It's no secret that solution provider business models are changing. And, as a result, how vendors work with and compensate their partners is changing as well.
As traditional VARs increase their services mix and move to more of a cloud/managed services model, vendors are scrambling to evolve their partner programs and compensation models to better recognize that shift. And as vendors look to go deeper and build more strategic relationships with their top partners, they're also coming up with new ways to incentivize them and help them expand their businesses. But are the strategies working? Are vendors keeping up with pace of change?
At XChange Solution Provider 2014 in Los Angeles, CRN sat down for a roundtable discussion with some of the top channel chiefs in the industry to find out how vendors are changing the way they do business in the channel. The roundtable featured Edison Peres, senior vice president of Worldwide Channels at Cisco Systems; Tami Duncan, IBM's vice president of Global Business Partners for North America; Frank Vitagliano, vice president of North America Channels at Dell; Jesse Chavez, vice president of Worldwide Channel Strategy and Operations at Hewlett-Packard; Cindy Bates, vice president of Microsoft's U.S. SMB division; and Frank Rauch, vice president of VMware's Americas Partner Organization.
During a wide-ranging discussion about the state of the channel today, the executives discussed how the cloud has changed their approach to partners and why the shift from product reselling to services is actually a good thing for vendors. Here are excerpts from the discussion.
CRN: What are you seeing from partners as they move to cloud and off-premise services? Are they asking for different things from vendors, and are they working with fewer vendor partners?
Tami Duncan: What they're asking for depends on what their heritage is. So if they're coming in as a new partner, they may be asking for very different things than if you've got a partner who is trying to do the transition. So partners that are transitioning from vintage in that proactive state want something a little bit different than someone who doesn't have that back history. They're accustomed to different margins, they're accustomed to different business styles, documentation. So we're trying to adjust both of those things and find the meat in the middle so that we can serve the needs of both kinds of partners.
Cindy Bates: One interesting thing in terms of the cloud and how that really changes the relationship is the importance of even more close connection between the vendors and the partner and the importance of transparency. They are representing our services, let's say, for example, Office 365, to their customers. And it is important that they have visibility as an example and service status, things like that.
So we recently launched our partner admin center, which is a step forward in that regard to arm our partners even more deeply to be able to represent, in this case, the public cloud. And really, the symbiotic relationship between the partner and the vendor is even deeper. That's our intent with something like that, where they can see all the customers, they can see the status of the service reports coming back from our data centers.
NEXT: Why Are Solution Providers Going With Fewer Vendor Partners?