companies including Cisco, Verizon, Phoenix Consulting Group, and PwC.

 

Via ASAP, the U.S. TAG representatives issued a broad invitation for companies to support and adopt the emerging ISO standard for business collaboration—and to get involved in the international effort to develop this unique new standard. Cisco, an ASAP global member, is involved in the effort both as a maker of technologies for business collaboration as well as a company that has spent many years seeking to improve its own ability to collaborate, according to Ron Ricci, Cisco’s TAG representative and the company’s vice president of customer experience services.

 

“At Cisco, we learned that elements such as common vocabulary and shared measures of success, as well as a common meeting system to engage employees, are the keys to driving strategic clarity and transparency—and giving people the freedom to successfully collaborate,” said Ricci, who relates these and other learnings as co-author of The Collaboration Imperative: Executive Strategies for Unlocking Your Organization’s True Potential.

 

This ISO standard for collaboration will be quite different from the typical standard.

 

“Most standards are very cut-and-dried process oriented,” noted TAG member Norma Watenpaugh, CSAP, who is principal of Phoenix Consulting Group and a longtime leader in the ASAP community. “This ISO standard has a unique aspect as a management standard in that it advocates behavioral and cultural support.”

 

In the full press release issued this week by ASAP, Leonetti said, “We invite ASAP members worldwide and other U.S. and international business organizations of all sizes to learn about, support, and adopt the emerging ISO standard for business collaboration.” He also emphasized that the “involvement of ASAP and its members and partners is core to the ASAP mission, which has focused for many years on establishing and propagating a management standard for the alliance management and partnering profession.”

 

Business Relationship Management Institute (BRMI) pursues a mission complementary to ASAP’s mission by focusing on relationships within business organizations.

 

“Internal as well as external business relationships are built on trust and have equal focus on business value,” said Aleksandr Zhuk, co-founder of BRMI and member of the U.S. TAG.

 

Read the complete announcement on the PR Web newswire at http://www.prweb.com/releases/2015/09/prweb12990095.htm

Tags:  Aleksandr Zhuk  BRMI  Business Relationship Management Institute  Cisco  Collaboration  International Standards Organization  Norma Watenpaugh  Phoenix Consulting Group  PwC  Ron Ricci  U.S. Technical Advisory Group  Verizon 

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Q4 Sneak Preview of Strategic Alliance Magazine: Cloudy Days Ahead—The Channel Manager’s Role Becomes Collaborative as High Tech’s ‘Third Platform’ Accelerates Disruption

Posted By John W. DeWitt, Thursday, October 23, 2014

The forthcoming issue of Strategic Alliance Magazine takes an in-depth look at the changing role of the channel manager in today’s high tech industry—a business landscape that can look very much like the 100-foot North Atlantic waves in the movie “The Perfect Storm.”  

 

“Many seasoned channel managers have remarked that while disruptive technologies come and go, they’ve never seen anything quite like this. This disruption goes to the heart of the business model of many technology companies, and those companies and channel managers who don’t adapt are doomed,” writes Norma Watenpaugh, CSAP and principal of Phoenix Consulting Group, in our feature titled “Disrupting the Channel, or: ‘How I Learned to Stop Worrying and Love the Cloud.’”

 

“To succeed, today’s channel executives must become savvy business managers—transitioning to new revenue models, finding new partners, and working collaboratively to understand and serve entirely new groups of customers outside of the information technology (IT) department,” writes Watenpaugh, citing Gartner data documenting “a tectonic shift in IT purchase decision making.” Twelve years ago, spending on IT outside of the IT department was only 20 percent of total technology spending. But by 2019, Gartner says, almost 90 percent of technology will be purchased by business lines, not the IT organization

 

“There are more buyer personas,” explains says Kristina Scott, manager of global channel marketing for Brocade, a data and storage networking company, and corporate member of ASAP. “Customers need the options explained in the language they understand.” Watenpaugh explains, “This means making the translation from technical benefits to business impact. These shifts are leading Brocade and other technology vendors to re-evaluate whether they have the right partners in their channel and what they can offer their current partners to gain new skills.”

 

Channel managers today increasingly must become savvy business managers who understand not just innovative and disruptive technologies, but also adaptive business models. Watenpaugh talks to IDC’s Steve White, program director of the Strategic Alliances Leadership Council at IDC, who says, “There are no rules! And failure doesn’t matter.” Reaction speed does matter, though. “Demand can be gone before you have all the planning done.”

 

Watenpaugh notes that the traditional start-up partnering model was to associate with big brand names to build credibility with customers. “Today, that may be a disadvantage,” according to White. “It is more important to find a likeminded partner with some synergy in the partnering opportunity and just go. Have some success or, if you fail, fail fast and move on.”

 

Learn more in the forthcoming Q4 2014 issue of Strategic Alliance Magazine, available as a free benefit to all ASAP members.

Tags:  Brocade  channel manager  Gartner  IDC  Kristina Scott  Norma Watenpaugh  Phoenix Consulting Group  Steve White  Strategic Alliance Magazine 

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