Learn how IT solution providers and system integrators are adapting marketing efforts to match new market dynamics and customer demands driven by changes in the channel, including the emergence of the strategic service provider model, next-generation managed services and the evolution of the buyer’s journey.
The Changing Channel
The solution provider business model is undergoing a massive transformation that is impacting go-to-market strategies, sales approaches and partner relationships for today’s IT system integrators and service providers. Critical channel changes, including the rapid emergence of the strategic service provider, next-generation managed services, application development and business-specific services, require awareness and strategic action by solution providers and system integrators who wish to stand out and deliver ongoing value to their customers. It’s a crowded field.
Today’s OEM suppliers are onboarding more channel partners than ever before – and for good reason. Indirect channels account for almost 70% of overall technology sales, a steady 17% increase over the previous ten years.1 Solution development and implementation is driving this channel growth – Customers are requiring their vendors to supply a holistic solution, not just the individual parts.
Customer conversations have also changed dramatically. Today, buyers are farther into their journey before engaging with marketing and sales professionals. They are searching for valuable content that provides insights and thought leadership. Quality marketing content becomes a strategic differentiator. Pre-sales research is now done digitally, more independently and customers are asking for business-based content over technical information. Instead of talking about speeds and feeds, solution providers and system integrators must illustrate operational efficiencies and return on investment (ROI). Customers have organizational problems to solve, the technology is not the focus. This requires more training on the sales side and creates an ongoing demand for compelling customer content that demonstrates a provider’s expertise, articulating the business benefits of solutions and market understanding, often with reference to customer success stories to illustrate performance.
Business Model Evolution
OEMs are changing the way they evaluate channel partners. Instead of simply measuring sales volume, they are looking for growth opportunities within the channel. To generate interest and investment from OEMs from a long-term growth perspective, sales and marketing need to be in lock-step to gain market momentum. There’s no better time for marketing to be a true partner to the sales team, working together with sales to uncover opportunities and identifying which solutions best meet the needs of the current marketplace.
Significant data center transformation and the dramatic rise of cloud, Anything-as-a-Service (XaaS) IT models demand a shift in strategy. Solution providers must deliver truly innovative solutions that often draw from multiple OEMs and integrate seamlessly into established IT environments, which requires organizations to broaden their own partner ecosystems. Harvard Business Journal recently noted that the shift from traditional business pipelines to platforms (that often bring together multiple suppliers, producers and consumers) is transforming competition and requires new strategies, including a shift in focus away from just customer value to nurturing and measuring broader ecosystem value.2
Moreover, with the emergence of the strategic solution provider model, it’s no longer enough to provide hardware and software solutions to clients. Everything must be accompanied by strategic services that streamline deployment, speed integration and maximize ROI. Managed and professional services are no longer an add-on but a must-have for customers and a requirement for solution providers and system integrators to stand out within a competitive marketplace. Communicating this complex model in a simplified manner is challenging, requiring multiple touch points to illustrate value.
A continuing challenge for small and mid-sized solution providers includes working with limited marketing resources and competing for marketing development funds.
Solutions (and Services) Change the Game
When strategic sales come into play, sales cycles are much longer than they were for straightforward solution sets. While OEMs are used to 30 and 60-day sales cycles in a product-based environment, newer solutions and, particularly, XaaS offerings, take longer to gain traction with customers, sometimes upwards of 18 to 24 months. Therefore, system integrators can’t be expected to turn on a dime in today’s market. In a solutions -based environment, it can take upwards of three to six months to do everything required, including due diligence, creating and executing marketing plans, training sales staff and more to enter or accelerate in a market. Therefore, strategic planning is essential.
In a solutions and services-based market, identifying and driving connected value between partnerships must be a top priority. With so many OEMs partnership opportunities, small and mid-size solution providers have to be more strategic about the OEMs they choose to work with based on history, new opportunities or even available co-marketing funding. Otherwise, mindshare and resources get diluted, programs don’t measure up and both sides of the channel get frustrated. Currently, there is great emphasis on tracking ROI to showcase results from investments. OEMs must be more proactive in supporting the solution providers they choose as channel partners and drive a win-win partnership for growth.
Establishing Relationships that Work for Both Sides of the Channel
As business models evolve, so do the relationships between system integrators and OEMs. Both must actively contribute to establish and nourish relationships that are rewarding for both sides of the channel. To ensure positive and profitable partnerships:
- Focus on Communication and Collaboration
Teams need to meet regularly to discuss overall strategy, new solutions, upcoming campaigns, and measure what’s working along with what isn’t. The most profitable partner relationships are open and have a regular cadence to review and refine co- marketing campaigns. As channel partners are tasked with reporting what they’re doing for OEMs, OEMs should also be sharing what they are doing in market so that channel partners and solution providers can augment the message to maximize results. - Define KPIs and Set Clear Goals
To avoid confusion and disappointment, it’s important to define key performance indicators (KPIs) and set clear short, intermediate and long-term goals from the start. OEMs need to realistic about the longer sales cycle cloud and XaaS solutions require and must also provide support, training and adequate funding to help channel partners market XaaS IT effectively. - Remember that the Customer Comes First
Nurturing rewarding customer relationships calls for compelling, educational content delivered online through a variety of marketing tactics with social media to support today’s self-empowered buyer. Education-based content such as eBooks, white papers and solution briefs that illustrate how solutions solve specific business challenges are highly effective.
There is no denying this is the age of the customer. Customers today are more educated about purchasing decisions because of the plethora of information available to them. It’s critical that we embrace the age of the customer by understanding customer needs, and, ultimately, the business problems we can help them solve. Keeping the customer at the forefront of our marketing initiatives will ensure a winning combination and long-term relationship.
2 Harvard Business Journal. “Pipelines, Platforms and the New Rules of Strategy.” April 2016.
About Liz Anthony
Liz Anthony has over 20 years of experience on both sides of the channel implementing marketing plans and strategic communications programs across the globe. She is currently Senior Vice President of Marketing for ViON, a leading systems integrator delivering customized IT solutions and best of breed offerings from the world’s premier OEMs. Prior to ViON, Ms. Anthony served as Senior Manager at Cisco and NetApp, where she was responsible for the U.S. Public Sector strategy and developing integrated programs with key partners. While at NetApp, Ms. Anthony managed sales enablement for SAP globally. Having owned her own marketing consultant organization for over 16 years, Ms. Anthony is a passionate, long-time advocate of women in business. She is a proud member and former board member of Women In Technology, serving as a Board Consultant and Communications Chairperson, and is also a member of the AFCEA.