New research from Brocade Communications indicates that many solution providers are being impeded in their efforts to move toward cloud-based professional services because of a lack of flexibility and capability by their vendor partners.
The study revealed that in addition to direct competition, channel organization’s professional services ambitions are being restricted by a lack of innovative vendor solutions, overly complex programs and proprietary vendor technologies.
Based on a survey of more than 500 channel organizations worldwide, the report revealed that almost half of respondents expect professional services to become their main revenue generator by 2020. Yet, for the majority of respondents, professional services accounts for 25 per cent or less of revenues today.
The research also revealed the growing customer demand for professional services, with complexity and constraints on CapEx reported as the biggest customer challenges. Only 11 per cent of respondents currently look to their vendors for innovative finance solutions and 19 per cent for marketing funding―key when trying to build a brand and reputation rather than sell on price.
Regan McGrath, senior vice president of worldwide sales at Brocade, said revenue focused channel programs combined with differentiated technology solutions that help address customers’ needs for innovative and easy to deploy networks help the channel develop their reputation as consultants, will all become increasingly critical to developing competitive consultancy businesses that drive significant revenue returns.McGraph added that to compete in the professional services sector, channel organizations now need to consider these critical questions:
Do my vendors’ strategies, vision, and approaches to technology design support or impede our ability to maximize any professional services and support revenue opportunities?
Do my vendors compete with me for professional services opportunities?
Do my vendors provide value through genuine technology differentiation?
Do my vendors provide finance solutions that address customers CapEX investment restrictions?
Do my vendors provide marketing enablement, access to expertise and tools that help me build my brand?
Chuck Bartlett, vice president and general manager, Advanced Infrastructure Solutions (AIS) at Tech Data, said this research reinforces the importance of flexible and accessible vendor programs in the channel’s evolution towards successful professional services delivery.