The explosion of cloud technology is dramatically changing rules for how best to manage, engage, and motivate our resellers and distributors. How we and our channels evolve through the next few years will be a critical for success.
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Intersection of the Channel and the Cloud
1. Ian Moyse
Sales Director
Workbooks.com
(Cloud CRM Vendor)
Chris Becwar
Marketing & Strategic
Alliances Director
CCI Channel Management
Solutions
The Intersection
of the Channel
and the Cloud
3. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Ian Moyse: Speaker Profile
• 26 yrs+ in IT, 9yrs in IT Security, 7yrs in Cloud
• Sales Director, Workbooks.com, Cloud CRM Vendor
• Sit on Board of Eurocloud UK
• Sit on Governance Board of Cloud Industry Forum (CIF)
• Advisory Board Member SaaSMAX
• Advisor to Board for Evoco ‘Journey2Cloud’
• Named by TalkinCloud one of the global top 200 cloud channel experts in 2011
• Listed on the MSPMentor global top 250 list for 2011
• Named ‘Channelnomics 2011 Influencer of the year for Europe’
• Won ‘European Channel Personality of the year 2011’
• Awarded global ‘AllBusiness Sales AllStar Award for 2010
• Thought Leader to ‘Compare The Cloud’
• Comptia Cloud Essentials Exam Certified 2012
• Worldwide SMB Nation 150 Channel Influencers List 2012, 2013
• Approved Speaker Schoolspeakers.co.uk
• Runner Up 2013 Contribution to IT Award – Network Computing
4. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Chris Becwar: Speaker Profile
• Director of Marketing and Strategic Alliances at CCI
o Leads marketing strategy and operations, expanding CCI’s partner
ecosystem, and contributes to CCI’s consulting practice.
• Led Xora’s channel engagement with Verizon, AT&T, and Sprint while
building strategic alliances with Apple, Motorola, Samsung.
• Led corporate marketing and channel relationships for GreenRoad
with Qualcomm, The Hartford, Marsh, and Zurich.
• With DigitalGlobe, helped company through IPO while leading global
go-to-market initiatives and building channel alliances with Oracle,
Microsoft, Autodesk, ESRI, and others.
5. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Guidance
At Every Step
Program Design
Program Development
Program Evolution
CCI: the Industry Leader in Incentive Solutions
Configurable
SaaS Application
ROI Metrics
Multi-currency/lingual
Fund allocation
New fund set up
Approval workflows
Partner and Activity –
add, deletes, changes
Email alerts
Global Program
Management
Available follow-the-sun
support
Partner Support
Program Administration
Claim administration
Payments
6. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Comprehensive Solution Set
Distributor Reseller Sales Reps Consumer
Co-op/MDF/BDF
Streamline management of joint marketing programs
Marketing Planner
Plan marketing programs, forecast and measure ROI
SPIF & Rebates
Run short- and long-term incentive programs
Sales Performance Rewards
Reward channel partners for attaining sales goals
Trade-In Rewards
Manage incentive programs requiring physical return of goods
Opportunity Management
Deal Registration, Lead Management, Referral Rewards and Special Pricing
18. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
General Resale Challenges Today
• Recessive market, customers burning solutions for longer
o Customers struggling themselves and more cost conscious
• Highly competitive market
• Decrease in margins available from third party commodity items
• Demand from vendors and customers for ‘certified’ channel partners
o Increases in the cost of training and certification
• Increased cost of employing and finding quality skilled labour
• Reduction in the dependency of many vendors in channel and/or partner sales
• An increase in vendor direct sales via either telephone or the Internet
• Demystifying and deskilling of some common IT services putting pressure on services revenues
• Consolidation of large computing vendors
• Reduction in "value add" of vendors and distributors
• Increased competition from vendors competing directly against smaller ISVs
19. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Why Do Channel and Cloud Collide?
Financial worry over who bills the client, how
its billed, what margins? Are there services?
Deal values, annuity vs. up front?
Competition from vendors, cloud
resellers, XSPs
‘Cannabalisation’ – New vs. existing
business, renewals
People skills: How are sales people
compensated, deal protection /value
differentiation?
21. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Channels Concerns with Cloud Solutions
• Vendors having direct customer relationship
• Cannibalization of existing revenues
• Lower sales values
• No installation charges
• Is there any consultancy around the sale?
• Where’s my differentiation gone?
• Billing model’s effect on cash flow!
• Vendors know who my customers are!
25. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Cloudy Channels Will Be Different
• New Values from Distribution
o Aggregation (billing) or sell through
o Broad base vs. specialist distribution values
o New types of distribution relationship with ‘Cloud Focus’
SaaSMax, Cloudmore, Jamcracker, SaaS Plaza
• Resellers
o Levelling the playing field for smaller resellers
o Selling new vs. protecting legacy business a challenge
• XSP (ISP, MSP, etc.)
o Billing models and systems already in place
o Adding cloud to their portfolios
• Pure play cloud resellers / specialist teams / new brands
• Sales agents – referral partners, creating opps for vendors to fulfil
31. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Lewin’s Stages for Organizational Change
1. Unfreeze
• Help the partner be open to changing
their behaviour
2. Change
• Move through the change process by
guiding partners to adopt new ways of
doing business
3. Refreeze
• Ensure the change becomes permanent and
partners continually refine in the new paradigm
32. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Education: Needed Throughout the Chain
• Partners need to extend ‘trusted advisor’ status into cloud
• New sales skills needed: Locus of demand is shifting away from
IT to various business units: support, finance, HR, etc.
• Measurable, video-based training and certification on:
o New products
o New business models
o New sales techniques
• Address partner concern about cash flow. Pay sales first year up
front? More salary based? Individual discussion.
• More than ever, CAMs need to be trained as business
consultants.
33. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Incentivization
• Still too much protecting incumbent revenue by vendors
and partners!
• It’s a great time to reassess how we incentivize the
channel. Time to re-orient $$ toward cloud
• MDF as % of revenue needs to change, since partners
won’t get all revenue until the end of subscription
period.
• More important than ever that MDF be based on an
approved partner marketing plan.
• Consider a more points-based approach, targeting:
o Relevant certifications
o Separated P&Ls for cloud & traditional
o Rewarding agent relationships
o Cloud-specific marketing approaches
34. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Hybrid Incentive Models
• Avoids alienating partners whose business model better
supports the traditional offering while helping them add value
with a broader offering.
• Allows stability as they integrate cloud into their core offerings.
Example: Vendors get 100% of the first year
subscription margin upfront, as with an on-
premise solution. 10% margin on annual renewals
(not offered with traditional solutions.)
35. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Incentives Based on Total Contract Value (TCV)
• Account for the total lifetime value of a new deal.
• If a reseller sells a monthly subscription for a 3-year contract
period: consider an incentive structure based on the full
value of the deal and pay a portion of that incentive up front.
Give partners a commission for the TCV of the
subscription (price*seats*term) plus a recurring
fee to incent partners to actively manage and
service the account.
38. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Lewin’s Stages… Into the Cloud
1. Pre-cloud
• No major change needed
2. Unfreeze
• Help the partner be open to changing
their behaviour
3. Change
• Guiding partners to adopt new ways of
doing business
4. Refreeze
• Ensure the change becomes permanent
and partners continually refine
39. www.channelmanagement.com
info@channelmanagement.com
415.427.5100
Lewin’s Stages… Into the Cloud
1. Pre-cloud
• No major change needed
2. Unfreeze
• Help the partner be open to changing
their behaviour
3. Change
• Guiding partners to adopt new ways of
doing business
4. Refreeze
• Ensure the change becomes permanent
and partners continually refine
Up-front revenue
Accrual-based rewards
Education
Strategic BDF/MDF
Hybrid incentive models
Points-based rewards
Growth of agent and
managed services
partner programs