Dec 302013

Miller Heiman has a short article on Channel Trends for 2014.

For someone who is on both sides of the aisle – direct sales and channel management – the article seems correct yet overly simplified.

The trends, according to the article, are:

  • Channel sales will continue to increase
  • New types of channels will emerge
  • The wall between direct and channel sales will continue to crumble

The tendency to foster and nurture an indirect sales route is congruent with the nature of the modern market. The world is tilting towards selling many with less margin. It is a volume play. Yes, exceptions always apply. One example is Tesla, which is selling cars directly. The company has been subject of lawsuits from car dealers trying to stop its direct sales route.

The article’s title is a misnomer however. While the tendency is there the trend does not belong to 2014. It has been ongoing for a good many years.

Additionally, the case for Cloud Рwhich is addressed Рis not as clear-cut given the costs, direct (i.e. margins, recruitment, education and marketing) and indirect (resolving conflicts, manpower and expertise), any company would incur.

The old ‘capital expense versus operations expense’ argument also applies. Cloud is less expensive to start, but from a purely dollar figure perspective it soon adds up to more. A better argument is made with factors such as upfront costs, management and ancillary expenses.

Here it is: