Building the skills to thrive in the modern channel

This exclusive ARN Roundtable, held in association with Microsoft, examined some of the top ways partners can adapt to and thrive in today’s cloud-focused channel.
Left to Right: Leon Spencer, ARN; Lisa Stockwell, Arrow ECS ANZ; Brad Clarke, Microsoft; Sarah Symons, Microsoft; Tovia Va’aelua, rhipe; Michael Girdis, Microsoft; Nadia Cameron, IDG Communciations; Doug Henderson, Telstra; Sarah Loiterton, Dicker Data; Darren Tan, Synnex; Lee Welch, Ingram Micro Cloud; Pia Broadley, Tech Data; Adelaida De Foxá Eymar, Microsoft; Paul Randazzo, Microsoft

Left to Right: Leon Spencer, ARN; Lisa Stockwell, Arrow ECS ANZ; Brad Clarke, Microsoft; Sarah Symons, Microsoft; Tovia Va’aelua, rhipe; Michael Girdis, Microsoft; Nadia Cameron, IDG Communciations; Doug Henderson, Telstra; Sarah Loiterton, Dicker Data; Darren Tan, Synnex; Lee Welch, Ingram Micro Cloud; Pia Broadley, Tech Data; Adelaida De Foxá Eymar, Microsoft; Paul Randazzo, Microsoft

In April, analyst firm Gartner predicted that the public cloud services market in Australia was set to grow by 87 per cent over the next three years, hitting $10.3 billion by 2020.

Moreover, in 2018, Australian software-as-a-service (SaaS) providers reaped $2.6 billion in public cloud revenue during 2018, according to IDC.

Clearly, cloud is popular. But with popularity comes a certain amount of commoditisation, which can, and does, put pressure on profit margin potential for some partners.

This is a mounting challenge in the market, and it seems as if it is only going to become more pronounced as time goes by, and as businesses become more reliant on cloud. 

In terms of what can partners do to maintain and create value in a landscape as competitive as today’s cloud services sector, and how can indirect providers, such as distributors, help to enable them, the issue of skills is top of mind. 

While addressing the growing technical skills shortage in the local market is likely to be one of the single most pressing concerns for many partners today, it is also top of mind for distributors and even vendors, as the skills demand within the market for new and emerging technical fields outstrips the supply. 

Fostering the right skills to add value

For Tovia Va’aelua, A/NZ general manager at Rhipe, the skills gap in the local market simply can’t be ignored when considering the challenges partners face in a market awash with new and emerging technology. 

“The elephant in the room is around the skill sets that are available in the market,” Va’aelua said. “And that's not just set a partner level, it's at a customer level.”

From Va’aelua’s perspective, there are a lot of great ideas coming out of the local industry, however the capabilities aren’t always readily available from the typical traditional sources of the types of skills that are needed to implement the technology required to bring those great ideas to life. 

“We're looking for our customers and even our partners, and even ourselves as distributors,” Va’aelua said. “We're looking for talent that doesn't exist.” 

Va’aelua draws upon the example of New Zealand, where it has been noticed by those in the industry noticed that although there may be perhaps 15,000 or more roles available in technology, the country might only have 5,000 graduates to fill them, along with maybe another 5,000 offered via immigration channels. That still leaves a deficit of roughly 5,000.

“And that's not going to change each year,” he said. “That doesn't mean the jobs are filled, we're going to get more and more of these roles, and if that's the gap in New Zealand I can only imagine that the Australian gap is quantums higher.”

Speaking: Tovia Va'aelua, rhipeCredit: Ashley Mar
Speaking: Tovia Va'aelua, rhipe

If top-down initiatives, such as education and government policy, struggle to fill the skills gap, perhaps some of the responsibility falls to industry players themselves to implement formal and informal initiatives aimed at encouraging and fostering relevant skills from within. And this is important: with the right skills, partners can add value and tap into more potential areas of profitability. 

“The pressure comes back on us for that on the job training, the self-paced learning, to make sure that we are putting up strong types of skill-sets to help us to help our customers,” Va’aelua said. 

This is a sentiment that Pia Broadley, director of vendor alliances at Tech Data A/NZ, can get behind. For Broadley, the work that technology organisations can do internally to build relevant skills not only benefits individuals, it also benefits businesses. 

“If every person doesn’t have a plan for their own development...we should have a plan for their [individuals’] own development,” Broadley said, noting that her organisation, Tech Data, has promoted a number of people internally over the past 18 months or so to help them develop and reach their goals. 

“They outlined what they want to do, and we've built out a plan for them; we've done training and enablement to get them skilled up, and we've got coaches to help people develop their skills,” Broadley said. 

Drawing upon the classic example of how, once upon a time, a new salesperson would go out on the road with an experienced hand to learn the trade, Broadley pointed out that the practice of taking newcomers under the more experienced person’s wing and teaching skills in this manner remains a viable and essential method for building capabilities internally. 

“You do it hand in hand every day and they learn from you,” Broadley said. “Not just training, but also watching the way you do things.”

According to Broadley, this is how Tech Data is approaching the issue of skills internally, with the company encouraging the kind of system in which someone wanting to build their skills can partner up with a buddy, someone who has a high level skill-set, to learn from.

But while building skills internally is essential, it is also important not to lose focus on what potential candidates from beyond the confines of the immediate industry can offer an organisation within the industry. This is one way partners, among other channel organisations, can identify and foster new talent.

“When we recruit, we recruit from outside the industry as well,” Broadley said. “One of our strongest performers in the last two years is someone who's come from the health industry. She ran a day spa, had fantastic customer service and we brought her into the business.

“She's now become so skilled within our business that we promoted her to product operations. And so I think it's on all of us to have the responsibility to help our people get to where they want to end and with technology as a pathway,” she said. 

While fostering skills internally and from outside of the tech industry can address the skills shortage that's holding partners back from tapping into additional -- and potentially more profitable -- services, Microsoft partner development director Michael Girdis suggests that there are parts of the market still not fully leveraged.

“In the tech industry, we don't access the whole market. We don't tend to access the market for deep technical skills in gender,” Girdis said. “We don't seem to access the market in accessibility, actually. So, that's a society issue.”

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Citing programs being run by Microsoft Australia as examples, Girdis pointed out that programs specifically designed to circumvent the skills gap by tapping into those areas of the market that have, historically, been overlooked, new sources of skills could emerge.  

“But there's got to be a lot done in terms of national policy to solve some of those issues that were active in those areas,” he said.

Part of the work involved in addressing the skills gaps begins with the identification of those required, which is sometimes easier said than done.

There are many partners, according to Broadley, that have a very good understanding of their offerings. For these partners, they know what to do with the product stack within which they specialise. As such, they know where their skills lie and they're very focused on what they do, so they have the right marketing and a go-to-market strategy that works. 

For others, however, the situation is not as clear. This is where indirect providers and distributors such as Tech Data can play a role by stepping in and helping partners to identify the areas where they are strong in terms of skills and those where they need more work.

“What we do is we help identify what their what their skills are currently,” Broadley said. “There's a skill shortage in the channel...specifically around cloud and security.

"And when a partner has a certain amount of skill, they need to work out what's the next step? How do they go from the skills that they've currently got the base level? How do they get to the next level?" 

“For us, that's a cloud practice building process. How do we take them where they are today, identify where their skills, work out what the next stage is for them and build them up so that they can become truly cloud ready, if cloud is the area that they're going to focus on?,” he added. 

For Broadley, a big focus is helping to find success for those smaller partners that aren't already fully leveraging the products and services that underpin their offerings. Without the same depth of resources of larger players, smaller players can’t always do it on their own or hire the skills that they need internally. 

“They look to us to be able to get them up-skilled so that they can move up that next level of service, because if they can add services, they can add profitability,” Broadley said.

Leaning into the partner to partner play

Identifying important skills and building them up internally is just one of the ways partners can adapt to, and flourish in, the modern channel. Another way to tap into the skills needed to boost value in a cloud-heavy market is to tap into the skills of others through a partner to partner play. 

According to Arrow ECS ANZ vendor alliance director Lisa Stockwell, the partners that tend to be adapting well to the current climate are those who have an appetite to change and shift their business while also welcoming the support of other partnerships to help them achieve that transition. 

As with Broadley’s assessment of Tech Data’s role in helping partners build the skills they need to flourish, Stockwell suggests that Arrow ECS ANZ has a role to play in helping partners identify and work with other partners that can complement their current skill-set with additional capability. 

“We see our role as helping them target those gaps in whatever those skills are,” Stockwell said. “But also, for partners, there's a whole lot of information out there. And it's difficult for them to navigate that wealth of information, not just in the industry, but from vendors too.

“So, we try to sift through that for them. And once we understand what it is that they are wanting to achieve, we simplify it for them and help them understand how to track down certain areas that they want to address,” Stockwell said.

Speaking: Lisa Stockwelll, Arrow ECS ANZCredit: Ashley Mar
Speaking: Lisa Stockwelll, Arrow ECS ANZ

In fact, the partner to partner strategy (P2P) is already paying dividends for some partners in the local market. The Cloud Collective, an alliance of three Microsoft Gold Partners which, together, provide full-service cloud solutions for end customers, is one such example that sees partners teaming up to build-out their collective offering. 

According to Va’aelua, such partnerships are likely to become much more common as the chronic skills shortage, in combination with rising demand from the market for specialist technology capabilities, puts an increasing amount of strain on the existing skills market in the local region. 

“I think what's going to happen is we have to be prepared for that international P2P play,” Va’aelua said, pointing out that, with the broader Asia region developing tech talent at a decent pace, Australia and New Zealand have a groundswell of skills right on their proverbial doorstep -- if they’re willing to partner across regional borders. 

For Darren Tan, product manager director at Synnex, partner-to-partner activity is on the rise. At the same time, individual partners that narrow their focus on a particular specialisation -- a top way to add value to their offerings -- are also seeing success. 

In some ways, these two factors have the potential to work in support of each other, with partners that are finding success through specialisation still able to bid, in partnership with other partners, for projects that may require a broader palette of skills and capabilities than what they may have internally. 

“What we are seeing is partner to partner engagement, that collaboration is is really helpful,” Tan said. “You know, you've got some partners that are strong in one area, but when they collaborate, they can deliver and deploy different solutions to the market. 

“The other thing is, partners on our side who pick a vertical area, which is where they're successful, when they build IP [intellectual property] around it, that's where they're seeing success,” he said. 

This is where specialisation comes into its own. With the capabilities offered by lateral channel partnerships, channel players have the freedom to delve deep into a particular vertical or product stack and differentiate themselves by leveraging that specialisation which can, in turn, add value and profitability. 

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But as Doug Henderson, head of partner sales at Telstra suggests, any P2P activity should ultimately be in service of end customers, as should indirect provider partnerships in general, as well as specialisation. 

“The trick is in actually taking a partnership and making that valid for the customer in what they need,” Henderson said. “And the partners that are doing that well with us are relevant and valuable; they’re the ones that are really working.”

One way for partners to be there for customers is to put themselves in the customer’s shoes, and look at new technology from a customer’s perspective.

“Technology is moving so fast, and it's so complicated that you just don't know what you don't know, and so the partners that can demystify that and leverage the best in a genuine way are the ones that are really succeeding for us,” he said. 

Making the most of what you’ve got

With the P2P option on the table, partners don’t need to be afraid of specialisation, and can dig down deep into subcategories of verticals or products and services that make sense for them in terms of value and profitability. 

From the perspective of Lee Welch, Ingram Micro A/NZ cloud services director, it is those partners that make a point of developing a concerted focus on their area of specialisation and the articulation of their value proposition that tend to do well. 

“When they do marketing, it's very succinct, it's very targeted,” Welch said of such partners. “So, the pipeline that we get from those partners is much higher quality, the closure rates higher. They also do a very good job at leveraging us [Ingram Micro] and other relationships as well.”

With this in mind, Welch said that partners should in fact become demanding of the distributors they work with and challenge them to ask of them what more they can deliver. Ideally, such an approach should lead to a deeper partnership with the distributor and the vendors.

Speaking: Lee Welch, Ingram MicroCredit: Ashley Mar
Speaking: Lee Welch, Ingram Micro

Moreover, such a relationship can in fact help partners get more out of the product stack they’re working with, simply by engaging on a deep level with their distributors and vendors to unlock untapped potential from the capabilities of those products and services. 

“It’s very well selling one product, but what else is there in the portfolio your providers are giving to you that you can they can take to market?,” Welch said. “And then they [can] drive new lines of business with their customers.”

For partners that don’t have cloud services in any lines of business, now is the time to make sure there is at least some kind of cloud offering in their portfolio, according to Welch.

“They really need to get on board and go to the market with something, at least, because they're getting their business taken from them; their end customers are moving away from them to cloud enabled organisations,” he said.

According to Dicker Data Microsoft business manager Sarah Loiterton, it’s one thing for partners to identify a gap in the market, but quite another to take the steps needed to fill it. In this regard, Loiterton echoes Welch’s sentiment that partners should challenge their distributors to help them with this journey.

“[Partners] might acknowledge that there's a gap in the market, but how they can challenge the the value added distributors or the indirect providers to to really plug their gaps?” Loiterton said. “I still find a lot of our partners think of us as a procurement engine.

“Just as the industry's changing, we need to adapt to help differentiate our value, and so it's about trying to make sure the partners are aware and how we are constantly adapting ourselves as a thought leader for them as well,” she said.

Such steps are often essential to ensuring partners are able to fully realise their full potential for profitability. And, as Brad Clarke, Microsoft partner management lead for MSP and channel sales, suggests, the differentiation offered by leveraging the full potential of a product or services stack through specialisation can be a valuable thing. 

“If I think about the DNA of a partner that is really profitable, they're differentiated in what they take to the market,” Clarke said. “So, whether it's the technology that they rally around, or if they focus on a vertical, there's a level of differentiation that makes them stand out. 

Clarke also backs the idea that P2P plays can make a real impact in terms of differentiation, suggesting that the other key attribute of a successful and profitable partner in today’s channel landscape is that they understand how to partner with other organisations. 

By partnering with other channel players to leverage others’ capabilities, partners can reduce or remove a potential competitive threat by ensuring that they can work with other organisations to deliver end to end solutions to the customers. 

“They [such partners] are focused on skills, both theirs or the customers, and inside their own organisation,” Clarke said. “So they're moving quickly along the technology stack and they can deliver more things.”