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Dell Technologies recently unveiled changes to its channel programme that were designed to provide a “streamlined experience” to partners, whether they were solution providers, cloud service providers, original equipment manufacturer (OEM) partners, or a combination of those categories.
The vendor’s global channel chief, Rola Dagher, said there would be “one incentive structure with consistent rebate rates across regions, and one set of requirements across solution providers, CSPs [cloud service providers] and OEMs”.
The programme seems to be adhering to the KISS (keep it simple, stupid) principle – but making something simple may not be as easy as it first appears.
As Francis O’Haire, group technical director at distributor DataSolutions, points out: “Creating a ‘one-size-fits-all’ programme could put some types of partner at a disadvantage or fail to reward partner commitment and loyalty.”
O’Haire argues that the best schemes “reward partners for helping the vendor achieve its strategic goals as well as its revenue goals”.
David Weeks, senior director for partner experience at N-able, agrees that simplicity isn’t everything. “It’s about making your programmes as clear and accessible as possible,” he says. “It’s not necessarily about keeping everything simple, but rather reducing the barrier to entry.”
In N-able’s experience, for example, a big change to the vendor’s programme “was enabling each partner, no matter where in the world, to have a single point of contact in the business to help them navigate where they need to go”, says Weeks. “It’s a simple change – with a lot of work behind it – but it has made communication with our partners far easier and much more productive.”
David Weeks, N-able
Tim Sergent, partner marketing manager at CyberSmart, says there are pitfalls in opting for simplicity. “At face value, it’s good for partners to find the content they need,” he says. “But a mature partner programme can also include loyalty, rewarding the more engaged partner, hence tiering access to ‘privileged’ content.”
Sergent argues there is a risk that simplifying a partner programme “may lead to relationship damage with partners who may have invested substantial time and resources in attempting to differentiate themselves from other partners”, citing the example of those who have achieved gold level status with certification in a discipline or technology. “Seldom does one size fit all,” he adds.
Sergent warns that this approach can also have unintended consequences in the partner ecosystem. “Given that strategic partners probably receive a degree of bespoke account management, it is that second tier of engaged, up-and-coming partners that I can see gaining the least from programme simplification,” he says. “The obvious danger is that you are alienating what could be your strategic partners of tomorrow.”
As well as partners and vendors, customers also have to be considered when it comes to simplifying partner programmes. Just how simple do customers want their relationship with vendors and partners to be?
Rob Tomlin, vice-president for the UK channel at Dell Technologies, believes customers “are looking to vendors and partners to offer the simplest consumption model that does not try to force-fit anything into their business”, which is why Dell is continuing to provide traditional hardware sales, leasing, Apex and subscription offers.
Following the surge in demand to meet the need for remote working, Tomlin predicts that companies will be faced with the need to re-evaluate their on-premise infrastructure as they return to the office – and to technology that is three or four years old.
“Partners want to meet this demand in a flexible, cloud-like experience,” he says. “We have been working closely with them, asking for feedback and input on Apex and afield to ensure customers are getting exactly what they need from their IT solutions. Our new, simplified channel approach allows partners to focus on the capabilities that set them apart from the competition.”
The role of the channel hasn’t changed, says Tomlin. It is to help customers ensure that their infrastructure needs “meet current demands, but are agile and scalable enough to meet future demands too”. He adds: “For that reason, we are going to keep all consumption models operating simultaneously, but within the streamlined experience unveiled in February.”
Betsy Doughty, vice-president of corporate marketing at Spectra Logic, says there is real value in keeping things simple for customers because the IT procurement process “tends to involve multiple decision-makers within an organisation”.
“It is imperative that vendors make it as easy as possible for channel partners to become trusted advisers to customers by providing personalised guidance, resources, training and services aligned with the specific challenges and needs of each customer,” she points out.
Betsy Doughty, Spectra Logic
According to Doughty, the best vendor channel programmes “deliver a combination of deep IT expertise, a broad suite of solutions, resources and services, and a corporate mindset committed to being as easy as possible to do business with, whatever it takes”.
She adds: “Presenting a simplified and streamlined process to achieve this can make a big difference to the channel/customer relationship and often expedites the decision to purchase.”
Patrick McCue, global vice-president of global partners at GoTo and LastPass, says: “Seamless is a word that comes to mind. Whether engaging with the sales or support organisations of both the vendor and partner, to the customer, they require a seamless interaction and experience. This mindset helps to solidify brand loyalty, recognition and retention. Part of the seamless process requires open communication to address the customer’s needs, which of course is built on listening to their needs and feedback.”
DataSolutions’ O’Haire suggests the desire for simplicity may cause customers dealing with a multitude of vendor and partner relationships to opt for an easy life instead of what is best for them. “Customers are struggling with this and can often settle on a vendor that does most of what they need ‘well enough’,” he says.
“A good channel partner can help them combine best-of-breed technologies while dealing with the complexity of integrating them on the customers’ behalf. Of course, the vendor can also help to simplify this by working to integrate easily with other adjacent technologies.”
The big question, of course, is whether customers would be prepared to pay the same or more to make things simpler, or whether they would expect to pay less when the complexity is reduced.
Dell Technologies’ Tomlin argues that it isn’t quite as clear-cut as that because simplicity in one area is often matched by complexity somewhere else. “While infrastructure managers have been pursuing simpler models and fewer locations, the applications and business use cases are moving in the opposite direction, increasing amounts of data from more devices in more locations, producing more use cases for that data,” he says.
Focus on outcomes
Customers need to take “an outcomes-based point of view on their IT infrastructure requirements” which looks at how they collect and store their data “to unlock its total value, not just the most straightforward or least expensive solution”, says Tomlin.
He claims that the simplified Dell channel programme “will enable partners to position the best solution for their clients” and allow them to “continue to earn consistent, lucrative incentives, regardless of the chosen route to market”.
Spectra Logic’s Doughty is of a similar view. Simplifying the business transaction process “does not lessen the value of the relationship, or goods and/or services provided, but rather increases its value”, she says.
Simplifying the messaging broadens the appeal of the solutions offered, increasing their acceptance and viability with customers, making them easier for VARs to pitch and sell, according to Doughty. “Easier transactions, greater solutions appeal and higher customer satisfaction all add up to greater value. Delivering superior value often justifies a higher charge,” she says.
You wouldn’t expect partners and vendors to advocate being paid less, and McCue at GoTo and LastPass isn’t going to be the one to deviate from that line. If complexity is reduced and the vendor and partner improve the experience, he says, customers might even be inclined to pay more. “An example could be moving from a somewhat limited free application to an upgraded version with more relevant capabilities in today’s cyber security market,” he says. “The saying ‘you get what you pay for’ comes to mind here.”
DataSolutions’ O’Haire says partners should not be paid less because there can be a lot of work involved in simplifying the provision of technology and services. “Making something appear simple often requires significant effort in hiding the actual complexity,” he points out. “Customers will appreciate the apparent simplicity and could be willing to pay a premium compared to a complex and time-consuming alternative.” Admittedly, they might not, but even if they don’t, at least it “gives the vendor a competitive advantage over the competition”, he adds.
Francis O’Haire, DataSolutions
Jim Rose, CEO at CircleCI, agrees that simplicity can often obscure the work partners and vendors have done behind the scenes. “The first thing is to understand what part of your partnership is most important to your customers,” he says. “When you figure out the user and business problems they’re trying to solve and get organised, it creates clarity around the impact of the solutions needed.
“Where do your customers spend the most time? What is under-utilised? Can you move usage in any of those categories? Getting tight on these areas will ensure all parties are meeting where the customer derives the most value.”
Using reliability as an example, Rose observes: “If you look at most status pages out there, it’s really hard to decipher much value out of the vague bars, banners and numbers being displayed. We tend to ‘show our seams’ when really, what is communicated across every touchpoint should be simple, and always through the customer’s lens.”
Scott Riley, founder and director at Cloud Nexus, is a keen supporter of simplifying channel programmes, but thinks vendors still have “an enormous amount of work” to do to simplify their channel programmes. “It’s not just Dell – many vendors don’t really appreciate what it’s like for partners and users,” he says.
Even with something as basic as purchasing, things can be far more complicated than they need to be. It’s not as simple as working with easy-to-understand discounts based on the number of units you buy, for example, says Riley.
“It’s a complicated dance based on knowing exactly which hoops to jump through, when to register a deal, exactly what words to say to the partner account manager and which funding pots are available at any specific stage of the vendor’s financial year,” he adds.
Things change all the time. Incentives and discounts come and go. Discounts may have to be used within the quarter, otherwise they expire. “It’s a complicated mess of trying to incentivise the partner to sell more units, but ultimately, it means every partner has to have an in-house person who understands all the different funding options and schemes available across all their vendors,” says Riley.
Things aren’t helped by staff rotation at the vendor level, where account managers “shift roles every 12 months”, which often means they are “totally unaware of the schemes available, so your in-house person is educating the vendor rep on what to do”, he adds.
Riley is happy to share his direct experience of the financial impact of this unnecessary complexity. Cloud Nexus purchased £500,000 worth of server hardware through a particular vendor and was assured it had the maximum discounts and incentives available for the deal. “When we spoke to another distributor, they had knowledge of other pots of funding, different incentives, arrangements and contacts,” he says. “In the end, we paid £360,000 instead of £500,000.”
No wonder Riley describes dealing with vendors as feeling “like a dark art”. He adds: “I would genuinely appreciate a streamlined and transparent process for pricing, incentives and deals which exists across all layers of distribution. I would genuinely love to see Dell adopt the KISS approach across all streams. Make it a level playing field with clear boundaries, targets, discount ranges and partner status accreditations. Make it easier for partners to transact and feel confident that they have the best price possible and they will ship more units to the users.”
In the end, it’s the customer that could be most affected by complexity, says Riley. “Customers want a simple purchasing experience, but often, the IT provider struggles to get the best answer out of its distributor or vendor, causing speed bumps in the entire purchase process.”
Which leaves us with the one question concerning “keep it simple, stupid” that no one seems too keen to answer: how do vendors make sure they can keep things simple without making someone stupid?