BLOG | NOV 14, 2019
Managing Your Direct and Indirect Sales Separately Is Hurting Your Business (Part 1 of 2)


Tarik Faouzi
Tarik Faouzi


Industry trends & insights

Earlier this year, I did a three-part blog series that focused on the struggles of small ISVs. Now I want to discuss the challenges that medium to large ISVs face. The problems they are trying to solve are very different from those of small ISVs. These businesses are already entrenched in the indirect channel and think this part of their business is weighing them down.

After being in technology distribution for over a decade, I have seen firsthand the struggles ISVs face in the indirect channel. While they have grown their revenue by going indirect, it has come at a price. To do business indirectly, ISVs have developed technology to support a partner portal. They have also built custom integrations with their partners’ systems. Both are costly investments to maintain, preventing ISVs from achieving further growth.

While it’s clear they need a better way of doing business in the indirect channel, in my opinion, this is only half of the problem. Right now, many ISVs operate their direct and indirect channels in a completely siloed way. Forrester confirms this as a common practice, with 80% of companies across all industries running their indirect sales in a silo.

But this goes beyond just sales and marketing for ISVs. When it comes to their integrations with partners, many are still using electronic data interchanges (EDIs), which take a long time to build and leave a wider margin for error. They also have two different systems for their direct and indirect channel, which complicates how they manage product information as well as how they grow their marketplace of third-party products.

ISVs shouldn’t have to worry about building and managing any system or integration just to do business with indirect channel partners—this is not core to their business. Instead, they should focus their resources on the things they excel at.

This includes developing their products and creating more value-added services for their customers. And by extending a portion of the solution to their direct channel, it can help them distribute any product—regardless of channel—faster than they ever thought possible.

But this begs the question: How do ISVs unite their direct and indirect channel operations? They can start by solving for their indirect channel first. Then, they can reassess how to invest the resources currently being used for their indirect channel back into their core business. I will be discussing this and much more in greater detail in part 2 of this blog series. Stay tuned.

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