IT vendor ecosystems used to be simple things. Big vendors attracted lots of partners among smaller vendors and service providers.
But the traditional order has been upset by the cloud and the arrival of consumption-oriented models that favor monthly subscriptions over one-time fees for software and even hardware. This means that IT vendors must change gears if they hope to form more worthwhile partnerships and engage a wider sphere of their potential audience.
Here we’ll discuss some of the ways they can do that.
The Traditional Channel Model
The time-honored way of establishing and running a sales channel through service providers is to focus on how the money changes hands.
Vendors would analyze the market and then work out their strategy in a top-down approach by viewing the business in terms of overall revenue streams – how much of that business is indirect from very large partners like CDW, how much is through distribution channels such as Ingram Micro, and how much is sold through the broader channel of managed service providers (MSPs). The vendors then commit resources accordingly, market to the various segments, and individually approach key partners and outlets.
For IT vendors eager to get onto those channels, it can take anywhere from six to 12 months to get accepted by large partners and distributors.
“Most get the top-down part right,” said Jay McBain, a channel analyst at Canalys. “It is the bottom-up part that almost every vendor gets wrong.”
The Bottom-Up Channel Model
IT vendors have gotten used to having a few specific sources to address to get their wares distributed. But an explosion in the number of MSPs (Canalys estimates there are now 75,000) makes the top-down approach unfeasible.
Most of these MSPs are small and almost all personnel are actively working on service delivery. They don’t have spare time to spend on vendor relations. They are unlikely to answer calls even if prospective IT vendors take the time to try to contact all relevant MSPs.
How do you reach them then? Locate the right watering holes. These include magazines, websites, events, associations, social groups, podcasts, webinars, and dozens of other places where people gather or interact.
The bottom-up approach, then, is a community play. Good examples are Datto, which has a thriving community and was just acquired by Kaseya; KnowBe4, with a newsletter with a large and engaged audience; and trade shows such as Black Hat for the cybersecurity industry.
Taking a closer look at the cybersecurity arena, there are over 4,000 vendors vying for attention, and 2,000 of them have channel programs. Success requires smart community management. Cisco, for example, hired a community lead to be present at the watering holes and take a grassroots approach of talking to MSPs and MSSPs through their trusted communities. They are also working with identified influencers to receive endorsements from neutral parties.
It isn’t just about pushing your product, either. Those visiting and working these watering holes should be interested in what is going on and willing to provide others with whatever they need.
“It’s all about understanding the MSP and how they operate their business,” said Mike Day, Channel Chief at GoTo. “A good partner must become a part of their team and not just be a vendor.”
That means not trying to force products on MSPs, but rather identifying the problems that need to be solved and finding the right tools to meet those needs.
“Most successful vendors are top down and bottom up,” said McBain.
Also read: 7 Tips for Improving MSP Operations
In-person Visits and Trade Shows
With travel restrictions loosening up, nothing is better than face-to-face meetings. Over the past two years, many have experienced Zoom fatigue. But now channel partners are more ready and willing to attend in-person events, conferences and trade shows.
John Atchison, Head of Global Channel Marketing & Programs, Versa Networks, said that most of the new MSPs and MSSPs his company has recruited over the past six months have been primarily sourced from these types of events.
While attending events, or via other channels, a smart tactic for MSPs is to ask users who they are using for what. That will tip them off to new tools that they can incorporate. They can reach out to those vendors to see if a partnership makes sense.
On the other side of the coin, IT vendors should do all they can to keep their customers happy so they are walking and talking advertisements for their products. The publishing of customer success stories is part of this.
“We are often found by IT vendors where we share customers and they hear what we are doing,” said John P Holland, Chief Revenue Officer at Thrive Networks. “Ask customers who they are using and which ones are doing a great job and start right there.”