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It’s no exaggeration to say that partner programmes have become formulaic to the point of cliché. There are usually three tiers: frequently gold, silver and bronze, sometimes inflated to platinum, gold and silver or even titanium, platinum and gold (in the case of Dell EMC) or elite, premier and (plain) partner.
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These programmes normally include marketing development funds, collateral, portals, training, certifications, lead generation and deal registration. I’ve probably forgotten a few other things but you’re all familiar with programmes enough to fill in the blanks.
Along the way, there have been occasional challenges to the status quo but, if you leave aside those who have advocated going completely direct, there has been nothing too drastic. So my interest was piqued by the emergence of comments by Jan Ursi, Nutanix EMEA director of channel, first articulated in a blog post way back in June this year , claiming the days of the traditional partner programme were coming to an end.
In the blog post, he states that IT vendors “have dictated to their partners how they should run their businesses” for too long with programmes that are “inflexible and prescriptive in nature”. He accuses vendors of “laying down the law as to how a partner should sell, which training and certifications they undergo and how much revenue they must achieve before receiving any form of benefit”.
Which is sort of true, but not completely. After all, if partner programmes were as “prescriptive” and dictatorial about how resellers ran their business, you’d expect channel businesses to be very unhappy at being forced to join them. You might also expect them to vote with their feet and refuse to sign up.
In any case, it’s not entirely unreasonable for a vendor to set some kind of revenue target for partners to expect “any form of benefit”. Partnership requires commitments from both parties. If those requirements are unreasonable, if the targets are too high or the benefits are too small, you can bet the vendor will soon find out about it.
According to Ursi, radical changes in IT technology need to be matched by equally disruptive changes in how vendors deal with the channel. “The emergence of disruptive new technologies and consumption models means the IT industry is transforming too fast, and is now far too complex to believe any vendor inherently “knows” the recipe for making channel partners successful,” he writes.
There’s a ring of truth in that statement but as a representative of one of those “disruptive” vendors, it’s hard not to avoid thinking he has a vested interest in seeing radical changes to how partnership schemes work. In other words: “He would say that, wouldn’t he?”
Ursi believes that partners “need to position themselves to be as competitive as possible in this new disruptive technological environment”. Vendors like Nutanix need to help them transform their business models because “offering a basic, vanilla partner programme with a list of certification requirements, revenue thresholds and marketing obligations just won’t cut it”.
While it’s true that partners need to be as competitive as possible, it’s also true that disruptive technologies, by their nature, require resellers to make more of a commitment and take more of a risk than they have to with more established technologies.
Ursi makes a good point that it would be better if vendors put a custom plan in place driven by the partner “with no jumping through hoops. The partner should be able to let the vendor know what they believe works in terms of marketing activities, funding and benefits to ensure they grow and are as profitable as possible”.
That can work for vendors with a small number of partners (assuming that they’re not going through distribution) but it’s harder to achieve for larger, more mainstream vendors with many resellers on their books. It’s much more difficult for them to follow Ursi’s plan for replacing the traditional top-down partner programme “with a new collaborative approach that puts the channel partner back in the driving seat”.
No one doubts that a collaborative approach is a good idea but just how collaborative does it have to be? Ursi argues in favour of “joint investments, not incentives, with bold pipeline and bookings goals that make the business grow faster at a lower cost of sales”. But this possibly overlooks the fact that resellers are, to some extent, making an investment already by taking a disruptive vendor on board because it means they are taking a gamble on future revenues at the expense of the more tangible returns they might get from an established vendor today.
Not only that, but many disruptive vendors don’t have the marketing development funds or the support resellers would expect from their more established vendors. Let’s not forget the risk involved in convincing a customer to adopt a disruptive technology only to find that the support is not there if something goes wrong or, worse still, the vendor has disappeared. So, it’s a gamble. For every success like Nutanix, there’s a disruptive company that succeeded only in disrupting the business of partners and customers before it failed. And while there’s no more disruptive partner programme than one where the vendor is no longer there, that doesn’t make it a desirable objective.