How Long Before the Cloud Blocks Out the Sun?
How is the Channel Partner experience changing?
Change seems to be the only constant in the unified communication and collaboration environment these days. There’s always something new and exciting on the horizon, for collaboration tools, to video, artificial intelligence, and analytics. Even the way that companies go to market with their communication strategies is evolving at an incredible pace.
Not so long ago, Channelnomics highlighted the fact that Microsoft recently changed its go-to-market strategy for cloud sales. Microsoft is actively shifting more of its Azure cloud services into the Azure marketplace, removing the need for things like channel partners entirely. People can simply buy what they need from Microsoft directly, using a new Microsoft Customer Agreement.
Similarly, Cisco and other brands have indicated that they may be looking in the same direction. It seems that whatever the IT sector does, moving to things like direct sales and channel-free selling, the communications sector is not too far behind. I spoke to Colin Mann, the UCaaS Cloud Channel Marketing Director for Mitel, to see what he thinks about this change in the channel model.
As countless vendors in the communication marketplace continue to look at new ways of adapting their Go To Market model, I was keen to get Mitel’s opinion on the emerging space for channel partners. The focus on direct sales and dealer/agent sales is growing, with even companies like Cisco suggesting that they’re going to start selling their cloud phone system through Webex.com this year. Colin told me that although Mitel hasn’t made any dramatic changes to their Go-To-Market strategy, with a two-tier distribution model being Mitel’s route to market, the business can also see the change that’s happening in the space.
“We’re doing more work on the cloud lately for our channel partners, taking some of the extra pressure off their shoulders. This is having an impact on the channel because we’re doing more of the heavy lifting for our partners.”
For brands like Mitel, there’s still a lot of value in the channel. For instance, Colin told me that a big benefit of the channel is the scalability that it offers. With an established channel community, Mitel can get their products out to a much broader population. “Additionally, the channel can sell extra value that we don’t sell. For instance, they can align our products with connectivity, CRM, security, and other complimentary IT products that deliver increased benefits to the customers.”
Is the Role of the Channel Partner Changing?
Colin told me that traditional channel partners have often focused mainly on selling a PBX and need to be looking at customer needs from a more holistic perspective to create more opportunities to sell a range of value-added services. However, going forward, it seems that channel partners will need to focus more on how they can add value to the customer experience. In other words, channel partners won’t be just reselling products, they’ll need to offer unique and specialized services so that they can stand out from the crowd.
As the SaaS cloud-focused model for communications becomes more prominent, this is going to have a significant impact on the channel partner. Already, Mitel is starting to see the results of this shift as they begin to handle more of the cloud-based work for their channel partners. “I think we’ll see a number of different kinds of channel partners emerging in the years to come. There will be some channel partners that become sales and marketing engines. These are the companies that can give up on the engineering and provisioning side of things and focus exclusively on sales and marketing.”
Colin noted that he also believes that more IT professionals and cost consultants will be moving into the cloud communications environment too. People who aren’t traditionally in the telecommunications reselling environment will find that it’s easier than ever to embrace cloud and start offering it to their customers. The current climate is becoming a lot closer to the agent model that’s been so common in North America for many users.
“I think we’ll see more and more channel partners evolving to sell a combination of on-premises and cloud-based solutions too. This will be a big opportunity among enterprise partners that deal with larger companies that can’t simply switch to the cloud overnight. Some partners will also choose to stick exclusively with their on-premise PBX rather than move into the new cloud model.”
According to Colin, the rise of cloud and SaaS go-to-market strategies means that traditional resellers may need to start thinking about giving up emotional ownership of their customers.
“Some channel partners still feel like they own their customers. However, they’re starting to realise that the truth is that their customers own all of us”
Are Channel Partners ready for the eCommerce Model?
Over the years, countless UC vendors have built their brands on top of valuable channel partnerships. However, it seems as though some of the most successful companies in the space, including Microsoft, Cisco, and others are beginning to re-evaluate the value of the channel partner going forward. Some companies are starting to think that it’s easier for them to deliver the products they offer straight to the customer through the eCommerce model and skip the channel partner entirely.
Today’s customers can now purchase Microsoft Teams online using a completely self-service model, and Cisco is exploring the idea of a similar approach in the future with Webex Calling. As Colin told me, “End users are seeing that eventually, they’ll be able to buy all the products that they need online. This is something that’s making the channel uncomfortable, because it reduces their access to certain market segments, especially at the very small end.”
Mitel isn’t taking the eCommerce approach to selling its solutions. Instead, the company just offers an online quote solution for end customers. “We think that this way, we’re giving the people the easy eCommerce experience they want with a quote to kick off their experience. However, we’re not cutting out our partners because they fulfil the quotes and orders.”
With so much evolution happening in the communication GTM environment, channel partners will need to start putting strategies in place. Colin told me that one of the things he would be doing as a partner, is moving away from thinking of himself as a reseller of products and moving into a position where he presented himself as a value-added provider.
“Channel partners can’t just resell anymore; they need to wrap in extra value like security and IT features too. The value of the cloud is that you can integrate so many additional applications”
Colin told me that channel partners need to think about the kind of business models they want to adopt. “There’s a different approach required in UCaaS. The sales cycle is much shorter, and partners will need to think about what kind of people and engineers they’re going to need on board. It’s also worth looking for pockets in the market that you can really specialise in.”
Mann told me that one of the biggest benefits of UCaaS is that there’s virtually no set-up cost for new partners, so anyone can go out and give it a go. Companies in the cost consultancy market and IT space are already discovering how simple it is to add UCaaS to their own offerings.