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Channel Chiefs ‘Shining A Spotlight’ On Strategic Partners Amid Economic Uncertainty

Mark Haranas, O’Ryan Johnson

From providing a path to more profit for partners to helping them create new practices in hot markets, channel chiefs explain why they are looking to enable existing and new strategic channel partners as an engine for growth.

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Channel chiefs are seeing the growing need to convert more solution providers into strategic partners in the midst of an uncertain economy by investing heavily to differentiate themselves from the crowd.

Whether it’s providing a path to next-level partner profits, building out certification training or helping partners create new practices in hot markets, several channel leaders featured in the 2023 CRN Channel Chiefs project said they are looking to enable both existing and new strategic channel partners as an engine for growth.

“Partners are choosing their line cards very carefully,” said Frank Rauch, global channel chief at Cato Networks, Tel Aviv, Israel. “The economy is probably not where we need it to be, and this is a time of choice for some channel partners even though they may be very, very comfortable with some of the vendors on their line card right now.”

[Related: Why AWS Is ‘Partner Obsessed’: Selipsky, Borno Leading The Charge]

One vendor pushing the envelope to win more partner mindshare by investing heavily in the channel is Amazon Web Services.

The Seattle-based cloud market-share leader is forming strategic collaboration agreements (SCAs) with more partners than ever before, laying out AWS’ commitment to train, enable and pass along customer opportunities to partners if they agree to invest in areas such as hiring AWS professionals, growing their AWS portfolio offerings and winning new customers.

Fast-growing solution provider Innovative Solutions recently signed an SCA with AWS where the cloud giant is investing to help leverage the Rochester, N.Y.-based solution provider by building new sales teams that are business-outcome-oriented versus transactional; quickly certifying and training new hires; and offering dedicated AWS salespeople to work hand-in-hand with Innovative Solutions.

“AWS wants us to help drive 1,000 net-new AWS SMB customers over the next four years, which is a huge lift that we wouldn’t be able to do without them,” said Justin Copie, CEO of Innovative Solutions. “As part of the SCA, we’ll hire 200 new people. … Even in this economy, we’re hiring—not firing.”

‘They Need Armies Of Partners’

AWS is helping partners build new practices at breakneck speed in high-demand customer areas like data analytics and machine learning, while also helping partners sell faster via the AWS Marketplace.

“They need armies of partners that are aligned to the core values of AWS,” said Copie. “[AWS Channel Chief] Ruba Borno and [AWS CEO] Adam Selipsky see that the role of the partner is to shepherd every one of these small- to midsize-business customers at scale. They can’t do it on their own. … AWS is really shining a spotlight on Innovative.”

In terms of cloud competition for partner mindshare, these SCAs are a major market differentiator.

Seattle-based Cascadeo partners with Google Cloud and Microsoft. However, AWS agreed to work more tightly with Cascadeo by creating an SCA committed to growing employee skill sets, cloud revenue, customer adoption and formalizing new departments and services offerings.

“We are very heavily betting on AWS because they heavily bet on us,” said Jared Reimer, Cascadeo’s founder, president and CTO. “We continue to support all of the major U.S. cloud hyperscalers, but the bulk of our business today and this year will be AWS-centric.”

VMware’s ‘Huge Effort’ For Partners

AWS isn’t the only company fighting for partners to help their joint customers during a downturn in the economy.

VMware channel chief Ricky Cooper told CRN his company’s channel strategy for 2023 has two prongs: One is to get solution providers to take on higher-level services, and the second is to drive more opportunities to partners.

“We will make a huge effort to ensure that we’re passing as many services opportunities as we can to our partner ecosystem, and you’ll see a huge change there,” said Cooper, head of worldwide partner and commercial sales at VMware, Palo Alto, Calif. “There was a tendency before—when the pie is a bit smaller and you’ve got large ELAs—we were taking on a lot of that services work ourselves. Things are really opening up [for partners].”

VMware’s new Partner Connect 2.0 program will officially launch in the first quarter of 2023. It will place more emphasis on partners becoming technically proficient, offering systems integrators points for services as well as test and development work. With those points VMware partners can progress to higher incentive tiers under the new program.

One key initiative to create more strategic relationships with VMware partners is creating a new top partner tier dubbed Pinnacle. “The relationships with our Pinnacle partners will have a much tighter level of engagement such as executive sponsorship, managed account coverage and joint business plan development,” said Cooper.

‘Smart’ Vendors Are Leveraging The Channel

There is sometimes a knee-jerk tendency to pull back from channel investments in uncertain economic times, but the “smart” vendors leverage the channel’s wealth of talent, according to Scott Winslow, president and founder of Waltham, Mass.-based Winslow Technology Group.

“We have sales, engineering, marketing, finance services, managed services folks that we are employing on our payroll that are available to our [vendor] partners. What better way for them to become more efficient themselves than to do more with a channel?” said Winslow.

Anything vendors can do to increase business in the channel—such as bringing solution providers into more opportunities and reciprocating business—is not only going to make partners stronger, but it’s going to make the vendor’s “balance sheet look better as well,” Winslow said.

“These are resources that we have developed, hired and trained—vendors can leverage them. It ends up being a win-win,” said Winslow, whose company partners with VMware and Dell Technologies.

“We’re looking for [vendors] to double down on their investment in the partner community and increase the amount of business going through the partnership,” he said. “That’s a great long-term strategy.”

Building ‘Meaningful, Long-Lasting’ Relationships

Ruba Borno is on a mission to make a larger percentage of the AWS channel base into strategic partners versus just transactional, especially in an uncertain global economy.

“The bar for business is getting higher and higher. Especially in this economic climate, our customers are being challenged to deliver more and more with less and less. To achieve this higher bar, our customers cannot go at it alone. They need a team,” said Borno during a presentation at AWS re:Invent in December in front of thousands of partners. “And that team is comprised of AWS partners and AWS side-by-side to help our customers on their transformation journey.”

Borno said it can take over a dozen different products and services to achieve a customer’s business outcome, which is why her company is investing to expand partners’ AWS portfolio, not only by signing SCAs but by providing greater profit versus the competition.

To stand out from its cloud competitors, Borno said AWS is focused on driving partner program simplicity and higher margins, along with specializations and co-innovating with partners.

AWS has created a formula that allows partners who sell business-outcome solutions to reap 60 percent margins on their offerings. A recent AWS study also found that partners can make $6.40 per one AWS dollar sold if they can offer services and support across the entire cloud lifec ycle.

“I do want to emphasize that our goal is to ensure that we work with our partners on a meaningful long-term relationship,” said Borno in an interview with CRN in December. “When AWS and our partners work together, we propel our customers over the finish line. And that is our destination.”

For its part, Innovative Solutions is bullish about AWS’ mission to double down on partners in 2023 and beyond.

“They’re really looking to see where their most strategic partners can lead customer journeys instead of AWS leading those journeys,” said Copie. “The opportunity is just so massive.”

Gina Narcisi contributed to this article.

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