In terms of channel management, the cloud creates new waves in the vendor-partner relationship that can capsize profitability. The old ways of operating aren’t cutting it anymore. Now anyone can go to Amazon and just buy some space in the cloud – but then what? How does that become an offering? How do you create actual value that you can sell? How do you differentiate yourself? How do you support it? How do you actually sell it?
In terms of the vendor-partner relationship, the cloud creates new dynamics that have vendors considering other questions about their channel management strategy, for example…
How will the partner keep the clients happy?
That’s the sort of question that informs creation of the partner compensation plan. In the cloud, vendors and partners are selling a service – and that really means you’re actually selling yourself as well. Unlike the old days of a maintenance contract on packaged software, renewal of the entire service is now the name of the game. Selling in the cloud means being fully engaged with the customer at all times, making sure everyone’s happy, which requires different sales tactics than the old paradigm of get as much as you can on the front end and then move on.
What partner behaviors do vendors need to incent?
Vendors need to make sure that their partners are always engaging with the clients (and vendors also need to be engaging more with the clients). Clients will need to be constantly seeing the value of the service, so there’s no question at the end of the year of wanting to re-up. In terms of sales, it’s a very different mindset and requires very different behavior.
How do channel partners create value in the channel with our cloud offering?
Customizing and adding value is a different proposition in the cloud than with hardware and software products. And since partners won’t sell what they won’t make money on, vendors need to be able to fully understand and express their channel value proposition.
Questions abound for partners and vendors who are considering how to monetize the cloud. Having a cloud offering allows you to differentiate yourself from a lot of the other providers, so the faster companies can work out their answers, the better.