One research study suggests the channel is on the threshold of big success in 2012

2012 a “Dragon Year” for channel growth: study

This year sees the worldwide IT channel poised for big growth, with vendors reducing complexity for their partners, working to make the cloud pay off and boosting marketing funds, according to one analyst firm.

PartnerPath, a channel-focused consulting and analyst firm based in Mountain View, Calif., formerly known as Amazon Consulting, released its 2012 State of Partnering Study results this week.

Year of the Dragon?

The company, which surveyed 98 vendors and 250 solutions providers worldwide, suggests that 2012 will be a “Channel Year of the Dragon,” borrowing from the Chinese Zodiac, where the dragon is considered the luckiest year.

That may seem like a bold prediction, but the company’s research suggests that the channel is ready to come out of several difficult economic years.

“Most partners are pretty bullish about what the future (will bring),” said Bob Skelley, executive director of global certified partner programs at Dell Inc. (NASDAQ: DELL), and a panelist during PartnerPath’s presentation of the study results.

Solution providers are optimistic about their revenue growth, according to the report. About 90 per cent of partners who report annual revenues of between $5 million and $20 million expected their revenues to increase this year. Between 65 and 85 per cent of other partners expected similar growth.

Still, some challenges remain with buying behaviour. The partner community did acknowledge that customer decisions are becoming more cost-driven, as they decide to delaying upgrades and fix infrastructure instead of buying new. “That’s clearly kind of the new norm,” said Beth Vanni, vice-president of PartnerPath.

“The smaller guys are definitely struggling more than the larger partners who have more access to capital and solutions that they can sell,” said Paige Erickson, vice-president of North American partners and alliances at CA Technologies (NASDAQ: CA), another panelist.

Driving partner enablement and addressing staffing issues

Ease of doing business is the No. 1 priority for surveyed vendors this year, followed by recruiting the right partners. Increasing partners’ sales skills came in third.

Effective pre-sales discovery, selling value to line of business decision makers and developing vertical solutions and selling approaches were the top three skills vendors are trying to develop in their partners.

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“We’ve been focused on training partners in a sales capacity for quite some time,” Skelley said. Pre-sales training has also become critical for Dell’s strategy.

Vendors also need to work with partners’ time frames for training, Erickson said. Both she and Skelley agreed that a variety of training vehicles — such as instructor-led, online and mobile platforms — is crucial to partner enablement.

Another potential hurdle for partners this year will be staffing. For 2012, 31 per cent of surveyed partners listed access to qualified staff as a barrier to growth, up from 22 per cent last year. Retaining employees is also a management challenge for solution providers.

Having strong partner managers within the vendor organization is one way to mitigate that, according to Erickson. Those reps need to be tuned into what partners need and want. “It makes a big difference when you have the right person in that role.”

About 25 per cent of surveyed vendors said they will offer business and financial management training to partners this year. However, only about a quarter of surveyed solution providers said they felt their vendor partners were actively involved in their business.

Professional services and the cloud

In 2012, helping partners deliver professional services will be a crucial vendor strategy. Partners, though, appear more interested in expanding their managed services and cloud applications as a service, while vendors want to increase partners’ competencies in areas such as pre-sales assessments and post-sale product integration.

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However, most partners said building a cloud practice was not likely for them in 2012. Partners with annual revenue of between $20 million and $50 million are most likely to invest in this area for the coming year.  “Many of them…are still taking a wait and see attitude,” Vanni said.

As the cloud becomes more popular, the roles vendors expect channel partners to take on will also change. For 2012, vendors ranked reselling their cloud services as the top role they want partners to take, followed by managing customer relationships and offering professional services. “We see reselling the cloud services as probably one or two (on CA’s list),” Erickson said.

Channel marketing in 2012

Channel marketing is also priority for 2012, with more than half of vendors indicating they would increase their budgets. About 30 per cent of solution providers said they would increase or improve their marketing efforts in 2012 and ranked this as their No. 1 activity for boosting revenue in 2012.

For Erickson, deal registration incentives are a critical area of spending. “We want to really ensure that they get the recognition for bringing in that deal,” she said.

The channel community is still largely immature when it comes to marketing focus, Skelley said. “The more that we can help them with virtual marketing resources … the more that we can help them drive that new business need.”

Follow Harmeet Singh on Twitter: @HarmeetCDN

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