Channel Marketing – Failing to Deliver?

As you know, I have been quite critical about the UC vendor’s Channel Marketing efforts over the last few months. Apparently, I’m not alone… Sam Trendall published the article, Vendors Failing to Equip Resellers in CRN, highlighting some key findings from a channel study conducted by consultancy Demuto:

• Less than one in 10 VARs feel they have a "relevant account plan" with their vendors
• Less than one in 10 claimed vendor marketing material was always suitable for use with clients.
• Two-thirds of VARs claim they have no input into channel strategy.

Although this is very alarming data, the vendor’s have had the criticism coming for a while. During the summer I published the whitepaper, Unified Communication: Capturing the Growth Wave, where I criticized many of the UC vendors for how they managed and supported the channel during the economic downturn. I also came out swinging in the blog post, Who is speaking the language of the customer? Reviewing several of the vendor’s sales collateral or web sites at the time, it was clear that vendors weren’t paying attention to how the market had changed.

In August, I wrote a article about UC vendors needing to recruit and develop new sales channels. Surely, technology disruption and hard economic conditions had a negative impact on the indirect sales channels, yet nothing was really happening.

But there is progress as well... I’m actually seeing more Channel Marketing activity by several of the vendors now than just a couple of months ago. A few of them have launched a new and simplified version of their partner program and there has been a lot of recruitment activity. But, I’m still critical about the resources and efforts dedicated to developing new or key reselling partners. Vendors need to claim ownership for what their markets are and lead their indirect channel to it. The resellers will merely fulfill the demand.

What do you think, is Channel Marketing delivering enough value to the channel?

Cloud Based Communication Services- Part 2

Greetings,

Thank you for all your comments and email messages in response to my blog post Cloud Based Communications Services. As a follow up I wanted to elaborate a bit on one service provider (part 2) and one vendor (part 3) I believe are making the right moves in the voice and unified communications market. Of course, the premise for these articles is that the focus on cost control and increased customer demand for OPEX based solution will continue to drive adoption of cloud based communication services.

In a world where communication capabilities are offered as a service, service providers of different types are poised to benefit. I for one think that Vodafone’s entry into Europe’s enterprise communications market is a very interesting and exciting development. Quite frankly, as mobile and IP based communication technology converge, this is a natural yet bold move by Vodafone. In the case of Vodafone, its primary objective is not just to monetize its mobile network infrastructure but to deepen the commercial relationship with the enterprise market. Through its acquisition of Central Telecom, a multi-vendor solution provider and system integration firm, Vodafone will be able to provide customers the full range of unified communication (UC) capabilities, either as a service or as CPE. Its inherit ability to bridge the gap between the mobile and fixed IP networks is yet another differential value proposition. With its recent hosted UC service, Vodafone OneNet, targeted at small and mid-sized business, Vodafone can offer business customers both simplification and cost reduction for their communications needs. Down the line I’m convinced that Vodafone, together a fixed line provider, will be in a position to attract larger enterprise customers with managed UC services as well.

The biggest challenge I see for Vodafone is its ability to develop an attractive channel proposition such that other businesses which can thrive and prosper by selling and enhancing its communication services. Vodafone needs a well functioning eco-system of different types of business partners, such as value added infrastructure and application providers, system integrators, resellers and influencers, to further its business and cover all distribution paths to the customers.

So, is Vodafone going to become a dominate player in the enterprise communication market? I think the word dominance is too strong but they will likely be a contender. With cloud-based delivery gaining momentum, the benefit Vodafone and other service providers have is that they already have much of the costly operational and business support infrastructure in place. So, if cloud model for aggregating, delivering and consuming voice services, voice based applications and infrastructure takes holds, Vodafone has a fair chance at grabbing meaningful market share. However, Vodafone will not be able go it alone. Whether they can build a channel proposition and develop an indirect channel capable of aggregating, influencing and selling, remains a question. But so far, I’m certainly impressed with its strategy.

What do you think... As a consumer focused mobile network carrier, will Vodafone have the "market permission" to deliver a wider range of communication services to the enterprise market?

Reseller Dilemma

Folks, it’s becoming increasingly clear to me that cloud-based IT and communications delivery will become a major threat to reseller serving the small and mid market customers, unless they adapt and quickly augment their business models. David Pratt, the COO of ThinkGrid, recently wrote a very insightful article for CRN called; What future lies in the Cloud, where he discussed the reseller dilemma in “cloudy conditions”.

To capitalize on the cloud wave, resellers must master the art of selling capabilities and value as opposed to selling gear and software. Have you heard that before? Of course you have, but a reseller’s ability to fully embody this becomes pivotal when there are choices in delivery models. What I mean here is; as a reseller of unified communication, the whole organization needs to be fully prepared and able to deliver those capabilities as a service OR as premised based equipment and software licenses. This is where complexities set in. Transforming a business model and its organization which is hard-wired to sell customer premised based solutions into a service based business is quite daunting. Every corporate function of the business needs to change and adapt in order to be successful in the cloud.
Mr. Pratt also makes a great point when he says that the hosting and cloud infrastructure companies don’t typically have the customer relationship and unique customer knowledge that the resellers have from years of serving a particular market. As such, the hosting and infrastructure companies are potentially great partners for traditional resellers entering the cloud.

The resellers in the voice and data space have gone through demanding transformations before. However, the business transformation required to adapt to cloud-based delivery will perhaps be their biggest challenge yet.

Are there resellers out there willing to share their experiences or comment on the challenges?

Cloud Based Communication Services

Hi Folks!

I've been doing a lot of thinking and speaking to people about what it will take to win, or rather, become a market leader in the cloud based communications market? Which enterprise unified communication vendors and service providers have made the market investments and moves towards delivering communications capabilities as a service? Which providers will be the winners? How will the business of the unified communication vendors change? In a series of articles I'm going to share my view and opinions on what’s happing in this space.

Even if it’s still early in its evolution, sourcing communication capabilities as a service as opposed to buying, integrating and managing premised based equipment is more viable than ever. It’s primarily the current economic climate and focus on cost control that has escalated the rate of adoption of cloud based communication solutions. The increased demands for OPEX based solutions certainly help generating a lot of interest. In addition, while the use of sophisticated communications and collaboration capabilities is often a strategic part of conducting business, it’s rarely a core competency. Result: vendors and service providers of varying types and sizes are hurrying to take advantage of this evolving market.

A historic inhibitor to adoption and growth of cloud based voice and unified communication services are that sceptics and “nay-sayers” have been making lots of noise. Concerns for data security, integrity and privacy have been the most common arguments. All I have to say here is; Come on, look at SaleForce.com. They have convinced hundreds of large global corporations to buy into their CRM solution, delivered as a service. What can be more sensitive than trusting a 3’rd party to control and manage all kinds of data records and correspondence with customers and partners? Yet, SalesForce.com has been very successful and today sports a market cap of more than $7b. I think we have crossed the chasm and corporate customers will now seriously consider cloud based unified communication services.

Even with some customer concerns lingering, as I see it, the biggest inhibitor to growth lies inheritably with the vendors and service providers themselves. In order to execute on the cloud opportunity, vendors and service providers will need to augment their business models and channel strategies. The fact is, the notion of cloud computing represent an open and democratic (so far…) infrastructure to build upon, or a clean canvas on which vendors and providers can paint their technology vision. Thus, the cloud has opened the floodgates for service innovation and market disruption. This disruption will quickly force vendors and service providers to seek new ways for aggregating, selling and delivering communications services.

Lemon-Operations, a services company focused on recruiting, developing and managing indirect sales channels for IT and communications vendors across Europe and United States, is doing a lot of work for vendors who want to win in the cloud. I think Lemon-Operations metaphor for what’s happing in the cloud space is quite astute: While service innovation is shaping the IT revolution below the Cloud, vendor Galaxies will fight it out above the Cloud.

The key to success will be for the vendor to establish themselves as a center-of-gravity, or a Galaxy, to which other technology partners and resellers are attracted. To continue with the metaphor, the intensity of a vendor galaxy’s gravity will depend on to which extent other technology partners, resellers and influencers can grow and prosper within that galaxy. As such, the vendors need to get on-top in the value chain by developing compelling value propositions that attract many other types of businesses and partners. Further more; this will require new partnerships and contractual arrangements with infrastructure partners, technology partners, resellers and influencers. Put simply, establishing market leadership in cloud based communications market will require an augmented business mode, a much different eco-system and much more diverse indirect sales channel.

What do you think? Which vendors and service providers are in a position to establish the greatest and most influential Galaxy?