Channel Call

Channel Growing Pains for ISVs

The lower startup and maintenance costs, quicker return on investment and increased productivity of the cloud, particularly with the Microsoft Windows Azure platform, may greatly expand the number of ISVs seeking to build their own channels.

Those ISVs will see that the economies of scale of an indirect channel will allow them to reach more customers at lower cost, while generating higher returns.

These new opportunities for players with less-indirect channel experience will put new demands on both the ISVs and their potential resellers.

Dive Headfirst
In order to create an environment that generates higher returns, an ISV must maintain highly efficient systems, both internally and externally. For instance, any vendor who has a partner ecosystem needs to communicate better and facilitate healthy collaboration with their partners through lead registration, license management and opportunity management, to name a few key components.

In short, I'm talking about Partner Relationship Management (PRM). Making a truly bidirectional relationship, whether you're a reseller or a vendor, will ratchet up your productivity. Making the technology cloud-based will also ratchet up your efficiency as you'll be able to deploy faster, communicate quicker and produce more. Therefore, as a reseller or a "vendor to be," dive headfirst into cloud systems that allow these actions to occur.

Joint Responsibility
Second, there needs to be a better way of enabling the resellers of a vendor. The faster a reseller is enabled, the quicker they can engage customers, which means the quicker everyone can recognize revenue. I often hear about how vendors are disappointed in the speed, or lack thereof, of their partners getting fully ramped up on the vendor's technologies.

In my humble opinion, responsibility for enablement rests on the shoulders of both the vendor and the resellers. Traditionally, people think it's solely the former's job. While the vendor needs to provide the tools, training courses and certification opportunities to the reseller, the reseller needs to be proactive and take advantage of all the tools.

Herein lies the industry dilemma. Both groups need to shift from being reactive to becoming proactive. Vendors think that if they build it, resellers will come and take advantage. Resellers feel that the vendor cannot expect them to get up and running quickly unless the vendor works more with them. Mind you, this is not true for all vendors and resellers -- just a majority of them. How can this be fixed? Into the cloud we go!

Vendors need to be constant in their enablement and resellers need to have the enablement at their fingertips.

Rubber Meets the Road
The third leg of efficiency and productivity -- demand generation -- exists where the rubber meets the road. The entire reason for the vendor/reseller relationship is revenue, and it comes from demand-generation activities. This area has always been difficult because both parties expect more from the other party. Meanwhile, because of cost-cutting measures over the past several years, resellers have been forced to trim all areas of their businesses, including marketing. Even with a small staff, it's very difficult to adequately do list generation, search engine optimization, public relations, advertising and campaigns.

With the cloud, it becomes easier, especially utilizing a cloud-based platform such as MarketingAdvocate, whose system in essence aggregates all of the aforementioned marketing initiatives into one spot -- to make it simple for a reseller to conduct demand-generation activities on their own.

The same cloud trend that makes it more attractive for ISVs to build their own channels contains solutions to the challenges those new vendors and their resellers will face -- for those ISVs and resellers forward-looking enough to seek them.

Next Time: More on channel development

About the Author

Keith Lubner is managing partner of Channel Consulting Corp., a N.J.-based global consulting organization focused on channel strategy, design, enablement, outsourcing and training for growing companies.