A new survey by CompTIA reveals that all is not well with the partner experience (PX) between vendors and managed service providers (MSPs). Partners, it turns out, are getting picky about who they work with. 50% of channel firms have dropped a vendor from their business portfolio in the past year due to poor PX practices.
This marks a change from a couple decades back when everyone scrambled to partner with the big IT vendors. While most are still keen to work with the likes of Microsoft, AWS, Google, IBM, and others, the tendency now is that MSPs will only start partner relationships with major vendors if there’s clear benefit to them and the vendor treats them well.
How the Partner Experience Impacts Vendor-MSP Relationships
In CompTIA’s survey, 35% of channel firms said they only work with vendors that offer a seamless partner experience. And 57% are willing to accept slight deficiencies in PX if they can generate good revenue. Only 8% are unconcerned with PX when choosing vendor partners.
“Partner experience is more critical now than it’s ever been,” said Frank Vitagliano, CEO at Global Technology Distribution Council (GTDC). “While I might have said that 10 or 15 years ago with the shift to services, today it is even more complicated with multicloud environments, online marketplaces, and the proliferation of as-a-service and consumption models that differ for every vendor.”
Why Vendors Should Prioritize Partner Experience
If vendors want to be competitive and continue working with the best channel partners, they must create a partner experience that will attract and retain MSPs. This urgent need primarily stems from the fact that MSPs now have more choice, partner programs change frequently, and there are more security tool options available now that cyberattacks are common.
MSPs now have more choice
With so many startups, cloud vendors, and cybersecurity specialists to choose from, MSPs have more choice than ever when it comes to the relationships they favor. If they have a poor experience with Azure, they can switch to AWS. If one security vendor lets them down, they have plenty of alternatives available.
“Channel partners enjoy far greater choice of vendors to align with in a marketplace that has expanded in the cloud era,” said Carolyn April, senior director of industry analysis at CompTIA. “Greater choice means greater chance to find the most optimal fit. Proactive vendors understand that they need to step up their game and optimize the experience for partners or watch them go elsewhere.”
This expansion of choice has shone the spotlight brightly on partner experience, which CompTIA defines as “the totality of your engagement with a technology vendor, from recruitment and/or search to onboarding to support and ongoing communications and ease of doing business.”
As such, PX now encompasses a breadth of channel complexity, business models, and non-linear routes to market. Gone are the days when a partner was viewed by a vendor purely based on transactional product sales. In fact, some believe the tide has turned. Vendors now have to pay far more attention to the well being of their partners, as they often represent their only avenue into a specific geography, vertical, market segment, or other niche.
“Partners are almost becoming a hybrid of direct sales for a vendor,” said Sean Lardo, chief evangelist at ConnectWise. “They might be your only source of revenue. Their growth matters a lot.”
Partner programs change often
In the old days, many value-added resellers (VARs) and MSPs hung their hats on one specific vendor. They were a Cisco, Microsoft, or IBM shop. On the plus side, they had access to many perks and discounts courtesy of that relationship.
However, they were subject to the unexpected changes of one vendor. They might arrive at work one day to find that their commission system had changed, their discounts had lowered, or their long-term channel reps had moved on.
MSPs must keep track of a variety of partner programs, enablement priorities, and training opportunities. But, they can’t rest on their laurels — these programs constantly change.
“Once you think you’ve become easy to do business with, your existing programs and offerings and trainings change,” said Vitagliano. “Partners today are going through an incredible transformation that requires a ton of support on the vendor side and the distribution side.”
Vendors, too, know they have to make these programs work if they want to grow. Most vendors have moved from selling software to selling services. They’re seeing an increased percentage of their business heading through MSPs and partner channels. Some vendors have responded by attempting to transform themselves into MSPs.
“MSPs have proven their worth since the pandemic began,” said Neal Dennis, threat intelligence specialist for Cyware. “MSPs are experiencing double-digit growth year over year … .”
Many more small businesses, Dennis added, now recognize the need for 24/7/365 operations but do not have the staff or a budget for full-time employees. MSPs are the answer both for new compliance requirements and internal security deficits.
Security tool options have increased with cyberattacks
While the MSP space in general is showing definite growth, cybersecurity is perhaps the hottest sector.
“With the increasing number of cyberattacks over the past five years, the channel has grown significantly,” said Matt Scully, channel chief at Redstor. “There are more tools than ever before to combat these attacks, but the problem is that the hackers are not worried about today’s solutions; they are constantly looking for new ways to breach companies and hack today’s security solutions.”
As a result, solution providers and vendors now find themselves selling their security tools and services via the channel. On the one hand, MSPs have to vie for attention from security vendors if they want to represent best-in-class tools. On the other hand, vendors must up their game on the partner experience if they want their security tools to reach a wider perimeter.
“This puts a heavy reliance on the MSP to vet solution providers and to make sure the one they select best fits the needs of their clients,” said Scully.
Bottom Line: Partner Experience
Because vendors now have to compete with each other to work with the best value-added resellers and managed service providers, they must prioritize delivering a partner experience that outshines their competitors’. Now that you understand how vital partner experience is to the health of your business, brainstorm some ways you can inspire new partners to work with you long term.