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Is having many partners always better?

Microsoft has a sizeable global channel that raises the question of whether that is the model that all vendors should be aspiring to follow

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If you took a representative from each of Microsoft’s more than 400,000 global partners and brought them together in one place, you’d have a population bigger than Cardiff, Belfast, Nottingham or Bradford. And if the vendor meets the prediction made by channel chief Rodney Clark of half a million partners by the end of 2021, a city populated by a single representative from each Microsoft partner would have bypassed the population of Edinburgh, Leeds and Leicester – and be closing in on Manchester and Sheffield.

In terms of partner numbers, Microsoft is something of an outlier. There are few, if any, vendors that have, or need, such a large number of channel partners. But how do vendors know when they have the right number for them? And just as importantly, how can they keep a wide variety of partners happy while getting the best from them and for them?

Claudio Soland, senior vice-president of global alliances, partner programme and business operations at Alcatel-Lucent Enterprise, acknowledges there is a “huge scope to take into account when it comes to partner happiness” because the partner landscape is becoming so much more diverse. There are partners addressing small and medium-sized enterprises (SMEs), value-added distributors (VADs), worldwide alliances partners, service providers and systems integrators, as well as those specialising in verticals such as healthcare, transportation, education, government and hospitality.

In common with all the other vendors, Soland claims Alcatel-Lucent Enterprise’s partner scheme provides the benefits, financial incentives, training programmes and marketing campaigns to help partners be profitable, take advantage of the newest technology and achieve their strategic goals.

“Beyond that, what really makes the difference is a personal touch, the human interface,” he adds. “We have a strong presence in the local markets through our local sales teams, which ensure a strong relationship with our business partners to closely support them in their ongoing business and constantly develop new opportunities.”

The sheer variety of partners is highlighted by Alex Walsh, UK and Ireland manager of channels and alliances at Veeam. “Some are more technically minded, others are better at negotiating competitive commercial packages, and others excel at providing good after-sales service,” he says.

To ensure consistency for customers, Walsh says vendors need “to focus on our role as a supporter and a mediator – connecting different partners together and identifying ways they can collaborate to meet customer needs”.

What makes partners happy?

Along with the large numbers and range of potential partners, it is also a very fluid landscape, notes Rob Billington, channel manager for Europe, the Middle East and Africa (EMEA) at Netwrix. “Most vendors find themselves in a cycle of filtering partners to identify and motivate the ones that can make a difference to the business – this makes for a very fluid partner landscape,” he says.

Vendors need to recognise what partners want in terms of being able to offer professional services, post-sales support and managed services. The key ingredient for happy partners “is very simple”, he says: “Offer them a proposition where they can not only make money, but make profit and feel comfortable in assigning resource to make the relationship worthwhile from both sides.”

George Hope, HPE worldwide head of partner sales, says vendors can level the playing field for partners with varying skill levels, specialisations and expertise by offering “robust learning and enablement programmes”.

Vendor sales teams already have the benefits of solutions, resources and programmes to build skills across sales, technology and marketing. Partners benefit the most when vendors offer them the same opportunities to enhance their skillsets and drive business growth, argues Hope.

“Enablement programmes, especially in high-growth areas like as-a-service, target partners seeking to build out expertise in that area and provide an additional level of advisory to customers,” he says. “For high-volume partners, vendors should focus on demos which keep partners knowledgeable of the latest technologies.”

Illumio’s EMEA senior director of channel sales, Scott Walker, is also a big proponent of enablement. “A well-enabled ecosystem is hands-down the most important factor in keeping partners happy and getting the best from them,” he states. “Aside from that, the responsibility falls on the vendor to be responsible, available and present in all engagements with the partner.”

If a partner has a question or needs additional support, he says, “you have to be available to answer them immediately, otherwise you run the risk of them switching off – much like we as consumers do if we’ve asked a question to a brand or company and get no response”.

He makes the point that it is important for vendors to “be at the forefront of the partner’s mind when they are communicating with their customer base so you stay ahead of the hundreds of other vendors out there competing for the same slice of the market”.

Walker stresses that you need to keep it simple and be sure the partner knows that nothing is too much hassle when it comes to supporting them. “It’s what we hear regularly from our partners as being of the greatest value and why they enjoy working with us – after all, we are all part of the same team,” he says.

John Mitchell, EMEA distribution sales director at Tanium, agrees that enablement is “critical to keeping a wide range of partners happy and to ensure that they’re taking the vendor’s technology to customers at the right time”.

Tanium runs monthly enablement sessions for all channel partners. Deal registration is also crucial. “The partner needs to know, either strategically or ad-hoc, that the vendor will live by and work closely to deliver on the opportunities that a partner brings,” he says.

Graham Jones, UK and Ireland regional director for Exclusive Networks, warns that deal registration needs to be properly thought through and implemented. “Why should a channel partner start to train up already stretched resources, do the demo and invest in kit, only to have the deal switched on price at the last minute?” he asks. “This is where we can help with providing the services early on for those committed partners.”

Points for partner management

Fiona Doak, EMEA director of channel sales at Appgate, makes the point that while vendors frequently use a tiering system to differentiate between partners, it often fails to work “because it drives an unnecessary wedge in the business as you may discount smaller businesses that are more agile and therefore more suitable to your company”.

She believes a successful partner programme means “handpicking the partners based on the necessary skillset and expertise” that can be delivered around the strategy rather than using a one-size-fits-all approach. “This will ensure they support the company as it grows and have the geographical presence required so they become the extension of the company,” says Doak.

“A reputation lives and dies on the partner programme. A succinct, supportive, profitable and inclusive partner programme will ensure partner loyalty and engagement and you’ll therefore be far more likely to succeed”
Fiona Doak, Appgate

She praises Microsoft’s ability to manage 400,000 partners. “It can be tricky managing 20 partners, let alone 400,000, because you have to ensure quality and satisfaction at all times,” she acknowledges. “This industry is close-knit, so when a partnership isn’t working, the industry knows about it.”

Doak suggests a micro-segmentation approach “is an ideal way to manage partners, firstly by region and then qualification – whether you’re an organisation with a massive partner list, or a small one, there needs to be a process and method in place to ensure satisfaction”.

It’s important to get it right, she says, because “a reputation lives and dies on the partner programme. A succinct, supportive, profitable and inclusive partner programme will ensure partner loyalty and engagement and you’ll therefore be far more likely to succeed”.

No pressure then. When it comes to defining partners, Andy Horn, CEO of IntraLAN, thinks there is a danger of focusing too much on revenue, which he describes as “an overstated metric” when gauging the value of partners.

“A new company with a great culture and massive potential, for instance, may struggle to get support from vendors because they haven’t yet accrued enough revenue to be a platinum partner,” he says. “Revenue is obviously an important factor, but it shouldn’t be the only one.”

What’s the magic number?

How many partners to take on board is another matter entirely.

“Partner numbers should always be a consideration – in a tiered programme not everyone can be an elite partner and the size of the community should be decided by the level of business, and the potential to grow that business,” says Netwrix’s Billington.

He claims the vendor does its best to give partners the confidence that it will not oversubscribe the market in any territory. “Resellers are very much our business partners,” says Billington. “Our growth plans are dependent upon having an engaged, trained and motivated partner community, as they are at the heart of everything that we do.”

“Resellers are very much our business partners. Our growth plans are dependent upon having an engaged, trained and motivated partner community, as they are at the heart of everything that we do”
Rob Billington, Netwrix

HPE’s Hope stresses that it’s not about having lots of partners. “The partner ecosystem isn’t strongest or healthiest at its most populous, but when partners are unified across the ecosystem,” he remarks. “Vendors need to be considering the persona of each partner and how they can create robust co-selling opportunities and specialisation pipelines across the ecosystem.”

Francis O’Haire, group technical director at DataSolutions, suggests it’s much harder to get the numbers right than people might think. “I have certainly never seen a vendor keep all of their partners happy when it comes to channel programmes – but some are better than others,” he says, adding that more channel-friendly vendors “respect their partnersrelationship with their customers and run a ‘clean’ channel where there is good collaboration and a mutual trust between the parties”.

Nevertheless, the response varies depending on the size of the partner. “Larger resellers that focus on product and licence fulfilment will typically take on as many established vendors as they can – regardless of the channel size,” he says. “More focused, services-oriented partners will carefully curate their vendor portfolio as they need to invest heavily in maintaining skillsets across these technologies. If there is already a large channel for a vendor, then the decision to invest in that vendor is certainly a more difficult one.”

IntraLAN’s Horn believes that partner numbers “are undoubtedly important when considering what vendors to work with, as it’s an indicator of how intimate the relationship could be and the competition”.

“At a certain point, a vendor can get too big, which means it becomes challenging for channel partners to maximise their own investment,” he says. “The larger the vendor, the better an account manager has to be to oversee everything.”

Horn adds that a partner base can also indicate the quality of the vendor’s services. “It’s important for managed service providers to recognise that their partner relationships can impact their own individual brands. If Microsoft’s services are facing difficulties or the service is lacking, and you sell in those services but lack support from the vendor, it’ll look bad on your business,” he says.

Is there an optimal level for a partner base? Not really, according to Tanium’s Mitchell. “More often than not, there’s not a set ‘optimal level’ for a vendor’s partner base,” he argues. “Partner landscapes are constantly changing based on customer adoption, acquisitions and geographic or portfolio expansions.”

That doesn’t mean you can’t have too many partners. “A telling sign of having too many partners is when a vendor experiences over-saturation in a market and a product sees margin reduction because of too many partners and not enough demand,” adds Mitchell. As a consequence, demand should be managed carefully. “If most, say 80%, of a vendor’s channel revenue is achieved through a manageable level of partners focused on their brand, that’s likely to be close to being optimal.”

Nick Offin, head of sales, marketing and operations at Dynabook Northern Europe, says most vendors won’t limit the number of partners they work with, relying on the tiered system to dictate the level of service they will provide to partners and “ensure an optimal level of service is provided to all channel partners to cater to specific needs”.

Besides, there are benefits to having a wider pool of channel partners, such as raising brand awareness and strengthening the customer base.

Sam Giggle, head of sales at TelcoSwitch, makes an interesting point when he notes that the optimum level could “come down to the number of people the vendor employs across the business to support partners”.

Vendors have to forecast growth carefully and make sure they can cope operationally with increases in business brought about by the growth of channel partners. “Finding highly skilled, capable employees can be a challenge, and so being ahead of the curve operationally mitigates the risk of bottlenecks and poor partner experiences,” says Giggle.

Wayne Gratton, director of business development and marketing at Nuvias Group, argues that for most vendors, an optimal partner base is not a numbers game. “Rather than focusing on the quantity of partners, they should be focusing on the quality of their base,” he says. “To keep pace with fast-changing demands from vendors, partners need to be able to adapt, scale and facilitate vendor needs without compromising on customer experience or the bottom line.”

“Rather than focusing on the quantity of partners, they should be focusing on the quality of their base”
Wayne Gratton, Nuvias Group

Gratton adds that successful vendor and partner relationships “must focus on the breadth and depth of a partner offering, rather than simply looking at its face value for a business’s immediate needs”. 

Garry Veale, UK and Ireland regional director at Vectra AI, believes that sometimes less is more in terms of partner numbers. “It gives you the ability to build deeper, longer-lasting relationships with partners that have the confidence to invest, as there is lower population density of partners compared with your competitors,” he says.

Vendors may need multiple partners of each type and they should definitely keep a weather eye on recruitment, he says, because “the next rockstar partner is definitely out there – but you don't need to sign the world to be successful”.

Unless you’re Microsoft.

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