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As channel partners and their customers have found to their cost over the years, there is always a lot of hype around disruptive technologies but there are some potentially serious pitfalls too. Frequently, new vendors with potentially disruptive technologies look to the channel to help them gain traction, but set against strong relationships with established vendors and longstanding loyalty from customers, how willing are channel partners to provide an effective route to market for newer technologies?
Mark Hiley, regional channel sales director for UKI&SA at Riverbed Technology, says vendors need to consider how their disruptive technology could affect their resellers’ business. “Because the majority of partners’ business comes from existing customers, they generally appreciate any product or solution that provides an incremental offering on top of their normal business,” he notes.
That makes them “open to disruptive technologies whether it comes from start-ups or established vendors. More established vendors bring more stability and trust with them but ultimately, partners are open and keen to promote disruptive technology when it makes sense to take it to their customer base”. Their enthusiasm can often be heightened “when vendors create and develop marketing programmes to incentivise partners to take their technology out to the field”.
Michael Miller, head of channel sales at Smoothwall, observes that the level of support from channel partners can often depend on the vendor. “If you are a new vendor with a new technology that is market-changing, it can be a struggle to break into partners without first making big waves,” he says. If the technology is only slightly disruptive “it is unlikely to receive much buy-in from partners, especially technology from a vendor that is otherwise unknown”.
It’s up to vendors to demonstrate to potential channel partners “that their technology will radically change the market’s expectations, compelling partners to take a leading role in that change”. Things are easier for vendors that are already well-established in the channel, he argues, because they can take advantage of “the phenomenal force for change partners can bring”.
Alp Kostem, head of channel at Exponential-e, says most partners are supportive and like to see markets evolving and progressing through change, but “there can also sometimes be a barrier if they continue to evangelise older technologies that they feel more comfortable selling. Cloud is the perfect example of this”.
While Kostem views cloud as “the present and future of our industry”, opinion in the channel has polarised between those who are wholly in or wholly out of the cloud. “It is regarded by some as a cannibal of their existing businesses, eating into their margins and recurring revenues, while others see it as the future of ICT and the next big step change to company growth,” he states. “As a cloud vendor, finding the balance between pushing new technologies and alienating those that are hesitant to adopt it is something we will constantly strive to get right.”
It’s also important to remember that users are just as diverse as channel partners and have opinions and approaches that fall on either side of the in or out cloud spectrum.
Astrid Mehrtens, EMEA director of channel & alliances at Cogeco Peer 1, says it’s understandable that resellers might be reluctant to add disruptive technologies to their roster. For example, customers might have “established ways of doing things that they are reluctant to stray from and channel partners may not want to push customers too far from the products and approaches they are comfortable with”. Also, there may be a significant initial outlay required for partners to train teams, invest in new resources and add capabilities to support the new technology.
But the market is changing and partners need to change too. Vendors and resellers are realising the market is going in a new direction. With the shift away from hardware towards cloud-based models, “channel partners are waking up to the need to develop offerings around cloud and other disruptive technologies to stay competitive”.
Channel partners looking to survive in a rapidly moving market “need to invest in these new technologies and build up competencies in these areas which will allow them to create new vendor offerings”.
She highlights changing attitudes towards purchase models as “another big change forcing companies in the channel to adapt”. Customers are turning away from upfront transactions to consumption-based models which allow them to scale up and down flexibly as needed. “Whatever technology forms part of the offering, in whatever form – on premise, off premise, hybrid – channel partners will need to align their value added services with this in order to keep ahead of the curve,” Mehrtens warns.
Harvey Smith, VMware UK & Ireland strategic partner team manager, says many companies are looking to gain a competitive advantage through technology, so anything that permits them to be more agile and innovative without compromising security will be of interest. “Partners are recognising how the industry is changing and embracing disruptive technology vendors to their benefit, as we have seen at VMware with the rise of the software defined data centre,” he remarks. Those that are unwilling to change “are becoming increasingly irrelevant to their customers. Partners should therefore position themselves as digital transformation experts to ensure they remain the agents of change, both now and in the future”.
All well and good, but Dave Stanley, director at Aditinet UK, is not convinced that partners are sho whole-hearted in their embrace of disruptive technologies. “In the main, the channel is not supportive of new and disruptive technologies, not least because the channel is itself a target for disruption,” he remarks. He cites anti-virus as an obvious example. Although it “brings in massive revenues” there are alternatives for the channel to engage with “but this would mean re-educating customers, shifting marketing and investing in new business pipelines. By definition, channel partners are followers and consequently, reluctant to change”.
There are exceptions and Aditinet is “definitely seeing a new generation of aspirational resellers coming into the market” that have “more flexible models, are less risk-averse and open to next generation products as part of their business model”. Stanley says these companies can see the opportunity of disruptive technologies “and have designed businesses that make it easier to sell these. Unfortunately, right now, this new breed of reseller is in the minority. We don’t anticipate massive change here. This will only come through when users demand better, more disruptive technologies”.