Mamdouh Ismail, Regional Channel Lead, Extreme Networks – META, on the need for greater synergy between vendors and partners for better business outcomes.
What underpins the success of a thriving channel partner ecosystem? How can partners and IT vendors benefit alike while navigating the complexities of today’s technology landscape?
With 25 years of experience in sales in the tech business, there is one thing I can confidently say that has not changed: the importance of creating synergy between partners and IT vendors under a mutually beneficial and strategic framework. Just like any meaningful relationship, personal or business, this requires constant effort, communication and commitment of time and resources. Our relationship is a symbiotic one, where we grow together based on the investments – both tangible and intangible – that we make into our relationship.
Let’s put some numbers behind that. According to Forrester, more than 70% of global IT sales revenue is generated through third-party channels, underscoring the pivotal role they play as the bridge between technology providers and customers. As such, IT companies must continually refine and invest in their channel strategies in order to stay competitive.
My stance on this is underpinned by the changes we are seeing in the industry. Companies like Extreme Networks are working to show that networks are not just a cost center but a strategic asset that drives tangible business outcomes – and it’s working. Customers now see networks as an investment area and as such they are becoming more specialized in-house, with non-IT management exerting greater influence over IT decisions. Channel partners are therefore tasked with delving beyond just the technical specifications, to aid customers in differentiating between IT solutions based on actual business results and problem-solving capabilities.
The rapid deployment of tailored, customer-centric solutions is also shaking things up with intensified competition among technology companies – which is always a good thing. Customers are increasingly open to embracing new technologies, if they complement their business strategies and focus for the future. They are also willing to incur the costs of switching IT solutions, and overcome the initial pain points in doing so, to reap the long-term benefits. This paradigm shift has led to higher customer churn rates, which requires partners focus on continuous innovation and invest in customer post-sale relationships to be successful.
In light of these factors, we need to reallocate our focus from more traditional mechanisms when it comes to partner strategy, to properly integrating our channels in our business plans. This includes offering them advanced training on our tools, developing unified marketing strategies and keeping their input in mind when it comes to our overall targets. However, this will not work unless we have a solid foundation that underlines our interaction with our partners.
I say that because by first establishing that solid foundation, here at Extreme Networks, we have managed to increase our channel by 20 percent year on year. We believe that the core tenets to a successful partner strategy are simplicity, profitability and recognition of the efforts of our partners in order to optimize their performance.
Simplifying Channel Programs:
Simplicity and consistency should serve as cornerstones in designing any channel program. From partner onboarding to convenient access to training and resources, executing operational processes, and ending with compensation and incentives—programs should offer seamless end-to-end functionality. A streamlined approach eliminates wasted time and overcomes potential roadblocks, allowing both vendors and partners to better meet their goals.
Prioritizing Profitability:
A more profitable channel program translates to a win-win scenario for all parties involved. Illustrating this point, here in the region we have worked closely with a new, up and coming channel partner which was a start-up around five years ago. Today, that same entity is a multimillion-dollar business, that works with us on some of our biggest clients.
One viable option to increase profitability for our partners is implementing a simplified rebate system that emphasizes growing existing business and securing net-new wins, along with additional incentives for driving higher subscription and service revenue mix. Additionally, technology vendors can introduce global specializations for industry-leading partners and distributors who are driving demand and transformation in their respective industries and GTM motions. Ultimately, sharing gains with partners demonstrates a commitment to their financial well-being, and can be done in a multitude of innovative ways.
Recognizing Partner Contributions:
Research underscores the impact of employee recognition has an equal if not greater effect on performance as financial incentives. Given that many technology companies see their channel partners as an extension of their team, the same principle should hold true here as well. Introducing enablement and incentive programs enriches the channel ecosystem and for many global companies, we should also be conscious about tailoring these incentives to suit diverse countries, regions, and verticals. This allows us to ensures inclusivity and relevance on a global scale.
While there is no one-size-fits-all approach to channel management, certain key principles can be actively embraced to foster channel and distributor success across technology spaces, industries and geographies. These strategies, when thoughtfully implemented, advance our shared objective of delivering better outcomes to customers through innovative and new ways.
