Changing Times in the Channel
I’m on my way this morning to speak at the IAMCP UK Member meeting at Microsoft London. That’s the International Association of Microsoft Channel Partners to you and me. The people who actually deliver Microsoft solutions to customers and handle 95% of Microsoft Revenue.
But as Bob Dylan would sing: The Times They Are a-Changin’
The Cloud is creating a “perfect storm” in the Channel business. A lot of the value Partners used to offer Customers is now available through the Cloud without them- Email, Collaboration, Storage and even Authentication!
Not only that, but the shift from traditional licenses, Cap-Ex and Maintenance revenue to Op-Ex or Subscription revenue is wreaking major havoc with profitability and cash flow. If your business is geared towards big, lumpy sales, with healthy margins, shifting to a smaller recurring income is going to disrupt the business model.
And because the technology is changing, to be less technical, with more technical detail abstracted away, the skills partners have been investing in for years are becoming obsolete. The people that provided that service aren’t needed anymore.
But I think the Channel is too quick to look to doom and gloom. They mustn’t forget their USP’s.
They’ve got great TRUST with real customers that pay them actual money.
The stuff Cloud providers CRAVE. They have in fact got a head start in the Cloud Business because the Economics of Cloud are so hard, as they’re discovering for themselves. But the reason Cloud Economics are hard is because it costs Cloud providers money to acquire customers. The Channel has the customers already. There is a perfect fit here if the channel can get to grips with the model.
So what does the Channel need to do to transform? Here is my top ten:
- Construct a Portfolio of Cloud Services
- Start eating their own Dog Food- using Cloud their own business
- Sell Support for Cloud Services- It won’t fix itself
- Add Services around Cloud- It won’t configure itself
- Cross Sell, Up Sell- Keep that IT budget but deliver more
- Do Due Diligence on Cloud Providers- They aren’t all the same
- Guide Cloud in to Networks Safely- and securely
- Start Delivering On-Ramp Cloud Services Today- because that is where demand is
- Leverage On-Prem and Cloud for “Hybrid” Solutions- drive ROI with existing networks
- Focus on Business Transformation- The future is less IT and more Business
As my good friend Anders Trolle-Schultz says- It’s no longer about “How IT” but “Why IT”.