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Channel partner programs are getting an overhaul as IT providers adjust to the demand for digital transformation, the growth of subscription-based models and shifting routes to market.
The changes vary from company to company, but common themes have surfaced. Those include point systems that measure partners on a wider range of metrics, programs that recognize evolving partner business models, and an expanded emphasis on training.
Several hardware, software and cloud purveyors — from decades-old firms to newer SaaS providers — aim to renew their partner ecosystem efforts. Some of the retooled programs are launching in the fourth quarter, while others will debut in early 2023:
Partner program evolution stems from several trends. Customers’ rapid digitalization and focus on achieving outcomes — whether improving customer experience or boosting operational efficiency — rank among the top drivers.
“Basically, everything that’s changing in the world of partner programs is because customers want outcomes, not technology,” said Diane Krakora, principal at PartnerPath, a channel consultancy based in Menlo Park, Calif. “Producing those outcomes requires complex solutions of hardware, software and services.”
In addition, new buyers — line-of-business managers versus centralized IT — want to purchase products and services through non-traditional methods, which has led partners to adopt a variety of business models. The rise of the subscription model, for instance, means partners are moving away from reseller transactions and providing more services, Krakora said.
“Many partners aren’t reselling, and their service offerings are quite varied,” she added. “Lots and lots of different types of partners, with different concerns, means we can’t stack them in programs like we used to.”
The current crop of channel programs uses new ways of measuring partners, with points systems among the methods.
Microsoft’s revised program uses a partner capability score, for example. The company’s ecosystem partners need a capability score of 70 out of a possible 100 to reach the solutions partner level, which lets participants differentiate their services and qualify for benefits. Solutions partner designations are available for Business Applications, Data and AI, Digital and App Innovation, Infrastructure, Modern Work, and Security — all aspects of the Microsoft Cloud.
The partner capability score considers three factors:
In March, when Microsoft previewed program changes, the company offered to tutor partners on the program’s particulars, including the scoring system. Since then, Microsoft has spoken with “hundreds of partners” to answer their questions and gauge feedback, according to a company spokesperson. Partners have been given a dashboard to track their progress toward solutions partner status.
VMware is also deploying a point system, which will launch in the upcoming release of its Partner Connect program. The system marks a shift from measuring partners just on product sales. The company’s expanded metrics will include a partner’s involvement in the customer lifecycle, from pre-sales to post-sales activities.
“They’re doing deployments, they’re doing proof of concepts, they’re doing [VMware] Carbon Black incident responder engagements, tech assessments — all of those start qualifying for points eligibility,” said Kaushik Ram, senior director of partner programs and experience at VMware.
In addition to those lifecycle points, partners will obtain performance points based on not only traditional product licensing bookings but also cloud bookings, subscription bookings and renewals, Ram noted.
A partner’s ability to influence transactions — dispensing customer advice that leads to a sale — also comes into play. VMware plans to award “influence points,” which will prove especially critical for services-oriented partners such as global systems integrators, Ram said. Those partners offer pre-sales consulting and advisory services but may not execute a product or cloud services sales transaction.
Smartsheet, meanwhile, will differentially weigh and score a range of partner characteristics in its revised Smartsheet Aligned program, said Steve Stewart, head of global channels at the Bellevue, Wash., company. Those attributes include the following:
Such measurement systems are replacing traditional partner programs built around precious metal tiers — silver, gold and platinum. Programs that offer a uniform set of benefits to every partner in a particular tier could miss the mark.
“One guy in silver might want discounts [but] another guy might not resell, so discounts aren’t helpful,” Krakora said. Point systems, however, provide benefits relevant to a partner’s business model, she added.
Indeed, partner programs in the works reflect the diversity of partner business models — and the reality that most operate under more than one model. Smartsheet’s updated program will employ three partner transaction engagement models: resell, referral and consulting services. Program participants can use all three models in a single partnering agreement, which Stewart said lets partners add value in different ways.
“We found that partners needed flexibility with how they transact with Smartsheet not only over the course of a year but sometimes from deal to deal within the same account,” he added.
VMware, meanwhile, will roll out its revised program with four business models: solution reseller, cloud services providers, solution services and solution builder. Solution resellers represent the more traditional channel partners, while cloud services providers span the entirety of the customer lifecycle. Solution services partners will include systems integrators, and the solution-builders category will include OEM and ISV partners.
Partners can pursue “one business model, depending on their core competency, or they can be many business models, depending on how they execute that customer lifecycle with their end users,” Ram said. The partner categories aren’t siloed, however, with VMware’s program “giving flexibility for partners to move between business models,” he noted.
Microsoft officials, for their part, have emphasized the goal of backing all partners regardless of business model. The Microsoft Cloud Partner Program sheds the former Microsoft Partner Network’s silver and gold tiers while expanding business model coverage to include ISVs. The company’s ISV Success Program offers cloud sandbox and developer tools for partners developing applications on the Microsoft cloud. Other resources include webinars, workshops and a community of Microsoft and peer experts.
Other cloud-focused companies follow a similar path.
DigitalOcean, a New York company that offers cloud services to developers, startups and SMBs, pursues a partner model designed for multi-faceted partners that play roles from advisor to technology provider. “It’s clear that an ideal partner program accommodates more than one business model,” said Jeff Seifert, vice president of partnerships at DigitalOcean.
Partner training has been a standard channel program component for decades. But this component is becoming less perfunctory and more pragmatic and granular.
Smartsheet training involves increasing levels of specificity. Partners in sales and technical roles complete an introduction to the SmartSheet Aligned program and attend Smartsheet University for product training and certification. From there, partners in sales roles can receive training focused on sales professionals, consultants and engineers. Partners in technical roles can pursue “solution-focused training” geared to professionals, consultants, architects and developers, Stewart noted.
Krakora said she has detected a change in training philosophy among some channel partner programs.
“We’re seeing a shift away from mandatory ‘training’ to ‘prove to me you can do it,” Krakora said. Proof points might include partners demonstrating customer success or testing out of a vendor’s training. Programs moving in that direction emphasize skilled and capable partners able to deliver business outcomes, she noted.
It’s been another busy week on the personnel front across various parts of the channel
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