Forrester: Tech Vendors Benefit From Channel, But Can Do More

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A Forrester report is good news for solution providers: IT vendors that invest more in channel programs see a higher return on their investment than those that invest less.

The report notes that tech marketers plan to increase their channel enablement budget to 8.5 percent of overall marketing this year, up from 7 percent in 2011, according to Forrester.

"It's a case of good dollars following good -- channels continue to perform, in terms of revenue contribution, so tech vendors continue to invest in them," wrote Forrester's Tim Harmon in the report. "With more tech vendors investing more in channels, it's those that invest wisely that will reap the highest return on channel investment."

Related: Shing Stars: 2012 CRN Channel Champions Awards

Channel partners now account for more than 60 percent of large vendors' revenue (companies with more than 5,000 employees), a figure that has steadily increased for more than a decade and will continue next year for vendors of all sizes, according to Forrester.

"Clearly, tech vendors are continuing to put money into the channel as a strategic asset of their go-to-market business models," Harmon wrote. "It used to be, not long ago at all, that -- when it came to technology support investment -- the channels organization was the tech vendor's 'cobbler's child' (i.e., the underfunded or ignored)," Harmon wrote.

Today, 31 percent of tech vendors have invested in partner relationship management software and another 35 percent are planning new PRM investment in 2012, according to Forrester.

"Channels represent a key business model means to scale, not just geographically, but deeper into vertical and company-size segments as well," Harmon wrote.

To gain further traction with their channels organization, Forrester offers three recommendations for vendors.

First, to expand certifications to encompass partners' specializations. "Most tech vendor partners' certification programs are designed along the lines of their product lines," Harmon wrote. "But channel partners use their business acumen and positioning or more than their technology positioning/acumen in their go-to markets. You can accommodate their investments by adding a business dimension to your partner certification program."

Second, Forrester recommends that vendors invest in social and community marketing for their channels. "You should train and incentivize your partners to blog, tweet, produce video and participate in relevant customer communities and incorporate them into your social listening ecosystem," Harmon wrote.

Third, IT vendors should move beyond home-grown PRM solutions to support channel partners, particularly around marketing automation, channel operations management and channel analytics, according to Forrester.

"Those tech vendors that invest in their channels appropriately benefit from deeper market reach, better customer expansion and higher profitability," Harmon wrote.

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