The symbiotic relationship between high-tech providers and their channel partners has always been at the core of both parties’ success. And that’s never been truer than today. But the relationship is undergoing a once-in-a-generation shift due to the confluence of rapid technology change, the emergence of new competitors, rising customer expectations and the impact of the global pandemic. To stay relevant and win market share, providers must fundamentally reinvent their partner value proposition and relationships.

What’s Changing?

Over the last years, and accelerated by the pandemic, there’s been a swing in the balance of power—from technology providers to partners. According to Accenture’s “Future of Partner Ecosystems” research study, 77 percent of partners surveyed stated they have more provider choices than three years ago. One highly visible change in the mix has been the ascent of cloud providers, which now make up the majority of a typical partner’s revenue—a dramatic shift from the days when hardware providers ruled the roost.

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The main criteria for a partner when selecting a provider is the providers’ ability to innovate.

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of partners surveyed say they have more choices of providers compared to three years ago

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are looking for new sources of revenue growth said the partners surveyed

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This rapidly changing landscape means providers can’t take the relationship for granted. In fact, seven in 10 partners agreed or strongly agreed that influence has shifted from vendors selecting partners to partners selecting vendors. Providers need to work harder to win a fiercer battle for partner mindshare and market share. How? They should focus their leadership and resources on three key aspects of their partner relationships.

1. Co-innovating for Growth

Co-innovation—jointly exploring new ways to create solutions to address key and emerging customers’ needs—is critical according to our research. According to our survey, 83% of partners agree the future of their business depends on a provider-partner ecosystem that fosters innovation. In fact, ability to innovate is the #1 criterion when partners are choosing a provider to work with. The primary business objective for 45 percent of partners is to expand their business by bringing more consistent innovation to their products and services.

But innovation isn’t a solo performance. Today’s most successful innovation happens when providers and vendors work together to solve business problems, create new solutions, and enable new experiences for their customers—custom-fit for their needs and business models. Neither party can create these solutions and experiences alone; they need each other. By multiplying brainpower, co-innovation serves customers more effectively and develops a more extensive and deeper relationship between providers and partners to enable these solutions.

2. Collaborating at Scale

In today’s environment, the provider-partner relationship has to get much deeper. Both parties must plan, go to market, and deliver outcomes collaboratively. Furthermore, partners must work with each other. Thus, collaboration will require multiple engagement models ranging from provider-to-partner to partner-to-partner. We found that 86 percent of partners agreed that, as the world moves to tailored solutions, partner-to-partner collaboration is more important than ever. It can enable better dialogue not only with a single partner, but also with all partners across a broader ecosystem.

What does this new collaborative ecosystem look and feel like? It’s no longer primarily a traditional reseller model but, instead, supports collaboration on more complex solutions and platforms. The new, stronger collaborative ecosystem can produce better results because partners can work with other partners. This could be, for example, independent software and hardware vendors collaborating with service providers to create a more effective, tailored solution. Or it could be partners in different horizontals—say, a partner specializing in security and one with analytics expertise—coming together to extend the current customer’s footprint.

Providers should be the catalyst for and orchestrator of these new types of collaboration among various companies that can complement each other to deliver a differentiated solution for end customers.

3. Co-investing for the Future

Providers need to coordinate their partner investments to ensure they’re aligned on how to drive innovation and maximize positive business outcomes. Providers also should explore new types of incentives to drive better co-investing mindsets and ensure they’re co-investing with the right set of partners demonstrating the right behaviors.

Leading providers are shifting from traditional co-investment methods such as market development funds, co-marketing, and pre-sale discounts. They’re moving to such things as financial and non-financial resources allocated to partners to identify, define and build collaborative offerings; discounts or rebates given to the partner to apply to services or innovative solutions that, ultimately, drive consumption; and other non-financial perks for partners to grow their business—for example, a higher level of partner support for engineering support on solutions.

Importantly, providers should ensure their co-investments are offered beyond the reseller community and made available to other partner types that influence the customer journey. For example, providers should incent their independent software vendors for generating leads and referrals, influencing opportunities, and driving increased adoption of providers’ platforms.

A Whole New World

It’s a different world out there now when it comes to provider-partner interactions and business relationships. Providers must lead with a mindset focused on shared ecosystem success that fosters co-innovation and collaboration with partners—or face an existential threat to their businesses. Providers should offer their partners a path for growth and help develop the capabilities they need to achieve that growth. They need to create a partner strategy with partner and customer experiences at the core—experiences that enable meaningful outcomes and profitable growth for the partner, supported by the provider’s capabilities and resources.

Today, partners have more choices of providers than ever. To be a provider of choice, high tech companies must create a compelling partner experience and lead in channel co-innovation.

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What does this new collaborative ecosystem look and feel like? It’s no longer primarily a traditional reseller model but, instead, supports collaboration on more complex solutions and platforms.

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David Sovie

Senior Managing Director – High Tech, Global

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