Big-name firms reign over their channel processes
While channel partners have always propelled product sales in the high tech industry, the value of channel strategies has failed to attract attention. This leaves channel sales largely in the control of channel partners, which can lead to huge revenue losses in the long run for companies who should be tracking and managing their contracts effectively. But not anymore.
HP, Dell, EMC, and Oracle all dropped channel transformation bombs within the last year, announcing huge overhauls of their channel strategies that are expected to boost overall revenue. With some of the world's leading high-tech companies announcing huge channel transformation projects, we have to wonder what's driving this change of heart? Why are high-tech companies now taking their channel processes seriously?
There's no single factor that's responsible for this swift channel overhaul. Instead, multiple industry drivers have catapulted the importance of an effective channel strategy into the spotlight. I've spoken with executives, analysts, and partners. With their insight, combined with my more than 20 years of experience in the high-tech industry, I've uncovered five main causes contributing to these large-scale channel overhauls:
The high-tech market continues to shift away from standard hardware and towards cloud services. While selling software-as-a-service is relatively easy for these big-name technology companies, it's not as simple for channel partners that previously spent years perfecting how to sell a box or a licence. Companies like Oracle and IBM are well aware of this problem, and are working with partners to craft more effective selling systems to boost revenue flows.
Long gone are the days where one manufacturer would produce one product and sell it directly to one customer. The technology marketplace is constantly in a state of flux, with new products entering and exiting the market at rapid speeds. Take Apple's failed iPhone 5c, which forced Apple to shrink production volumes after just a few months on the market. While companies might try, no organisation knows for sure the next great success or the next big failure. In addition, a recent study predicts that 50 per cent of all consumption of manufactured goods will come from emerging countries by 2025, which means companies will continue to expand into new and developing markets. For those reasons, the need for effective channel partners that can sell various products to various markets is more important than ever.
Competition in the high-tech industry is higher than ever, as companies face shrinking product lifecycles. This fierce competition is forcing manufacturers to speed up all aspects of production, including time to market, adoption, partner performance assessments, and much more. Yet most companies are relying on channel management systems that are at least 10 years old, which hinder operational speed. EMC knows this problem all too well and recently replaced its Velocity channel programme with the new EMC Business Partner programme. The new system streamlined the path for partners to contact EMC and therefore increased the speed of partner engagement.
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