It seems redundant, and even mildly amusing, to write about the value of the Cloud/xAAS and what the technology can offer a business in 2020. It is not all rainbows and butterflies and there are down-sides to this upheaval, but it is not an exaggeration to write that Cloud – and all its morphed categories – has had a profound impact on the way we consume technology and derive daily value.
My teams and I worked at Microsoft in the early 2010s. Microsoft was introducing, launching, operationalizing and commercializing Cloud products like Office 365 (now Microsoft 365), Azure, Intune and others and simultaneously shifting millions of customers from on-premises Dynamics and its BPOS and Lync services (anyone remembers the play for time strategy that was “software-plus-services”?) to the new Cloud offerings. The time-line was aggressive, quotas and targets were nearly insane and there was so much to do and propagate both internally and externally.
One critical aspect of this was to drag the partners along for the ride. Famously, some 95% of Microsoft’s business transacts through a reseller of some sorts and bringing them along was imperative. Part of the trick was to get ‘pull’ demand from end-users, which is a time-honoured Microsoft drill. With billions of dollars and millions of customers flowing through thousands of partner resellers the stakes were high.
This is fodder for another post, but there are many ways a company, and not just Microsoft, can monetize an ‘as-a-service’ model. Subscription is just one of them. More of everything is another. Connections (commonly known as APIs), an ecosystem and reporting services are others. It is critical to enforce and reinforce the model among the partner base of the company because most companies are not in the position of doing it themselves. They either have traditionally relied on ‘resellers’ to earn money and ‘channel’ their offerings or newly need the expertise and scale of a channel to make the business work and stick.
With that in mind here are steps on how to launch and maintain, as well as examining the factors needed to improve, a Cloud Channel Partner Program. In the process the main thing to keep in mind is that a good traditional Partner is not necessarily a good Cloud Partner. The revenue model, the production of services and the consumption of the benefits follow a different trajectory. Microsoft, SAP, Sage, Salesforce, Oracle and others all pursue and accommodate for this to some degree and at varying degrees of success.
Without further ado here are the elements years of selling and managing Cloud teach us are imperative for a Cloud Partner Program.
- Do not exclusively rely on the ‘Push’ model. The ‘Pull’ or demand side needs consideration, work and marketing. The benefits’ statements, the buyer personas and messaging needs to be revamped. While most IT companies relied on selling to the technology folks it was a rude awakening when they found themselves flanked by Salesforce, which had pulled the rug from under their feet and knocked on the doors of the Sales and Marketing departments. Is the product ready and able and have all the commercials been vetted from an end-user perspective? Sage threw in ‘free’ goodies to convert customers. In all weather conditions – Cloudy or not – the customer experience is critical. Multiply that by a magnitude for a changeover and successful conversion.
- Can your partner work with and articulate consistent technological change? Cloud solutions are always on and always being modernized. Can your partner keep up with this change and the defined process for handling, absorbing and passing on this knowledge between vendor and partner and partner and consumer in practice? These aforementioned factors fall in place only if you have asked for and received true buy-in – then verified it. With that in place the partner, as your organ and megaphone, needs to be vetted as it was when the partnership was initially instituted.
- What about a scalable commercial process? Is your reseller/partner/ecosystem in-tune with the revenue delivery model? Are the definitions completely and verifiably understood and rigorously followed? This change management is critical. As distinct, but related, companies the Channel and you are joined at the hip, but are separate entities. There can be no decoupling now or anymore. Have you thoroughly defined and coached the channel on how this whole thing works? At Microsoft everyone was consumed with pushing material, collateral, training, business justifications and methodology out to the ecosystem. People fanned out to partners of all grades to make the change and happen and stick. Crucially, and let us be frank, Microsoft succeeded no small part because much of the early adopter business was bought by another name. Call it MDF, Co-op dollars, training allowances, financing services and complementary ISVs, call it whatever.
- This one is the easiest to articulate so I will keep it short: As with any partner program how will your Channel make money?
There is another point that I deliberately left to the bottom of this post. In the early days of the SAAS model many observers and pundits laughed at the Channel and predicted its demise. In fact, what time and experience has shown us is that partners are suitable for this brave new world. No one is laughing now. It is just that a different kind of partner is desirable.
Things That Need To Go Away: Launching And Shoehorning Cloud Partner Programs Without The Necessary Preparation. It is better to skip the approach and sell directly absent the footwork.