Channel Insights 2011

1. Channel Insights 2010 Research
Research fieldwork conducted by Gorilla Corporation
Presentation & analysis by Fox Parrack Singapour

2. Channel Insights 2010 Research
Introduction
By David Fox, Chairman of Fox Parrack Singapour
The context
For many, if not most, technology vendors, the channel has become an increasingly
significant element of their go-to-market plans. The massive potential of a motivated
and equipped partner channel to provide greater market coverage and greater customer
touch, when compared to the costs and limitations of a direct touch internal team, is a
compelling proposition for any management team. And the tough economic pressures of
the last few years have only proved to underwrite the logic of that particular argument.
In simple terms, the channel represents the engine of growth for the tech sector.
So, with this level of importance, an intimate knowledge of the channel would appear to
be a prerequisite for all those with a significant partner-based strategy. The harsh reality
is that in most cases vendors have a limited view of their channel partners – the top tier
may be well known and regularly touched, but the vast majority are thinly understood
and rarely touched. The Pareto rule, which stills seems to apply to most channel
performance measures, is probably the best indicator of the state of play.
The role of Channel Insights
The Channel Insights research study has been created to fill this gap in knowledge,
to indentify the pinch points that prevent partners from becoming that motivated and
equipped engine of growth, and to provide indicators to vendors for what needs to be
done going forward.
And as a little taster for the full study, the research has uncovered a number of significant
issues that should give those at the driving edge of channel strategy some cause for
concern. I refer to these issues as ‘disconnects’, and a few are particularly troublesome.
The main areas of disconnect revolve around the question of sales and marketing
support provided by vendors and especially the marketing aspects, also accreditation
and, thirdly, the very nature and status of the relationship between partner and vendor.
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3. Channel Insights 2010 Research
Methodology
Between November 2010 and the end of January 2011, over 100 UK channel partners
were interviewed on a wide range of issues. These in-depth interviews, often lasting
over 20 minutes, provide both quantitative and qualitative insights into the health
and wellbeing of the UK channel. Respondents were drawn from a cross- section of
the partner community in the UK, providing a representative sample of the channel
landscape.
Importantly, this 2010 survey follows previous Channel Insights research carried out over
several years - the first study was in 2002 – providing trending data to identify shifts in
attitude and behaviour, as well as the progression of the major channel issues.
Respondent profiles
What turnover did your company achieve last year UK 2010
Less than £250,000 12%
£250,000 - £500,000 14%
£500,000 - £1m 14%
£1m - £2m 13%
£2m - £5m 12%
£6m - £10m 2%
£11m - £50m 11%
£50m+ 5%
Confidential/Non Disclosed 13%
Don’t know 3%
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4. Channel Insights 2010 Research
Key highlights
Some of the marketing pinch points
• From our latest survey 52% of partners do not have a dedicated marketing
resource - a slight rise from 48% in 2006 and on a par with 2004.
• Just 40% of partners now quote a dedicated budget for marketing, down from
57% in 2006, and 47% in 2004. The situation had improved but the positive trend
has reversed.
• There has been a huge rise in the number of partners reporting that marketing
activity is funded ‘from another budget’, up from just 3% to 32%. A good deal is
now funded on a discretionary basis.
• 93% of partners say that they, not vendors, drive marketing activity. Given the
huge vendor investments in Partner Marketing Portals and co-marketing content,
this position indicates that we still haven’t got it right yet!
• 78% of partners surveyed could not name a successful vendor marketing initiative
that they had been involved in.
What sales & marketing support do they NOT want from vendors?
When the ’Least useful assistance’ responses are mapped, a major disconnect in the
vendor/partner relationship becomes even clearer.
Top ‘Least Useful’;
1. Help with Marketing Planning
2. Technical Accreditation
3. Technology Training
To underpin the real extent of the picture here, the gap between these top 3 ‘least useful’
and the fourth position (Event support) is significant - more than twice the vote between
third and fourth positions.
The issue of leads
• 54% report receiving no quality leads on a monthly basis.
• Almost 70% say that they do not receive quality leads from vendors.
• This compares to the next highest score of 1 quality lead per month and per
vendor for 7% and 9% respectively. The long tale of more than 1 lead falls
away rapidly.
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5. Channel Insights 2010 Research
The big disconnects
The Channel Insights research was conceived to indentify pinch points that may prevent
partners from becoming the motivated and equipped engine of growth for the IT
sector. Some of these problem areas are significant and we have referred to them as
‘disconnects’.
From the authors’ perspective, here are two of the most important;
Channel Disconnect 1: The role and value of marketing
• #1 issue that concerns partners is ‘differentiation’ but they don’t see marketing
helping this
• Over 50% have no dedicated marketing resources and 60% don’t have dedicated
marketing budget
• Over 90% of partners say that they, not vendors, will drive marketing initiatives
• Majority not valuing vendor assistance with their marketing planning
• Majority focus on lead provision, and not necessarily on strategic growth
strategies
Impact:
These factors point to the limited ability for at least 50% of partners to effectively drive
business, beyond a tactical sales approach. A harsher prognosis may question these
businesses’ abilities to actually survive longer term, certainly as the market heats up and
becomes more competitive.
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6. Channel Insights 2010 Research
The big disconnects
Channel Disconnect 2: The issue of trust and the relationship value
• Partners are increasing their focus on direct, especially face-to-face customer
engagement
• In contrast, the majority of partners are actively shunning direct vendor
involvement in such activities as events and joint sales visits
• The majority of partners want vendors to provide them with leads and, to
a slightly lesser extent Coop funding, but they do not want to have any real
collaboration with vendors (e.g. on sales and marketing activity)
• Technical Accreditation is no longer seen as useful - certainly not sufficiently
valuable when compared to the cost
• Technology Training from vendors is also not seen as useful
Impact:
When assessing these factors, the conclusion we are left with is that many partners
are adopting a ‘go-it-alone’ attitude. It illustrates ‘supplier’ rather than ‘partnership’
relationships. Indeed, in most scenarios, these are transactional arrangements rather
than relationships and not a firm foundation on which to build a predictable and scalable
‘engine of growth’.
Need more information?
A full presentation of the Channel Insights research study and a more comprehensive
report can be made available, please contact the authors overleaf.
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7. Channel Insights 2010 Research
The companies behind this report
About Fox Parrack Singapour
Fox Parrack Singapour is Europe’s longest established integrated tech-marketing agency
and has worked with many of the industry’s biggest brands such as BT, BlackBerry, Cisco,
Microsoft, Nortel, Novell, Oracle, Symantec, Vodafone and Xerox, as well as numerous
emerging technology companies.
FPS delivers programmes covering:
• Demand Generation and Lead Nurturing
• Channel Marketing
• Brand and Product Communications
The organisation has over two decades of channel marketing experience, starting with
launch of Frontline/First Software (now C2000) in 1984 and is a founder member of n42,
pan-European network of tech-focused marketing agencies.
Contact: David Fox, dfox@foxps.com
About Gorilla Corporation
Gorilla Corporation is a global organisation that supports Fortune 1000 companies in
business growth and optimisation strategies worldwide.
Gorilla’s specialist skills cover:
• sales and channel strategy
• partner ecosystems
• channel programmes
• outsourced field sales
• telemarketing & inside sales
The team’s experience includes working with IBM, HP, Oracle/Sun, Cisco, McAfee, Apple,
Avaya, Alcatel, BT, Telefonica, Symantec, and Microsoft.
Contact: Carlo Tortora Brayda di Belvedere, carlo.tortora@gorillaict.com
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8. Channel Insights 2010 Research
Page: 8 © 2011 Fox Parrack Singapour & Gorilla Corporation. All rights reserved.