Don’t Show Me The Money. Why your Cloud Channel Strategy is Flawed.

Why Don’t the Hipsters Take the Money?

George Orwell’s famous phrase from Animal Farm is overused, at least by me. It’s migrated from being a piece of political commentary to become a gimmick. Anyway, here we go again. All animals are equal but some are more equal than the others.

For me this phrase summarises the approach of vendors towards so-called ‘born in the cloud’ partners.

For two years or more there has been a significant interest in the vendor community in finding an almost alchemical formula to attract born in the cloud partners. Some have tried to ply them with gifts, some have sent account managers drenched in saccharine and others have erected marketing enablement palaces to sway these wondrous creatures. Sugar and spice and everything nice in other words. The return on this approach has been questionable so far.

It’s simple enough to explain. It’s much easier to work with a channel partner that has found a way to finance themselves sustainably around ‘cloud technologies’, rather than work with those partners who have been ‘transitioning to the cloud and service led approach’ for the better half of the decade and somehow haven’t transitioned just yet.

The lack of success among the more established vendors in attracting ‘born in the cloud’ partners is harder to explain. I’m a millennial, I understand that there is a ‘generational gap’ and that ‘the millennials’ have managed to infiltrate the deepest recesses of the technology market, playfully contaminating everything with ‘hipsterism’. But if the vendor is putting money on the table, you take it, right?

So what that working with that vendor is like pledging allegiance to Sauron’s tower in Mordor. Rent in the city isn’t cheap, pumpkin latte’s come at a price, and beard trimming costs a pretty penny.

But seriously, why is it that ‘cloud able’ partners are not rushing to expand their offers to accommodate cloud technologies from the established vendors?

Is it about the People?

Cloud implies services and services implies technically skilled personnel. So the scaling of cloud business is about skilled consultants and technicians. Perhaps that’s a barrier for ‘born in the cloud’ partners? Perhaps these businesses are simply not geared up – or not interested? – to attract, train and retain new people to work with new vendor technologies? It’s just too much outside the current comfort zone maybe?

Is it about the Program?

Or perhaps it’s the way that the vendors engage with partners? Most of the established vendor programs have historically been geared towards the resale model, with some modifications for service provider partners. Over the past years most vendors made an earnest effort to remodel their partner programs towards best practices, as perceived by the industry with ‘born in the cloud’ partners in mind. Some have realized these changes better than others, but absolutely the vast majority has worked on this.

Is it about the Proposition?

Being kind, you could say that many vendor cloud propositions to partners are ‘immature’. Some vendors have a model where the vendor sells and the partner implements, although some insist on resale as well. The main complaint I get from talking to partners, particularly in relationships with IaaS and PaaS vendors, is the poor quality of the initial sale made by the vendor to the end customer. Vendors attach IaaS ‘credits’ into existing enterprise accounts, without necessarily defining what can be done with the ‘cloud credit’.

But that whole model seems flawed. Having an end customer come to you with a defined business need is infinitely better than having a ‘locked in’ end customer that is ‘supported’ to generate usage.

Just Like Betting

Here is how I see cloud vendor thinking … “we need to sell X amount of cloud and service it, so we need Yamount of partners with a Z amount of skill.” When this calculation falls through it becomes apparent that the necessary amount of the right partner types does not exist, or even if they do then the community that does exist is lukewarm to the vendor offer. This is then not taken as an invitation to go back to the drawing board, but as a sign that the channel recruitment teams need to work harder to find more partners.

And it gets worse. The established ‘cloud able’ partners that operate at a volume to make them interesting to the vendor have a base of existing clients. And the ‘cloud able’ partner has met the needs of these clients, and made money, using their existing people and skills. Why would they want to deviate from this pattern?

The fact is, there are not enough ‘cloud able’ partners to meet current vendor needs, and the ‘cloud able’ partners out there aren’t easily convinced to invest in people to adopt different vendor technologies. The hipsters like their freedom of choice.

This leaves the layer of fledgling developers and cloud consultancies that have not yet made any money, and have no learned reflexes for choosing a cloud technology vendor, except on the basis of hearsay and market preconceptions. Of which a percentage are likely to be dud. So betting on these is just like, well … betting.

Here is what to keep in mind:

• Nobody out there is waiting for you to roll out your cloud offering. You are in a highly competitive market.

• Do not set up your channel teams for failure thinking that if they ‘push hard enough’ the quota will be met. It won’t be met.

• Millennials and hipsters are of course deplorable but one day it will be their companies taking your technology to end customers … so adapt your approach to meet their needs.

#OpinionPiece