The software company-reseller relationship has undergone a marked evolution due in large part to the uptick in the popularity of cloud computing. Before the cloud became the preferred delivery method for software and services, consumers deployed hardware and utilized software in an entirely different manner.
Utilizing IVR technology, it is possible to illustrate the evolution in deployment models. Prior to the cloud, technology companies would produce both the software and hardware needed to power IVR systems. Channel partners would then purchase the IVR system from an IVR company and resell the technology to an end user/company, and in many cases help with the set up and deployment of the system.
Companies looking to procure technology would work with vendors who acted as resellers (as opposed to working directly with those producing the technology directly).
Cloud computing has ushered in an evolution in the sales and procurrment process . Information technology no longer typically operates as an onsite system, but instead is hosted in ‘the cloud’.
As Jim Burton mentions, in his piece Channel Faces Challenges—Do vendors get it? for NoJitter, prior to the rise of cloud hosting, there was distinct hierarchy in business relations between producers, resllers, and consumers. But per Burton, “the communications and collaborations landscape has changed considerably in recent years”.
As Burton aptly notes, technology is becoming increasingly virtualized and onsite systems are no longer the preferred method of data storage and delivery. The majority of information pertaining to pricing, delivery and functionality is available via a producer’s website. The demand chain for the cloud starts and ends with Google. Consumers need only conduct a search to understand exactly who the best tech providers are and what the best price point is for their desired technology.
This puts channel partners at an extreme disadvantage, because more often than not, end users would prefer to host their products with the primary producers and cut out the middleman due to considerations of both price and convenience.
Per Burton “In the past, the channel sold “boxes” and now they must reposition themselves to sell services and solutions. In most cases this will require the channel to re-train or turn over their entire sales force. It is rare to find a successful box salesperson that can be transformed into a consultative salesperson.”
As cloud communication services become increasingly favored (and as companies shift their preferred technology delivery method) channel partners will add less value. So how can resellers combat this trend that eliminates them from the sales and delivery cycle?
They will need to add value via their business and delivery models. But how? Stay tuned for Maximizing the Channel-Partner Relationship…