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By Beth Vanni,
Vice President, Amazon Consulting

Specializations programs are now mainstream parts of many vendors’ competency-based
programs.  And, results show a positive
impact to solution providers overall. However, selecting the type of
specialization to invest in is not as easy as choosing between which vendor to
use to print your business cards, or what soft drink brands to stock in your
company refrigerator. There are many facets to consider when deciding whether
to acquire a vertical-industry or technology-specific specialization from one
of your leading suppliers.

In Amazon Consulting’s recent channel study, “How Special are Specializations?,” 400 solution providers and 40
IT vendors were surveyed to gain insights around why channel specialization
programs matter, and which type of specializations both vendors and solution
providers should invest in for the future.

Despite the fact that there’s a high abandonment (57 percent) rate of
solution providers not investing in specializations after reviewing
requirements, we’ve found that it’s still a safe investment bet for most solution
providers looking for future differentiation and revenue impact. When we
compared the vendor’s current specialization program types with the partners’
future investment plans, we found that both groups remain focused on technology
solutions as their primary skills focus.

The word “solutions” though suggests higher value coming
from more multi-product, pre-configured solutions pointed at specific customer
pain points versus just point-product skills. 
Good examples here are Cisco’s borderless network architecture or HP’s
Converged Infrastructure Elite specialization. 
And, in terms of investment priority for vendors and solution providers,
right behind technology skills is service delivery capabilities, followed by vertical
market expertise. We believe services capabilities are critically important for
vendors to view partners more holistically and should be integrated as much as
possible into all specialization structures, rather than stand on their own.

The
current economic environment isn’t very conducive to partners looking favorably
at being overly specialized in their leading suppliers’ offerings. Many want to
keep their options open and sell to the largest available horizontal markets.  That’s why the technology specializations
continue to be so popular., While understandable as an investment strategy in
today’s economy, it doesn’t really advance the idea of specializations as
unique and coveted versus today’s basic product certification programs.

Vertical-industry
specializations are now just coming of age in vendors’ traditional channel
programs. A focus on verticals adds a more distinct differentiation for the traditional
infrastructure-focused technology partner, and helps vendors propel their
success in solving specific business process problems in new markets.  In our opinion, the ability for a solution
provider to bring together sales, technical expertise and services skills, and
apply them to solve specific industry pain points, is the ultimate expression
of partner/vendor success.  IT vendors,
even the largest and most industry-savvy, will only ever invest to a certain
level in industry-specific sales and marketing tactics. Partners have been, and
will continue to be, their entry into these markets.  The top vertical markets that solution
providers were most interested in investing in over the next 18 months included
Healthcare/Medical, High Tech, Education and Banking.

It’s
not one or the other

Specializations
for vertical industry and technology are not mutually exclusive. Rather, one
should feed the other.

We see
that the top three ranked program benefits requested by solution providers
remain fairly consistent throughout our research results.  These include higher financial incentives, specialized
training (sales or technical) and free or preferred technical support. It seems
clear from the research that these benefits are expected by partners of varying
sizes and business models.

So
where should partners place their bets? It depends on your company’s growth
strategy and need for market differentiation. Key considerations will depend on
your financial model and level of sales and technical competition, both within
the markets you’re currently competing and those where you plan to grow. For
example, if you are not already focused around specific industries, gaining
vendor endorsement of vertical competency would be a great place to start.  And, of course, evaluating the short and
long-term impact (especially financially) of the vendor’s core program benefits
can make the decision easy. 

Keep in mind that while partners are looking for profitability and
market differentiation, vendors are looking for competency and credibility with their customers and field teams. The
balance of the two is where the best specialization programs lie.  Here are the attributes we see for a strong
specialization program:

  • Alignment with customer targets and portfolio
    solutions
  • Enrollment is proportionate to the vendors’ breadth
    of partners
  • Advances holistic skills of partner (not just
    technical)
  • Offers distinct and quantifiable benefits to
    partner, especially economic
  • Gives clear direction to vendor direct sales team
    about engagement & support
  • Program is leveraged through vendor marketing
    strategy

So, whether investing in a program to gain vertical market expertise,
service delivery proficiency or technology solution skills, solution providers are
warranted in demanding a high ROI from their specialization status. So, place
your bets. To learn more about Amazon Consulting’s  “How Special are Specializations?” research
study, click here.