Industry Shift Toward As A Service Changing The Partner-Vendor Relationship
Industry titans Cisco, Lenovo, HP Inc., Hewlett Packard Enterprise and Dell Technologies are taking on more risk and liability for the channel as partners shift toward a more cloudlike, as-a-service sales model.
As solution providers change the way they transact and sell to customers as more seek to buy and consume IT as a service, they say vendors are now providing the financing and capital necessary for them to do long term, multiyear recurring revenue deals. Traditionally, channel as-a-service deals are for three to five years.
Top executives and industry veterans from Cisco, Lenovo, HP, HPE and Dell Technologies recently met for CRN's Everything-As-A-Service Roundtable to discuss the growing demand for service-based offerings and the impact that has on channel partners, particularly as it comes to shouldering risk.
“The really neat thing—and the way we're looking at it—is we can size the opportunity, and we can adjust the risk profile to however the customer and the partner want to consume it,” said Nirav Sheth, vice president, partner solutions, architectures and engineering, for Cisco. “Because the partners do operate on razor-thin margins we want to be very pragmatic about making sure that we're delivering to them the right kind of incentives, rewards and capital structure that they need as they continue to balance their investments between a traditional model and these emerging models.”
CRN asked each executive the question, “How does as a service change the balance sheet for the partner and vendor?”