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The Channel in 2012: Trends and Predictions for a Doomsday-free Year

January 11, 2012

Andy Wright, CEO Ian Hutchieson, Channel Development Director, EMEA Vaughn Aust, VP Client Solutions Claudio Ayub, Chief Channel Strategist

Fact. The Channel will not end in 2012.

Putting the "Sweet" in Your Online Marketing Suite with a Supplier Network

September 21

Channel Incentive Programs for a Sluggish Economy

October 20

Trends and Predictions for a Doomsday-free Year

January 11

Our panel for today's webinar

Andy Wright


Claudio Ayub

VP, Chief Channel Strategist

Ian Hutchieson

Channel Development Director, EMEA

Vaughn Aust

VP, Client Solutions

Hi, ready to make it smart?


Partner ecosystem analysis and modeling Performance dashboards Program analysis



Strategic consulting CRM consulting Channel research Health checks

hawkeye drives solid channel intelligence into everything we do--built on a unique, datadriven approach that delivers.

programs communications

DATA communications strategy


Interactive and digital marketing Integrated, multifaceted campaigns

strategy programs


channelMDF channelCampaigns channelRewards channelRebates channelDeals



Channel Landscape Economy, cloud, consumerization,

mobile, social, data

Marketing through Partners

Vendor Assisted Marketing

Partner Engagement

Social media, gamification

Motivation & Compensation

Channel adapting to a recurring revenue model


Smart channel investing to drive the right partner behaviors

The Channel Landscape

"The stock market has predicted nine of the last five recessions."

Paul Samuelson, Nobel Economist

Economic recovery in 2012 is uncertain

Forrester predicts slow, but positive growth

Global IT purchases (2011) of $2,042B USD

­ $509B software (25%) ­ $416B hardware (20%) ­ $405B consulting & services (17%)

Global tech growth in 2012 estimated at 5.5% Slowest growth in Western & Central Europe Fastest growth in Eastern Europe, Middle East, Africa, Latin America, APAC

Channel impact: economic uncertainty means that companies plan for slow growth, with budgets that are often contingent

"Computers in the future may have only 1,000 vacuum tubes and perhaps only weigh 1.5 tons."

Popular Mechanics, 1949

Mobile technology ­ laptops, tablets, smartphones ­ is changing not just how we play, but how we work: any time, any where

Three verticals most affected by mobile technology: sales, healthcare, education By 2014, smartphones will outstrip desktops and laptops ­ combined (Gartner, 2011) Tablet and PC numbers will equalize by ~2015 (479 million tablets; 535 million PCs) (Gartner, IDC) Ideal for content consumption (not creation)

Any time. Any where.

Channel impact: salespeople engage with customers ­ onsite - where it matters most; increased opportunities for partner communication & engagement

When I took office, only high energy physicists had ever heard of the even my cat has its own page.

Bill Clinton, 1996

Sources: Economist, 2010; Facebook, Twitter, MySpace, US Census Bureau

86% - business tech buyers who use social media at work (Forrester) 82% - B2B companies that use social media (White


did you know?

Revenue growth of social businesses is 24% higher than that of less social businesses (McKinsey)

81% - Adults that use social media 67% - B2B companies that blog and generate more leads than blog-less companies

Channel impact: engagement with partners requires a shift from thinking about "partners" to thinking about "individuals"

"There's no way that company exists in a year."

Tom Siebel in 2001, talking about

Cloud computing is driving a paradigm shift as pervasive as the introduction of the `net

The global cloud computing market is estimated to be $150 - $160 billion by 2013 and $240 billion by 2020 (Gartner, Merrill Lynch, Forrester) Forrester predicts the most sustainable growth will be in SaaS (growing from ~$20B in 2011 to ~$93B in 2016) which will comprise a fourth of the packaged software market by 2016 IaaS will grow quickly ­ to $5.9B in 2014 - and commoditize

Microsoft SaaS costs may be up to 10% more than traditionally packaged software as they provision data centers

Channel impact: vendors and partners adapting to a recurring revenue model of business; vendors searching for ways to help partners adapt business models

"640K ought to be enough for anybody."

Microsoft Chairman Bill Gates,1981

Data is proliferating at an unprecedented rate, but provides no insight if unorganized

Growth of data: 800% in five years (Forrester) Business email is growing 25-30% annually (IBM) Kilobytes, megabytes, terabytes, petabytes, zettabytes ­ storage and security are significant issues for the industry

Channel impact: data proliferation requires more commitment to analytics to yield insights and facilitate program adjustments

"I think there is a world market for maybe five computers."

Thomas Watson, IBM Chairman, 1943

Employees expect a consumer-like experience in the workplace including any where, any time access to information

45% - employees who feel their personal computing devices and applications are better than what their business IT depts. provide 27% - executives who have a strategic vision for employee adoption of consumer technologies 23% - employees who use their personal computing devices irrespective of corporate policies (Accenture)

Channel impact: partner programs need to mimic a consumer experience in ease of use, look and feel

Marketing through Partners

Vendors spend 35 ­ 54% of their channel marketing budget on marketing through partners.

Up to 50% of these funds can go unused.

Sources: Baptie & Co. Benchmarking Study; Sirius Decisions

Savvy vendors are recognizing that marketing through partners requires different approaches.

Automation Pre-packaged marketing plays Concierge service CAM as marketer Training

Vendor assisted marketing is facilitated by vendors, driven by partners, and executed via online marketing tools.

Automated marketing tools provide the sophistication to make marketing through partners easier than ever before for your channel.

Gives vendors greater market reach, especially the small ­ mid market segments Vendors maximize marketing investment

online tools facilitate the one-to-many approach Closed loop Portal improvements and tools help partners

Partners without marketing expertise able to leverage great content

Marketing plays are smart. Vendors win. Partners win.

So, why marketing plays then?

Master agency drives execution and maintains efficiencies Breadth and depth of choice that includes integrated campaigns and new media Vendors can pre-approve campaigns Closed-loop campaigns help both vendors and partners adjust marketing activities to maximize return on investment Partners get the support they need to understand and select marketing campaigns for their business and their customers

New media.

Boost MDF program efficiency by offering both marketing play and marketing automation payment with MDF dollars.

Traditional media.

Integrated campaigns.

Your action plan for 2012

Expect to see even more emphasis on marketing through partners in 2012.

Audit existing marketing resources for partners Assess what can be automated and what can be pre-packaged Provide partners marketing advice based on market segments, geo, vertical ­ could be from field or centralized via a concierge service Offer full-service closed-loop, pre-packaged campaigns from multiple vendors and for multiple offerings

Harness the full capability of Vendor Assisted Marketing to increase productivity and profitability for you and your partners.

Partner Engagement

2011 ­ The year social media came of age

95% of companies are planning to invest more in social media Companies see Social offering the most benefit for:

Branding building ­ 90% Interactivity ­ 89% Insights ­ 81% Marketing effectiveness ­ 78%

did you know? Companies use an average of 4.6 social platforms

Leading channel vendors use Social to drive Partner engagement and grow business

2012 - greater insight from listening will drive channel program strategy and priorities Strategy, Programs, Tactics

Content. Social. Investments. Resource.


Breadth and depth. Go where your partners are.


Data. Comments. Analysis. Connect the dots.

2012 - greater insight from listening will drive channel program strategy and priorities




Integrated Relevancy


2012 ­ Marketing efforts will expand to include content aggregation as well as content creation





Social media content will become embedded throughout your Partner program and Partner Program content will be used in social media

User (partner) generated - customer testimonials, tweets, wall posts, blogs, blog comments Vendor generated ­ repurposing brochures ,data sheets, past webinars in your search and social marketing New content sources ­ Account Management, Product, Technical

Gamification. The insertion of game dynamics and mechanics into non-game activities to drive a desired behavior.

"Serious games allow professionals to inherently comprehend system interactions, and accurately model the potential business outcomes that can result, in a way that no other medium can do"

Nancy Pearson, IBM vice president of SOA, BPM and WebSphere

You can "gamify" your channel program with just five essential elements.







Adapted from R. Wang & Insider Associates, 2010.

"We were worried because this was not a consumer audience. We were worried they would see it as a consumer thing, but they didn't."

Rishi Dave, Executive Director of Online Marketing, IBM

Dell World 2011

Points and badges awarded for:

Customers downloading content Customers amplifying the event Customers networking

Your action plan for 2012

Revisit and revise your programs and communications plan to embrace social business and gamification

Drill down on your objectives to identify new ways to engage with Partners Assign resource with clear KPIs and project goals Evangelize Test and make real-time decisions

Motivation and Compensation

Channel partners are suffering from "cloud identity disorder."

Tim Harmon, Forrester

What are the challenges that you face?

What are the challenges you face?

· Do you have a clearly defined and communicated value proposition? · Have you identified partners with the potential to be a strong cloud services provider? · Can you provide them with effective cloud business model transformation and demand creation assistance?

The major focus in 2012 will be on Cloud services business model transformation

What do partners need most?

Business model transformation assistance

Resources to offer customized, scalable cloud solutions A sound Cloud services business plan

Marketing knowledge transfer and tools

Marketing expertise, support Pre-packaged, Cloud services marketing campaigns

How do you motivate and compensate partners and their teams in a recurring revenue model?

The value of a deal is not as clear-cut in a subscription business:

Long Term Value (LTV), not unit price Adjust compensation model (MRR, QRR, or ARR) Compensation calculation includes: LTV, RR, interest for the cost of capital, number of recurring payments, and churn.

Motivate Partners with compensation based on the LTV which is always proportionate to the recurring revenue.

Your action plan for 2012


Key drivers for successful evolution of your Channel Program

Enable and motivate

Partner readiness for Cloud services, delivery models, skills Campaign assistance to drive leads and awareness Partner workshops

Reward and compensate

Adjust your incentives programs and formulas to motivate and reward Partners who are making the move with you to the Cloud


Here are some interesting percentages

99% 6% 1%

Channelinsight, 2011

So what are the 1% doing?

Cleaning their data Getting basic real time and offline reporting in place and acting on it Using analytics to measure the incremental effect of incentives Reducing and simplifying programs and developing one source of truth Using the results to drive everything else

And what are the other 99% doing?

Letting the leaks continue Allowing programs to proliferate Designing programs without good intelligence on what will work And complicating life for partners into the bargain

So what is getting in the way?

So what is getting in the way?

Organizational issues

So what is getting in the way?

Organizational issues FUD

So what is getting in the way?

Organizational issues FUD . . . and 2011

Your action plan for 2012

So how do you join the 1%?

Don't just take the first step, it's about moving forward Pick the biggest program for the most impact Set up a comprehensive review

Thank you

Andy Wright CEO 425.656.5868 [email protected] Ian Hutchieson Channel Development Director, EMEA 44.20.8614.9593 [email protected] Vaughn Aust VP Client Solutions 425.902.5146 [email protected] Claudio Ayub VP, Chief Channel Strategist 786.205.6113 [email protected]

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