The days of “selling” technology solutions could be coming to an end, with most decisions on what to buy made long before the customer even engages with the partner or vendor.
By Kathy Gibson
Karl Meulema, senior vice-president: global channels at Riverbed Technology, points out that 65% to 70% of enterprise end users have decided what they want to implement before they call in a partner.
However, IT is still the fundamental enabler of digital disruption and it’s important that industry players understand their role, and stand ready to help their customers on their transformation journeys.
“Every company in every industry is now subject to disruption – even the disrupters are not safe,” Meulema says. For instance, Napster disrupted the music industry but was then superseded by iTunes, which has since been disrupted by Spotify.
“This means a lot of companies have had to dramatically change their business models, across all industries,” he says. “And IT is an important component of that, creating and fuelling the opportunities.”
In this environment, one thing that is not debatable is reliable connectivity, he adds. And it’s more important than ever in the cloud environment where there are so many more areas where things could go wrong “In the cloud you don’t even know where the physical server is, so the clarity of how to manage it is gone.”
For the channel, this means they can no longer simply take what vendors offer and stitch it together to remove the complexity and cost associated with a working IT solution.
“What is changing now is that customers don’t want solutions, they want outcomes,” he explains. “They don’t care how you do it, but it needs to be predictable and measurable.
“So the partner profile needs to change. They need to move away from providing services to guaranteeing outcomes.”
He points out that partners have matured considerably over the last few years, and many have evolved to be more service-centric, with better profitability.
“The problem is that the services they deliver are IT services – and that has to shift to outcome services.”
To do this, he says partners should aim to move to verticalised models. “Pick a selected vertical market and work at understanding what the customer needs for his business, and ensure that you are able to deliver the required outcomes.”
This isn’t easy, he adds, and there will probably be a lot of consolidation in the industry. “It’s not an exchange of skills; it’s an addition. The need for technical skills doesn’t go away, but partners now need to be IT and business specialists.”
Within customers, technology decisions are no longer the preserve of the IT department, Meulema adds, with line of business managers now taking an interest. “And they have budget. It might not be IT budget, but it’s budget that creates IT spending from a different angle.
“It means that, rather than speaking to IT people and talking IT language, you have to start speaking business language to help customers understand how the technology can help them and improve the user experience in a way that can be properly measured.”
Riverbed has changed its own channel programme to address the changing market environment, he says.
“We have always been a technology-driven company, with a top notch product,” Meulema says. “So we looked at resellers as a fulfilment engine, going the last mile with the customer, but not really an active part of the sales process.”
Riverbed is coming from a position where it had 2 700 partners, many of them selected opportunistically. “But we started to realise that we are not relevant to these partners. They will book orders with us, but most don’t invest in us or build their expertise in our technology.”
The company has decided to refocus the majority of its business with fewer partners, and ended 2016 with just 1 000 active partners worldwide. However, 80% of the business now goes through just 100 partners, compared to 170 before.
“We are being dramatically selective in how we do business, and in each of the sales regions we are looking at the four or five parnters we should be doing business with,” Meulema says.
In South Africa these are First Distribution as the only Riverbed distributor, Dimension Data as a global systems integration partner and value-added resellers (VARs) Datacentrix, Bytes and BT.
The company, he adds, has added two major pieces to its partners programme.
The first is joint engagement, where Riverbed and the partner bundle their knowledge to add value to a customer engagement. The other is in embedded solutions, where Riverbed technology is a component of the overall solution.
“We want partners to start building solutions and embedding Riverbed into those solutions, where the outcomes are what is important to the customer,” he says.
Riverbed is serious about verticalisation and is working with its partners to address vertical markets. “With 100 partners that’s a lot easier to do and we can focus on areas where we can make a difference,” Meulema says.
Despite the radical refocus within its channel, he adds, Riverbed remains committed to the channel and still does 96% of its business through partners.