09 Sep Up-Leveling the IT Channel Beyond Go-to-Market

September 9, 2021

Is the IT channel a thing of the past, a legacy of times gone by? In B2B SaaS, the channel accounts for less than half of the indirect activity compared to legacy client/server technologies. So, is it time to retire the term channels or at least start talking about it beyond channels of distribution, resellers, and an indirect route to market?

Channel and Ecosystem guru and Forrester Analyst Jay McBain talks about the 2020’s as The Decade of the Channel Ecosystem and that the channel has trifurcated into a pre-sales, sales, and post-sales beast. With all of this complexity, we have two options: either bury the word channel and pivot to partner ecosystems or make the channel classification relevant again.

I think the fast-track to up-leveling the channel is to add a second dimension. The first dimension, the GTM Channel Function is nothing new; channels are typically viewed as a Route-to-Market and part of the GTM/pipeline creation function.  Adding to GTM, we are proposing the second dimensions of Solutions Channels.  Whereas GTM Channels focus on value across transacting, influencing, selling, and marketing, Solution Channels focus on co-innovation, integrations that drive product value, and professional and managed services that drive customer value realization.  Having the Solutions Channel vector start Product Integration up-levels the channel landscape to align with how B2B SaaS companies think about partnerships.

In the matrix below, we’ve plotted out each channel vector and included traditional partner types in each box of the matrix. Even today, these traditional partner roles already perform both GTM and Solution Channel functions.

Each vector/arrow end point in the channel matrix can be seen as a function of channel value; the channels’ function in driving Solutions (either product or customer value) or GTM (either in procurement or influence). This two-dimensional channel matrix is well aligned with best in class partner programs that have already pivoted to embrace partner functions. The core functions of develop, transact, influence, implement, and manage are the recognized ‘functional foundations’ for organizing ecosystem programs.  As a result, relating each of these program foundations to this two-dimensional channel matrix might drive a M.E.C.E. re-classification of the word channel.

Rounding out this the channel make-over, here some important channel nuances to up-level the channel concept for 2021+:

-Channel functions are multi-directional. In the old days, if you were a vendor selling kit, the channel was your downstream selling engine. With today’s marketplace commercial models, you can strive to be a channel for your partners (e.g., you bundle and resell the partners who address gaps in your portfolio) just as much as your partners can be a channel for you. Co-selling motions are all about this two-way dynamic.

-Channels can be seen as Ecosystem connective tissue. Consider that value is delivered across an ecosystem by way of this channel of connective tissue between partners. Our matrix depicts this in examining the P2P connection opportunities between a strategic partner and a set of common or extended access to the strategic partners’ SI’s and VARs of that partner.

-Channel functions can be mixed and matched. In any given ecosystem node, you might have a unique combination of potential channel functions (build, transact, influence, implement, and manage); programs need to be highly dynamic and flexible to allow partners to programmatically participate in one or more of these different channel functions.

-Tracking diverse channel metrics becomes imperative. As channel functions expand, so does the need to track diverse metrics beyond source and resale revenue. It is the mix of metrics that blend together uniquely for a given partner that maximizes combined partnership value. Partnership Leaders need to be data nerds and invest in innovative tools and processes to track these metrics and how they interrelate.

Love to start a discussion, ping me at allan@digitalbridgepartners by email, or in Partnership Leaders or Cloud Software Associations Slack channels.