Canalys: The spotlight falls on partner programmes

A recurring theme at this week’s EMEA Canalys Channel Forum was the changes that are being made to partner programmes across the industry.

Microsoft has gained the most headlines for its programme changes, but the decision to move rewards away from transactions and instead towards adding value to the customer lifecycle is being replicated across the channel.

Rachel Brindley, senior research director at Omdia, said a significant shift was taking place in the design and purpose of partner programmes as traditional revenue thresholds and rebate structures are being overtaken by a more complex landscape.

“As the complexity of the industry is changing, the role of the partner programme is also changing. We are seeing a rapid shift as programmes move beyond the point of transaction,” she added. “Our research now shows that there are over 400 programmes that are no longer purely transactional. A new paradigm has emerged.”

The points-based approach that is heavily reliant on gaining specialisations, demonstrating support of the customer through the product or service lifecycle, is now becoming the norm.

Brindley said the shift was concerning partners, who worried about their profitability, but many recognised they had no choice but to adapt to maintain the business.

“It’s also driving a fundamental shift in the relationship between vendors and partners. Long-held loyalties are becoming more afraid as those incentives shift, those relationships change, and the balance of power between vendor and partner is disrupted, said Brindley.

“We’re seeing programme changes place a greater emphasis on a smaller group of larger partners with more specialisations and more skills. The longer tail of SMB partners has always been managed by distribution, and it’s getting longer, and with AI [artificial intelligence], we will expect to see more of that through programme automation. Recognition within the programme must also be shifting,” she added.

The Canalys event also saw senior Microsoft executives quizzed directly on the strategy behind its partner programme changes.

Allison West Hughes, corporate vice-president of global SMB at Microsoft, said the company had made changes to adapt to the demands of its customers and was shifting its rewards to recognise specialisations and involvement with initiatives such as its marketplace offering.

“Our customers’ expectations of Microsoft sellers and our community have changed. They want deeper expertise, they want relevance, and they want success after implementation and after purchase. We have redesigned our partner programme to better embrace partners that provide that depth of expertise that mirrors the transformation we’re going through internally,” she said.

Speaking on a panel focused on partner programmes, Elizabeth De Dobbeleer, senior vice-president of the partner programme at Cisco, said that even aside from the changing demands of customers, most partner programmes had increased in complexity and needed to evolve.

“We have to change for many reasons, with market reasons the main driver. At the heart of all the peer or competitive programme changes is what’s happening in the market and what our customers are asking for. So, the customer is really at the centre. That’s the first thing. The second thing is the alignment between what’s happening with our salesforce and the way we are working with our partners,” she said.

Hanne Sjøeberg, vice-president of channels in the secure power division, Europe, at Schneider Electric, said it had also seen the evolution in the approach vendors are taking.

“We are seeing our partner programmes moving from being purely transactional, historically, to being more focused on value, so really rewarding the value that our partners are bringing into the full customer journey,” she said.

“We have a wide, diverse number of partner roles, so we’re really trying now to see how we can [take] the traditional IT solution partner programme that we’ve had for many years … and combine it, or integrate it, with our broader Schneider Electric EcoXpert partner programme, where the partners have deeper technical knowledge,” added Sjøeberg.

“We want to make sure our partners can access each other and connect with each other to co-collaborate and co-create together. And we really want to reward that, because we see that nobody is working alone,” she said.

From a partner point of view, Gill Holloway, EMEA vice-president of partnerships at Insight, said all the vendors were changing their programmes and there was recognition that value had to be demonstrated to be successful.

“All of the vendors have either changed their programmes or are talking about changing their programmes, because the way they’re monetising their businesses themselves is changing,” she said.

“We all have to acknowledge and accept that the pace of change continues to accelerate, and therefore we have to continue to accelerate with it. We understand that they want to ensure that we are delivering the value that our marketing veneer suggests we will when we engage with the client, because the selling of the volume of the past does not deliver the value of the future for the client,” Holloway added.

“For me, whatever changes vendors bring to the table, if we can connect the dots to the value to the client, that then pays us more money, I’m good with that,” she said.

Brindley said Canalys had been tracking the channel’s response to partner programme changes, and that many were taking the approach seen by Insight and moving to meet the changing requirements.

“We return to that fundamental role that programmes play – it is a numbers game. How do you help your partners remain profitable? How does it reward the right activities across the lifecycle? And what is the services multiplying opportunity for the partner? How easy is it to do business together? And how you grow mutually beneficial relationships?” she concluded.