Author: Yvette Ross, Sr. Manager Insights and Intelligence, CloudBlue
Channel leaders will be successful in expanding their partner programs and building broad, efficient ecosystems only if they get rid of their manual and error-prone processes, keep track of the latest market trends, and grasp emerging opportunities, according to Jay McBain, a principal analyst at Forrester.
McBain – who leads Forrester's research and advisory for global channels, alliances, partnerships, and ecosystems – addressed thousands of attendees during the second day of the CloudBlue Innovators Virtual Forum, an online gathering of industry experts to discuss the most important trends in the cloud and subscription economy.
Kicking off his speech, he stressed that one constant fixture in today’s volatile business world is that channels and partnerships of all kinds bring “a lot of value.” According to McBain, 64% of the $3.5 trillion spent by businesses and governments on technology each year “flows through partners of different types.”
He also provided valuable insight into trends companies must keep in mind in order to be successful:
An emerging trifurcated channel model
Highlighting what he wrote in a blog post in January, McBain said the channel has long been synonymous with transacting partners and resellers but things are changing.
Industry leaders are contemplating a trifurcated model consisting of influencer channel, transactional channel, and a retention channel, he noted.
McBain told the audience that creating an “influencer channel” made up of affinity partners, referral agents, affiliates, advocates, ambassadors, and alliances is absolutely essential for success.
He also said a new “retention channel” is starting to take hold as businesses are shifting to a recurring, subscription-based model. However, he noted that the traditional “transactional channel” will not go away.
The changing demographics of business buyers
McBain told the Forum that millennials are expected to represent the majority of technology buyers in three to four years and should be taken into account in all decision-making processes.
“We know that 65% of cloud decisions today happen outside of IT, and there is a higher likelihood that a millennial is involved or leading the decision than if it was an IT infrastructure-type decision,” he said.
Because millennials came of age with Amazon and iTunes, their buying experience is drastically different from that of their parents. This will transfer over to their business buying behavior.
The rise of marketplaces
One big revenue driver in successful ecosystems is marketplaces, which McBain says companies should put at the forefront of their efforts to build strong ecosystems. According to his calculations, there is also a lot of room for growth. He said that there are 35 million potential opportunities across 12 lines of business, 297 sub-industries, 197 countries, 14 sectors and segments, and 26 technology categories to build a marketplace today.
He did not specify them but said these opportunities have been created because businesses are looking to automate workflows and processes, accelerate their cloud initiatives, explore ways to counter security threats arising from the growing remote work trend, and seek tactical business consulting to survive and thrive.
Building successful ecosystems demands powerful measurement
Another issue brought to the participants’ attention was that unlocking the power of partner ecosystems demands powerful measurement.
“The KPIs of the past do not really survive into this future model and definitely don’t survive in an ecosystem,” McBain said. “How you report back to the CFO or to the board changes as well.”
Quoting a recent Accenture survey, McBain noted that 76% of CEOs think their current business model will be unrecognizable in the next couple of years, with ecosystems expected to be the main change agent.
McBain’s keynote brought out my excitement for the future of channel ecosystems. From massive growth in areas such as marketplaces, to the emergence of new classifications for different types of channels, to new technologies to better help manage and measure channel success, it is clear after listening to McBain’s keynote that the future is bright for the channel.