Every technology vendor is moving, or has moved in some way, towards a service model. Software vendors offer Software as a Service. Hardware vendors are moving to software models.
What does that mean for Partner Programs? How should partner engagement models change in order to support and drive new business models of this type?
PRE-SAAS SOFTWARE PROGRAMS
Let’s look at the software sector, where the Software as a Service model is well established.
Pre-SaaS partner programs typically featured Resell as the core indirect sales model. Resellers bought and sold one-time software licenses. Many programs also featured OEM and Referral as secondary models.
OEM programs focused on relationships with other vendors who could embed the software solution in their hardware or software, and who could therefore drive sales through their routes to market. Referral was for developers, consultants and service partners who might hand off customer leads in exchange for a percentage of the value of the sale.
Legacy software partner programs have been slow to change. Even though vendors have redesigned their solutions for SaaS provisioning, and moved clearly away from one-time licence sales, their partnering models have not kept up.
BORN IN THE CLOUD
Many companies look to the partnering models of ‘born in the cloud’ vendors, like Salesforce. But it’s not simple redefining a channel relationship with hundreds, or in some cases thousands of partners who value program consistency, and who are themselves struggling with the sales and commercial models associated with SaaS.
MORE AND LESS
As a guide, we can look at the Partner Program changes associated with moving to Software as a Service as LESS and MORE. Most vendors can’t jump right from where they are to a ‘born in the cloud’ Partner Program model. But they can focus on the key changes that will get them there.
The first LESS is Resell. Born in the cloud vendor programs don’t feature Resell. It’s not relevant to most service-orientated routes to market. SaaS solutions are usually provisioned directly by the vendor to the end customer on-line, so the role of the partner in the sale is very different.
Which gets us to the first MORE, which is Referral. Paying partners for finding leads, and for ‘Coselling’ alongside the vendor, is the new normal. It’s the new core model. This means that there will be MORE deal registration, because vendors need deal visibility in order to work with partners to close sales. And that in turn means MORE customised joint sales activities with partners, and LESS off the shelf ‘one size fits all’ campaign activity. If you manage a co-marketing fund, take note.
Partner enablement changes too. Enablement is LESS about training a channel partner to sell, then let them loose. It’s MORE about continually equipping the partner with the tools and skills to develop customer opportunity. That means MORE thought leadership content. It also means MORE focus on marketing and demand generation, and LESS focus on pure sales skills.
SaaS Partner Programs are generally LESS about volume and MORE about value. That’s why most vendors with large numbers of channel partners have segmented and rationalised their channels over the last year or two. MORE of the program budget is invested in a smaller percentage of partners.
MARKETPLACES
Large platform providers, like Salesforce, Microsoft and Amazon Web Services, have application Marketplaces. These Marketplaces offer partners the opportunity to promote their software or services to enterprise end customers. The partner is usually required to optimise their application to run on the chosen platform, and to meet security standards. If approved, the partner’s application or services is listed so customers can find it, read reviews and purchase.
Saas Partner Programs place greater emphasis on Marketplace-style Partner Locators. Old-style Partner Locators, which use partner location are LESS relevant, MORE relevant are tools that capture customer needs and recommend partners based on capability.
SUMMARY
Here’s a simple checklist for transitioning your Partner Program to cloud-ready:
• Program Model: less Resell and more Referral, more deal registration and more Cosell.
• Channel Marketing: less ‘one size fits all’, more joint planning, more customization.
• Enablement: less focus on sales skills, more focus on demand generation and leadership.
• Segmentation: less volume and more value, more investment in opportunity partners.
• Locator: more Marketplaces, more capture of customer needs and partner matching.
Kovendi works with mature vendors who are transitioning their Partner Program, and with fast-growing cloud vendors who are building indirect routes to market. Contact us to know more.