Cloud: Vendors not doing enough for their channels

• Channels hampered by direct competition, lack of innovative solutions, overly complex programs and proprietary vendor technologies
• Only 11% of respondents currently look to their vendors for innovative finance solutions and 19% for marketing funding

RECENT research from Brocade indicates that many channel organizations are being impeded in their efforts to move toward cloud-based professional services due to a lack of flexibility and capability by their vendors.
 
The study revealed that in addition to direct competition, channel organization’s professional services ambitions are being restricted by a lack of innovative vendor solutions, overly complex programs and proprietary vendor technologies, Brocade said in a statement.
 
Based on a survey of over 500 channel organizations worldwide, the report revealed that almost half of respondents expect professional services to become their main revenue generator by 2020. Yet, for the majority of respondents, professional services accounts for 25% or less of revenues today.
 
The research also revealed the growing customer demand for professional services, with complexity and constraints on capex (capital expenditure) reported as the biggest customer challenges. Only 11% of respondents currently look to their vendors for innovative finance solutions and 19% for marketing funding – key when trying to build a brand and reputation rather than sell on price.
 
“Revenue focused channel programs … combined with differentiated technology solutions that help address customers’ needs for innovative and easy to deploy networks, flexible financing solutions … and tools and resources that help channel develop their reputation as consultants, will all become increasingly critical to developing competitive consultancy businesses that drive significant revenue returns,” noted Regan McGrath, senior vice president of worldwide sales at Brocade.
 
He contends that to compete in the professional services sector, channel organizations now need to consider these critical questions:

• Do my vendors’ strategies, vision, and approaches to technology design support or impede our ability to maximize any professional services and support revenue opportunities?
• Do my vendors compete with me for professional services opportunities?
• Do my vendors provide value through genuine technology differentiation?
• Do my vendors provide finance solutions that address customers CapEX investment restrictions?
• Do my vendors provide marketing enablement, access to expertise and tools that help me build my brand?

Brocade believes its Alliance Partner Network (APN) and Brocade Network Subscription meet channel organizations’ challenges.
 
The APN program is designed to deliver ‘success through simplicity’ by taking a modular approach to partner enablement and offering a broad range of tools, assets and solutions that are easily accessible, usable, and targeted at accelerating partner revenue growth from the moment they join.
 
Brocade APN Partners can also secure significant levels of differentiation by offering Brocade Network Subscription, which the company claimed was the first and only ‘pay by port’ subscription solution.
 
It offers customers cost management and fast flexibility to scale up and down to meet business demand, while only paying for the ports in use. Brocade partners can close a deal that may have otherwise been lost due to capex constraints, while offering their customers a clear and manageable path towards their ultimate goals, and securing incremental revenue on an on-going basis, Brocade said.
 
The Brocade Channel 2020: Global Survey (2012) was conducted during June and July 2012, using an online survey service (surveymonkey.com). The survey had 532 respondents worldwide, and respondents from Africa, Asia-Pacific, Australasia, Central Asia and India, Central and Eastern Europe, Western Europe, the Middle East, North America and South America.
 
The organizations that participated ranged in size from those with 0-50 employees up to those with over 1,000 staff.  Channel respondents came from a wide range of organizational types, including SVARs, service providers, VARs, distribution, and hosted services resellers.