Usually the reason a person would say they don't want to put their eggs in one basket is purely transactional. Because if somebody came to them and wanted to buy HP but they only sold Lenovo and Acer, then they can't sell HP. But if a customer comes to you with a pain and needs a solution, and you come back with an Acer or Lenovo solution, then it's not the customer driving the brand - they are now relying on you for a solution. And if you are standing behind it with SLAs and contracts, the customers shouldn't care about the "brand". Of course, some customers are an HP or Dell shop, but in those cases partners could partner with other players. I see partner-to-partner collaboration becoming critical as vendors ask their partners to get more specialised and as the channel gets more specialised.
Have you seen much of an increase in partner-to partner relationships so far?
It's slower than I would like. A lot of that has to do with fear - they're going to steal my customer, who's the prime player, what happens if something goes wrong, who owns the relationship, what happens if they do a terrible job. But that happens when it's ad hoc. If you have already established a relationship and negotiated how to work together, the ecosystem is very tight and you have it established before the customer asks you for something.
Is it the vendor's responsibility to develop partner-to-partner relationships?
We're seeing a couple of schools of thought in the US. One is that vendors think they should be the owners of it. I don't disagree - vendors have some responsibility to their partner ecosystem to allow them to find each other. The problem is when it goes outside the vendor's offering, it gets out of the scope. The second thing we see is distribution playing that role. They're agnostic to that technology and sell everybody's stuff, so they can help people find each other across vendors and platforms. The other thing we're seeing is third parties, such as OnForce in the US, that aren't a vendor or distributor, building marketplaces online to put partners together.
Each has a strength and a weakness, but I do think vendors need to make sure their partner ecosystem is more efficient and effective. I think distribution is critical role in finding people for end-to-end solutions. But I like the third party because it isn't really tied to anything. The third-party companies are using an e-Bay-like rating system for all partners based on partner and customer feedback. People are getting rankings based on their quality of service.
How do you see managed services playing a role in the channel community?
With managed services, there are some break/fix partners that have taken an ugly pig and put some lipstick on it. Break/fix is very reactive and we know it's commoditising over time from a pricing perspective. Calling it managed services doesn't automatically make the price go up and it's different to coming up with a repeatable, predictable solution that's proactive. But if you think about what things you could be remotely monitoring for customers to improve their experience with IT, that increases stickiness, is based on a 1-3 year contract and is proactive, that's a different approach.
If you're a little guy, you have to think about how you can go about building that business. You could find a partner, or go to a vendor that's offering managed services that you can resell, or you can go to distribution companies which are increasingly going into managed services.
Is managed services the direction distributors should be headed in then?
I see the distributors becoming more aggregators of solutions: They're pulling a solution together on behalf of a partner to sell to the customer. Ingram in the US has created a platform called Seismic, which puts VARs into the managed services business. It's software-as-a service, proactive monitoring and all those things VARs can't build on their own. They're also managing reseller recruitment, training, certifications, warranty contracts and marketing development funds. Then there's services like asset tagging and custom configuring which they can provide.
What is tomorrow's channel program going to look like?
Vendors definitely have to look at their collective partner population as a powerful entity and ecosystem. Then they can build competencies on which partners are going to address which markets and verticals. It also means they can get smart on recruitment and ensure the ecosystem stays healthy and isn't over distributed. I also think it's about shifting to certifications for competencies and from volume to value programs.
Vendors also have to focus on avoiding channel conflict. Everybody used to focus on direct versus indirect, but that's an old story. When you think about channel to channel - the vendor website, VAR, retailer, direct marketer - all of a sudden you have multiple channels potentially selling to the same customer and there's pricing disparity among your channels. And the days of vendors saying that's product A or product B and they are slightly different are also gone because the channel's too smart for that.
How can a reseller compete against a retailer?
The channel companies that rely disproportionately on the sale of hardware and software won't survive. You shouldn't care where that customer bought that hardware. From a partner perspective, if they're not thinking about how to stay competitive, how to differentiate in the marketplace and stay relevant to their customer in this time of alternative delivery channels, they won't survive. And you have to think about the people entering our world today - they are coming from social networks and completely different paradigms.