IDC’s Steve White recently got a friendly reminder about how far the channel partner community has come when he interviewed an executive and asked him to fill out a questionnaire. One section, about partner types, drew an interesting reaction.
“I gave him a list of partner types. He looked at me and asked, ‘Did you write this question 10 years ago?’” the vice-president of channels and alliances told CDN. “Most partners we speak to now are doing multiple activities. And that’s we try and get at, rather than partner types we talk about partner activities.”
Recent IDC projections suggest this level of maturity from channel partners is widespread and going to intensify in 2019. By 2020, 50 per cent of ecosystem partners will be in the late stage of digital transformation, and by 2022, 30 per cent of a business’ spend will be developed and consumed through ecosystems, meaning customers will welcome partners that help them innovate using more complex ecosystems with open arms.
These mature partners, explains White, more often than not have a predominant business model built around software creation, for example, but what’s happening now is they’re also adding a managed service around that capability. By 2020, 80 per cent of partners will perform all activities, further eliminating the need for partner labels.
“Their business mix is changing. So when we ask, ‘Where do you realize most of your revenue from? What are the activities you do?’ We’re hearing more and more that their capabilities have expanded,” says White.
Speaking of software development, by 2021, IDC says 90 per cent of partners will have created or acquired the ability to develop custom or packaged software. This coincides with the fact that by the end of last year, 74 per cent of partners had software development capabilities.
Almost every major trade show last year featured executives and channel chiefs on the main stage reiterating the importance of developing more software. Cisco has even gone as far as launching a developers program to help developers and IT professionals write applications and develop integrations with Cisco products. That program has grown to 530,000-plus members.
More giants making strategic alliances
Megaplatforms like Azure and AWS have managed to infiltrate what seems like every corner of the planet, which is why Microsoft and Amazon are choosing to form more strategic alliances with integrators, and sometimes other major vendors, to ensure their software products play well with others.
“It’s an interesting way to look at it…Microsoft looks at its own ecosystem and thinks ‘okay how do we drive growth?’ But then they also have to consider the fact that they play a role in someone else’s ecosystem,” he says, adding he expects this trend to continue.
VMware Cloud on AWS is an integrated cloud offering jointly developed by AWS and VMware. Seven years ago, that would have been unfathomable, says White.
“AWS is working with everyone now.”
We still need distributors
Ever since distributors were written off with the introduction of cloud, White – who admits he is a big fan of the role distributors play in the channel – says companies such as Ingram Micro have cleverly navigated those uncertain waters and added new capabilities, even some light integration skills, in order to maintain their faith among channel partners. He specifically cites Ingram’s Cloud Marketplace, an ecommerce platform and web store hosted and managed by the company.
“I don’t think any vendor is set up to manage the long-tail of the smaller partners and customers out there,” suggests White. “They don’t have the capacity to do that. That’s where distribution comes in and we don’t see their role going away.”