Intersection of the Channel and the Cloud


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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. 1. Ian MoyseSales CRM Vendor)Chris BecwarMarketing & StrategicAlliances DirectorCCI Channel ManagementSolutionsThe Intersectionof the Channeland the Cloud
  2. 2. www.channelmanagement.cominfo@channelmanagement.com415.427.5100What We’ll Cover1. Big Picture: how cloud is transforming the bizlandscape (Ian)2. Crossing the ‘cloud chasm:’ the tricky daysahead (Ian and Chris)3. Strategies: A new model begs for newapproaches to channel motivation (Chris)
  3. 3. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Ian Moyse: Speaker Profile• 26 yrs+ in IT, 9yrs in IT Security, 7yrs in Cloud• Sales Director,, 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• Runner Up 2013 Contribution to IT Award – Network Computing
  4. 4. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Chris Becwar: Speaker Profile• Director of Marketing and Strategic Alliances at CCIo Leads marketing strategy and operations, expanding CCI’s partnerecosystem, and contributes to CCI’s consulting practice.• Led Xora’s channel engagement with Verizon, AT&T, and Sprint whilebuilding strategic alliances with Apple, Motorola, Samsung.• Led corporate marketing and channel relationships for GreenRoadwith Qualcomm, The Hartford, Marsh, and Zurich.• With DigitalGlobe, helped company through IPO while leading globalgo-to-market initiatives and building channel alliances with Oracle,Microsoft, Autodesk, ESRI, and others.
  5. 5. www.channelmanagement.cominfo@channelmanagement.com415.427.5100GuidanceAt Every Step Program Design Program Development Program EvolutionCCI: the Industry Leader in Incentive SolutionsConfigurableSaaS Application ROI Metrics Multi-currency/lingual Fund allocation New fund set up Approval workflows Partner and Activity –add, deletes, changes Email alertsGlobal ProgramManagement Available follow-the-sunsupport Partner Support Program Administration Claim administration Payments
  6. 6. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Comprehensive Solution SetDistributor Reseller Sales Reps ConsumerCo-op/MDF/BDFStreamline management of joint marketing programs  Marketing PlannerPlan marketing programs, forecast and measure ROI  SPIF & RebatesRun short- and long-term incentive programs    Sales Performance RewardsReward channel partners for attaining sales goals  Trade-In RewardsManage incentive programs requiring physical return of goods  Opportunity ManagementDeal Registration, Lead Management, Referral Rewards and Special Pricing   
  7. 7. www.channelmanagement.cominfo@channelmanagement.com415.427.5100CCI Clients
  8. 8. IanMoyseBig Picture:How Cloud Is Transforming theBiz LandscapeSales Director,
  9. 9. www.channelmanagement.cominfo@channelmanagement.com415.427.5100xxxxxxx
  10. 10. www.channelmanagement.cominfo@channelmanagement.com415.427.5100The World Is Changing: Movies
  11. 11. www.channelmanagement.cominfo@channelmanagement.com415.427.5100The World Is Changing: Music
  12. 12. www.channelmanagement.cominfo@channelmanagement.com415.427.5100The World Is Changing: Books
  13. 13. www.channelmanagement.cominfo@channelmanagement.com415.427.5100The World Is Changing: Photography
  14. 14. www.channelmanagement.cominfo@channelmanagement.com415.427.5100The World Is Changing: Postal
  15. 15. www.channelmanagement.cominfo@channelmanagement.com415.427.5100The World Is Changing: IT
  16. 16. IAN MOYSEIT
  17. 17. IanMoyse&ChrisBecwarCrossing the ‘Cloud Chasm:’the Tricky Days Ahead
  18. 18. www.channelmanagement.cominfo@channelmanagement.com415.427.5100General Resale Challenges Today• Recessive market, customers burning solutions for longero 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 partnerso 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. 19. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Why Do Channel and Cloud Collide?Financial worry over who bills the client, howits billed, what margins? Are there services?Deal values, annuity vs. up front?Competition from vendors, cloudresellers, XSPs‘Cannabalisation’ – New vs. existingbusiness, renewalsPeople skills: How are sales peoplecompensated, deal protection /valuedifferentiation?
  20. 20. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Will the Channel Come Out to Play?“More than half of resellers are not currently selling any cloud”
  21. 21. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Channels 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!
  22. 22. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Channel Barriers
  23. 23. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Why Would You Not Sell Cloud to Customers?
  24. 24. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Benefits of Reselling Cloud
  25. 25. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Cloudy Channels Will Be Different• New Values from Distributiono Aggregation (billing) or sell througho Broad base vs. specialist distribution valueso New types of distribution relationship with ‘Cloud Focus’ SaaSMax, Cloudmore, Jamcracker, SaaS Plaza• Resellerso Levelling the playing field for smaller resellerso Selling new vs. protecting legacy business a challenge• XSP (ISP, MSP, etc.)o Billing models and systems already in placeo Adding cloud to their portfolios• Pure play cloud resellers / specialist teams / new brands• Sales agents – referral partners, creating opps for vendors to fulfil
  26. 26. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Users Will Find Cloud Suppliers
  27. 27. ChrisBecwarDirector, Marketing and Strategic AlliancesCCI: Channel Management SolutionsStrategies:A New Model Begs for New Approaches
  28. 28. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Channel Evolution and MixDirectCorporateresellerDistributorVARRetailer
  29. 29. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Channel Evolution and MixDirectCorporateresellerDistributorVARRetailerISVsSystemIntegratorsDirectMarketersMSPsHosting/InfrastructureOEMSolutionProviders
  30. 30. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Channel Evolution and MixDirectCorporateresellerDistributorVARRetailerISVsCloudAgentsSystemIntegratorsDirectMarketersMSPsHosting/InfrastructureOEMSolutionProviders
  31. 31. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Lewin’s Stages for Organizational Change1. Unfreeze• Help the partner be open to changingtheir behaviour2. Change• Move through the change process byguiding partners to adopt new ways ofdoing business3. Refreeze• Ensure the change becomes permanent andpartners continually refine in the new paradigm
  32. 32. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Education: Needed Throughout the Chain• Partners need to extend ‘trusted advisor’ status into cloud• New sales skills needed: Locus of demand is shifting away fromIT to various business units: support, finance, HR, etc.• Measurable, video-based training and certification on:o New productso New business modelso New sales techniques• Address partner concern about cash flow. Pay sales first year upfront? More salary based? Individual discussion.• More than ever, CAMs need to be trained as businessconsultants.
  33. 33. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Incentivization• Still too much protecting incumbent revenue by vendorsand partners!• It’s a great time to reassess how we incentivize thechannel. Time to re-orient $$ toward cloud• MDF as % of revenue needs to change, since partnerswon’t get all revenue until the end of subscriptionperiod.• More important than ever that MDF be based on anapproved partner marketing plan.• Consider a more points-based approach, targeting:o Relevant certificationso Separated P&Ls for cloud & traditionalo Rewarding agent relationshipso Cloud-specific marketing approaches
  34. 34. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Hybrid Incentive Models• Avoids alienating partners whose business model bettersupports the traditional offering while helping them add valuewith a broader offering.• Allows stability as they integrate cloud into their core offerings.Example: Vendors get 100% of the first yearsubscription margin upfront, as with an on-premise solution. 10% margin on annual renewals(not offered with traditional solutions.)
  35. 35. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Incentives 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 contractperiod: consider an incentive structure based on the fullvalue of the deal and pay a portion of that incentive up front.Give partners a commission for the TCV of thesubscription (price*seats*term) plus a recurringfee to incent partners to actively manage andservice the account.
  36. 36. www.channelmanagement.cominfo@channelmanagement.com415.427.5100The Rule of 78s
  37. 37. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Financing for Partners• With economic dip, finding sourcesof credit is challenging.• Help partners through thetransition until the annuity modelsmoothes out.• Accelerating the transition fills the‘revenue gap’ for vendors andpartners.
  38. 38. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Lewin’s Stages… Into the Cloud1. Pre-cloud• No major change needed2. Unfreeze• Help the partner be open to changingtheir behaviour3. Change• Guiding partners to adopt new ways ofdoing business4. Refreeze• Ensure the change becomes permanentand partners continually refine
  39. 39. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Lewin’s Stages… Into the Cloud1. Pre-cloud• No major change needed2. Unfreeze• Help the partner be open to changingtheir behaviour3. Change• Guiding partners to adopt new ways ofdoing business4. Refreeze• Ensure the change becomes permanentand partners continually refineUp-front revenueAccrual-based rewardsEducationStrategic BDF/MDFHybrid incentive modelsPoints-based rewardsGrowth of agent andmanaged servicespartner programs
  40. 40. www.channelmanagement.cominfo@channelmanagement.com415.427.5100Good Reference Points
  41. 41. Thank You&,Marketing&StrategicAlliancesCCI: