2015 Industry Outlook: 46 Ideas from Channel Leaders

Vertical Systems Reseller Magazine this month published 46 predictions for 2015 by Channel Executives of all backgrounds.

Here are my Channel predictions for 2015:

Tell us the most significant changes you saw occurring in the channel in 2014.

The most significant change is around market sizing and demographics. We all expected the channel numbers to rebound from the 2008 recession along with the rest of the economy.

We are down 36% in total channel companies world-wide with another 10 to 15% decline expected in 2015. 

The other piece is the average age of the channel continues to increase – even with new born-in-the-cloud vendors hitting the scene. It is expected that 40% of current channel professionals will retire in the next 10 years.

Even more significant, is that the 75% of the entire channel will be made up of millennials by the year 2024.

What do you think will be the most radical shift for the channel in 2015?

There are very few radical shifts in the channel. The transformation from client/server and traditional break-fix into cloud, mobility & managed services has taken almost a decade – with no end in sight.

However, the trends we are seeing today will create some radical shift in the years to come. For example, the managed services market has stagnated – with flat growth over the past 3-4 years. 

Only 12% of channel partners drive over 50% of their revenue in a recurring model. Predictions from a few years ago would have over 50% of them driving their revenue this way.

What must solution providers do to stay relevant in 2015? Give us your #1 piece of advice.

Channel partners have always been highly adaptable and tend to gravitate towards opportunity. The shift of over 50% IT spending from the IT department to lines of business have partners building new relationships with sales, marketing, HR, operations and finance executives. 

Understanding how customers buy is also key to stay relevant. 

Researching real-world trends around cloud and SaaS purchases in your industry and geography, not what they hype would tell you it should be. Also, understand that the growth of software recurring revenue models hasn't translated into services and hardware recurring at the same level.

Does your company have tools or resources that may give solution providers a leg up in 2015? 

We build a mobile platform with numerous tools that solve big challenges for channel partners. Working with over a hundred vendors, we have found new and innovative ways to communicate, educate, grow and motivate partners.

Another area we are investing heavily in is “big data” for the channel. Understanding actions and behaviors and being able to predict and prescribe next best actions. Measuring the success of channel programs has always been difficult and many of the direct sales tools that have come to market in the past few years don’t work well in this environment.

What top 3 emerging technologies will be most important to the channel in 2015?

The proliferation of mobile devices and the management around them will continue to be hot. The 

average customer has 3 devices each today and that is growing to 10 by 2018. The internet of things will get a shot in the arm with the launch of the Apple Watch in 2Q.

The iPhone convinced people they needed 2 devices in 2007. The iPad and e-readers increased it to 3 in 2010. The Watch and other fitness devices will increase it to 4 and 5 by the end of 2015. The channel opportunity is when companies find valuable uses for these devices in the business world and need them integrated into the corporate network.

Software defined everything, hybrid clouds and 3D printing will also take hold and be the source of new practices being built by channel partners.

Summary

While the channel is experiencing some of the biggest shifts in size and demographics that we have seen in 30 years, the opportunity to recruit, develop and grow a highly engaged and motivate base of partners has never been stronger.

Those partners that survived (and thrived in) the past 6 years with massive economic and business model turmoil, are incredibly well positioned to take advantage of opportunities in 2015.

As the cloud matures, fear and uncertainty in the channel has turned into anticipation and even excitement. The complexity of IT continues to accelerate and the opportunities are growing faster than ever. 

Even the barriers to entry are increasing, meaning that new competitors, fresh from their A+ certification, aren’t setting up shop in your town.

Read the full article here.

10 Must-Try Channel Growth Hacks for 2015

Welcome to the future. Not the flying cars, robotic future that the Jetson's envisioned, or even the hoverboard, self-tying Nike's from Back to the Future.

The future of the Channel is grounded in new demographics, new business models and new definitions of partnerships. I talked more about these in a previous post:

http://thevarguy.com/cloud-computing-channel-partner-program/082514/10-things-i-learned-about-channel-summer-part-1

It doesn't come as a surprise to Channel Professionals that things are changing faster than ever across the partner ecosystem. A perfect storm of new technologies, transforming business models, rapidly evolving competition, consumerization and economic forces have fundamentally changed the traditional supplier/partner relationship.

Bill Gates keenly said that we overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Let's focus here on the next 12 to 24 months.

Not only are things moving much faster, the relationships have become significantly more complex. Ten years ago, a solid email, portal, phone, advertising and events strategy was all that was needed to communicate effectively to partners and customers.

Today we have more than 30 marketing vehicles in play, and the level of noise and clutter is, at times, out of control.

So with that in mind, how do we plan for 2015? How do we recruit the right new partners, develop our current partners to be stars, and take our top performing partners to the next level?


1. Go Mobile

Five years ago the average partner had one device (usually a laptop or desktop). Today the average is in the 3-4 range including smartphones, tablets and perhaps a rudimentary wearable device. By 2018, top researchers predict that number to be 10.

Cars, watches, smart walls, and other devices will drive new types of partner interaction and provide the platform for innovative selling and support tools.

Top vendors today are using technologies such as GPS, cameras, video and social in new and interesting ways that would have been unheard of even a few years ago.

Over 65% of partners report they prefer to use mobile as a primary source of doing business. With over half of all internet traffic now coming from mobile devices, many Channel vendors and distributors do not have a viable platform to leverage and grab a competitive advantage.


2. Leverage Big Data

Is your partner program still segmented by historic revenue? Perhaps you are thinking that a survey or partner advisory council meeting will give you the secrets to what is happening out there.

In reality, there are hundreds of data points that allow you to understand partner performance and loyalty to your brand. If you were able to combine these into one powerful set of predictive and prescriptive analytics, what changes would you make in your program?

Your partners keep telling you that they want better communication and support from your team. That doesn't mean sending more emails - it means understanding your partner deeper and connecting in the way that they prefer.

What if your partner program was ultra-customized by individual person and company? Understanding the who, what, where, when, and why of each partner persona could be the biggest channel growth hack you can make in 2015.

3. Expand Automation

The recent surge in marketing automation popularity has not yet worked its way into Channel communication. The ability to set automatic triggers based on a partner’s behavior results in a new level of insight.

Scoring each individual partner based on their actions can improve future communication and content to be more relevant and focused.

The win here is implementing a drip campaign across the channel catering to each person based on where they are in the marketing/sales funnel.

4. Move Away from Partner Portal as Primary Contact

Surveys show that 95% of partners do not regularly use partner portals. In fact, unless they are forced to log in for deal registration or mandatory education to keep their status, many partners do not come at all.

Channel marketing and communication has increasingly become a push versus a pull exercise.

There is no magic in push - every individual is different and making your program easier and more accessible across the myriad of communication vehicles is a must (unfortunately).


5. Re-look at Communities

You think your company is complex to deal with? The partner ecosystem is large and diverse, with dozens of different specialties, business models and types.

There are many sub-communities that have formed to serve these differences. These take the form of associations, online forums, social media, media groups, vendor & distributor groups, user and peer groups.

Communities tend to be more focused and specialized and have people that support each other with common interests and challenges. What makes them powerful is the ability to influence through the implied endorsement of the larger membership.

In many cases, participation is the only cost of entry.


6. Put your Social Activities into Context

Social media is no longer the “new” platform and has proven not to be the utopia that was once promised.

That being said, social is very important and is a core platform for communicating with the Channel. It is a place to amplify content, handle real-time conversations and extend branding and promotion.

Running a mix of 5-6 social platforms as part of your overall communication strategy is important. Social media will provide a place where you can listen to your partners, engage on a different level and interact in real-time.

7. Educate your Partners - Stop Selling them

Content marketing is becoming one of the most important tools for recruiting and nurturing your Channel. Finding your brand voice and sharing your domain knowledge with your partners on a consistent basis will build trust and keep them plugged in.

When combined with #6 above, a solid piece of content will amplify itself across numerous channels and give multiple ways to re-purpose throughout the time period.

As the old saying goes, you can't kid a kidder. So stop selling your best salespeople. Strong content - especially technical in nature - will go a long way to driving attention.


8. Re-invigorate your Press Strategy

Much like communities in number 5 above, the channel media have cultivated strong followings across multiple vehicles.

Many vendors look at the media as a source of advertising and not much else.

Over the past number of years, industry media has been forced to expand their offerings and deliver more value to their readers and sponsors. Getting access to their community of readers through co-marketing, sharing your updates and content, webinars, events and newsletters can be a very effective way to reach your established and prospective audience.

It can be surprisingly cost effective as well with the right level of negotiation, time commitment and bundling.

9. Go Back to the Basics - Direct Mail

Yes, I said it. Direct mail!

Most companies have abandoned direct mail over the past few years as the number of marketing vehicles have exploded.

Depending on the size of your Channel, sending physical mail to partners can be a cost effective way to connect. Keep in mind the average age of Channel professionals has grown every year since the 1980s and this demographic tends to prefer face-to-face, mail and phone calls to electronic communication.

Sending out innovative and useful sales kits can be done for only a few dollars per partner (or prospect) and may cost less than attending a tradeshow. Plus, you can achieve a high open rate and your competitors are likely not doing it.


10. Double Down on Tradeshows

Many Vendors I talk to look at tradeshows as an industry "tax". It is an area where a lot of opportunity (and money) is wasted.

Some of the common errors include:

• Paying for platinum status without getting much more than a "logo on a page" in return
• Paying for a breakfast/lunch/party and getting small signage that no one notices
• Thinking that booth hours are where the real action happens – then the real action usually happens in the hallways and the hotel lobby bar late at night
• Not having a plan covering pre-show, show-within-the-show and post-show tactics
• Spending too much money on trinkets and giveaways
• Not having a visible leader in your business that can seek out the media, develop strategic partnerships, and recruit based on reputation alone.

The vendors who take advantage of the tradeshow circuit by avoiding most of these pitfalls report it is there number one way to grow channel revenue.

It all comes down to recruiting the right partners, developing current partners to be stars, and taking top performing partners to the next level.


Happy New Year - And good luck in 2015!