intersection of the channel and the cloud

Ian Moyse Sales Director

Workbooks.com (Cloud CRM Vendor)

Chris Becwar Marketing & Strategic

Alliances Director CCI Channel Management

Solutions

The Intersection of the Channel and the Cloud

www.channelmanagement.com info@channelmanagement.com 415.427.5100

What We’ll Cover

1. Big Picture: how cloud is transforming the biz landscape (Ian)

2. Crossing the ‘cloud chasm:’ the tricky days ahead (Ian and Chris)

3. Strategies: A new model begs for new approaches to channel motivation (Chris)

Ian Moyse: Speaker Profile

• 26 yrs+ in IT, 9yrs in IT Security, 7yrs in Cloud

• Sales Director, Workbooks.com, Cloud CRM Vendor • Sit on Board of Eurocloud UK • Sit on Governance Board of Cloud Industry Forum (CIF) • Advisory Board Member SaaSMAX • Advisor to Board for Evoco ‘Journey2Cloud’

• Named by TalkinCloud one of the global top 200 cloud channel experts in 2011 • Listed on the MSPMentor global top 250 list for 2011

• Named ‘Channelnomics 2011 Influencer of the year for Europe’ • Won ‘European Channel Personality of the year 2011’ • Awarded global ‘AllBusiness Sales AllStar Award for 2010 • Thought Leader to ‘Compare The Cloud’ • Comptia Cloud Essentials Exam Certified 2012 • Worldwide SMB Nation 150 Channel Influencers List 2012, 2013 • Approved Speaker Schoolspeakers.co.uk • Runner Up 2013 Contribution to IT Award – Network Computing

Chris Becwar: Speaker Profile • Director of Marketing and Strategic Alliances at CCI

o Leads marketing strategy and operations, expanding CCI’s partner ecosystem, and contributes to CCI’s consulting practice.

• Led Xora’s channel engagement with Verizon, AT&T, and Sprint while building strategic alliances with Apple, Motorola, Samsung.

• Led corporate marketing and channel relationships for GreenRoad with Qualcomm, The Hartford, Marsh, and Zurich.

• With DigitalGlobe, helped company through IPO while leading global go-to-market initiatives and building channel alliances with Oracle, Microsoft, Autodesk, ESRI, and others.

Guidance At Every Step

Program Design

Program Development

Program Evolution

CCI: the Industry Leader in Incentive Solutions

Configurable SaaS Application

ROI Metrics

Multi-currency/lingual

Fund allocation

New fund set up

Approval workflows

Partner and Activity – add, deletes, changes

Email alerts

Global Program Management

Available follow-the-sun support

Partner Support

Program Administration

Claim administration

Payments

Comprehensive Solution Set Distributor Reseller Sales Reps Consumer

Co-op/MDF/BDF

Streamline management of joint marketing programs

Marketing Planner

Plan marketing programs, forecast and measure ROI

SPIF & Rebates

Run short- and long-term incentive programs

Sales Performance Rewards

Reward channel partners for attaining sales goals

Trade-In Rewards

Manage incentive programs requiring physical return of goods

Opportunity Management

Deal Registration, Lead Management, Referral Rewards and Special Pricing

CCI Clients

Ian Moyse

Big Picture: How Cloud Is Transforming the

Biz Landscape

Sales Director, Workbooks.com @imoyse

www.ianmoyse.co.uk

xxxxxxx

The World Is Changing: Movies

The World Is Changing: Music

The World Is Changing: Books

The World Is Changing: Photography

The World Is Changing: Postal

The World Is Changing: IT

IAN MOYSE

Ian Moyse & Chris Becwar

Crossing the ‘Cloud Chasm:’ the Tricky Days Ahead

General Resale Challenges Today • Recessive market, customers burning solutions for longer

o Customers struggling themselves and more cost conscious

• Highly competitive market

• Decrease in margins available from third party commodity items

• Demand from vendors and customers for ‘certified’ channel partners o Increases in the cost of training and certification

• Increased cost of employing and finding quality skilled labour

• Reduction in the dependency of many vendors in channel and/or partner sales

• An increase in vendor direct sales via either telephone or the Internet

• Demystifying and deskilling of some common IT services putting pressure on services revenues

• Consolidation of large computing vendors

• Reduction in "value add" of vendors and distributors

• Increased competition from vendors competing directly against smaller ISVs

Why Do Channel and Cloud Collide?

Financial worry over who bills the client, how its billed, what margins? Are there services? Deal values, annuity vs. up front?

Competition from vendors, cloud resellers, XSPs

‘Cannabalisation’ – New vs. existing business, renewals

People skills: How are sales people compensated, deal protection /value differentiation?

Will the Channel Come Out to Play?

“More than half of resellers are not currently selling any cloud”

Channels Concerns with Cloud Solutions

• Vendors having direct customer relationship

• Cannibalization of existing revenues

• Lower sales values

• No installation charges

• Is there any consultancy around the sale?

• Where’s my differentiation gone?

• Billing model’s effect on cash flow!

• Vendors know who my customers are!

Channel Barriers

Why Would You Not Sell Cloud to Customers?

Benefits of Reselling Cloud

Cloudy Channels Will Be Different

• New Values from Distribution o Aggregation (billing) or sell through o Broad base vs. specialist distribution values o New types of distribution relationship with ‘Cloud Focus’

SaaSMax, Cloudmore, Jamcracker, SaaS Plaza

• Resellers o Levelling the playing field for smaller resellers o Selling new vs. protecting legacy business a challenge

• XSP (ISP, MSP, etc.) o Billing models and systems already in place o Adding cloud to their portfolios

• Pure play cloud resellers / specialist teams / new brands

• Sales agents – referral partners, creating opps for vendors to fulfil

Users Will Find Cloud Suppliers

http://channelnomics.com/2012/10/04/cloud-buyers-seek-partners/?utm_source=Channelnomics+Contact+Us&utm_campaign=ef3e151a77-Weekly_eNewsletter_10_08_2012&utm_medium=email

Chris Becwar Director, Marketing and Strategic Alliances

CCI: Channel Management Solutions

Strategies: A New Model Begs for New Approaches

Channel Evolution and Mix

Direct Corporate reseller

Distributor

VAR Retailer

Distributor

VAR Retailer

System Integrators

Direct Marketers

Hosting/ Infrastructure

Solution Providers

Distributor

VAR Retailer

Cloud Agents

System Integrators

Direct Marketers

Hosting/ Infrastructure

Solution Providers

Lewin’s Stages for Organizational Change

1. Unfreeze

• Help the partner be open to changing their behaviour

2. Change

• Move through the change process by guiding partners to adopt new ways of doing business

3. Refreeze

• Ensure the change becomes permanent and partners continually refine in the new paradigm

Education: Needed Throughout the Chain

• Partners need to extend ‘trusted advisor’ status into cloud • New sales skills needed: Locus of demand is shifting away from

IT to various business units: support, finance, HR, etc. • Measurable, video-based training and certification on: o New products o New business models o New sales techniques

• Address partner concern about cash flow. Pay sales first year up front? More salary based? Individual discussion.

• More than ever, CAMs need to be trained as business consultants.

Incentivization • Still too much protecting incumbent revenue by vendors

and partners!

• It’s a great time to reassess how we incentivize the channel. Time to re-orient $$ toward cloud

• MDF as % of revenue needs to change, since partners won’t get all revenue until the end of subscription period.

• More important than ever that MDF be based on an approved partner marketing plan.

• Consider a more points-based approach, targeting: o Relevant certifications o Separated P&Ls for cloud & traditional o Rewarding agent relationships o Cloud-specific marketing approaches

Hybrid Incentive Models

• Avoids alienating partners whose business model better supports the traditional offering while helping them add value with a broader offering.

• Allows stability as they integrate cloud into their core offerings.

Example: Vendors get 100% of the first year subscription margin upfront, as with an on-premise solution. 10% margin on annual renewals (not offered with traditional solutions.)

Incentives Based on Total Contract Value (TCV)

• Account for the total lifetime value of a new deal.

• If a reseller sells a monthly subscription for a 3-year contract period: consider an incentive structure based on the full value of the deal and pay a portion of that incentive up front.

Give partners a commission for the TCV of the subscription (price*seats*term) plus a recurring fee to incent partners to actively manage and service the account.

The Rule of 78s

Financing for Partners

• With economic dip, finding sources of credit is challenging.

• Help partners through the transition until the annuity model smoothes out.

• Accelerating the transition fills the ‘revenue gap’ for vendors and partners.

Lewin’s Stages… Into the Cloud

1. Pre-cloud • No major change needed

2. Unfreeze • Help the partner be open to changing

their behaviour

3. Change • Guiding partners to adopt new ways of

doing business

4. Refreeze • Ensure the change becomes permanent

and partners continually refine

Lewin’s Stages… Into the Cloud

1. Pre-cloud • No major change needed

2. Unfreeze • Help the partner be open to changing

their behaviour

3. Change • Guiding partners to adopt new ways of

doing business

4. Refreeze • Ensure the change becomes permanent

and partners continually refine

Up-front revenue Accrual-based rewards

Education Strategic BDF/MDF

Hybrid incentive models Points-based rewards

Growth of agent and managed services partner programs

Good Reference Points

http://www.cloudindustryforum.org/

http://www.eurocloud.org

Thank You &

Questions

Ian Moyse Sales Director

Workbooks.com @imoyse

www.ianmoyse.co.uk

Chris Becwar Director, Marketing & Strategic Alliances CCI: Channel Management Solutions

chris.becwar@channelmanagement.com

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