I am a technology commercial consultant, helping end users buy from tech suppliers, and tech suppliers engage end users. After 20 years in the supply side, and 10 years on the buy side, I still sit astonished at how awful both sides of the equation are at working together to mutual benefit.
When IT Channel Oxygen reached out to see if I would like to articulate an opinion on why, I couldn’t help but get my rant on and write this.
In the 20 years I was in the channel, I worked for two global service integrators and two mid-market managed service providers. I worked in delivery, sales, channel and vendor management so got a broad sense of the commercial reality of the supply side. At the time I thought it was a tough job, which justified my relatively generous package, and the active mantra was that the buyer, especially the procurement team, were all stupid and the IT industry knew best. There was a cultural arrogance within the channel that built camaraderie across tech companies, but probably in hindsight didn’t build the sort of customer trust that maybe we should have been building….
“There was a cultural arrogance within the channel that built camaraderie across tech companies, but probably in hindsight didn’t build the sort of customer trust that maybe we should have been building….”
Phil Clark, Embedded IT
Now that I primarily work with major corporates who are buying technology, my whole world view has changed. The actual value of the technology industry is on the buy side. Achievement is not measured in revenue per quarter, but in value brought by the technology itself -in terms of process efficiency, risk mitigation and profit generation resulting from the correct deployment of technology in a given business environment. And that the IT channel do not focus on this value assessment is the main reason why end users and IT channel companies do not always see eye to eye.
Right now is precisely the moment to be having these honest and robust discussions. With the technology landscape shifting more seismically than it ever has done before (vendors battling in every category to secure market share and customer attention, regulators and nation states showing increasing interest in the impact of tech on society, aggressive M&A driving some very odd behaviours in the vendor world) the channel and end users need to collaborate significantly more effectively to capitalise on the opportunity safely and quickly.
What needs to change to get this all working better? It all boils down to fair and reasonable engagement. For too long supply has been over-focused on revenue at any cost; and buy has been over-focused on savings at the compromise of quality. Although money is a clearly tangible metric, the commercial world needs to be less worried about the price and more interested in the value.
“For too long supply has been over-focused on revenue at any cost; and buy has been over-focused on savings at the compromise of quality. Although money is a clearly tangible metric, the commercial world needs to be less worried about the price and more interested in the value.”
Phil Clark, Embedded IT
The value of the channel in today’s climate is in helping end users navigate the complexity, abstract away from the risk, and provide reliable trustworthy advice on the vendor landscape. Very few technology procurement professionals fully understand the layers of the channel, and some still think engaging with vendors directly gives them the “best deal”, but the reality is that a good channel partner can operate on behalf of the end user/client to provide alternatives and options that a vendor doesn’t provide. Different licensing types, different products, even different vendors if appropriate – this is advice that many in the end user world really need right now.
This “Trusted Advisor” status doesn’t come easily to the channel. The temptation to chase a quick buck, a quarter end close and the best commission payment is huge, and reinforced by high-intensity vendor marketing, and channel sales management with BMWs to fuel. However, the long game is important right now. End users are nervous, and will strategically work with companies they trust to help them – quickly discounting anyone they feel is not operating in their own best interests.
At the end of last year, I was presented a fantastic opportunity to procure some software. It was direct from the vendor, and they not only dropped their trousers to secure a year end deal but offered me a lovely threat of a punitive price increase should I delay until January. Is that the behaviour of a company that is helping me strategically navigate a complex industry, or a sales rep desperate for their bonus? Whose interests are they focused on? If there was a channel partner in the mix (long story, it wasn’t an option), I genuinely believe the transaction would have been significantly smoother.
End users have a number of key concerns that the channel can support. Each technology purchase is underpinned by:
- Worry of longevity: will it be replaced with something better in the imminent future?
- Worry of hidden costs: will it cause any broader impact on the end user architecture?
- Worry of skills availability: will it be able to be deployed quickly to drive RoI?
- Worry of cyber: regulatory or compliance exposure, will the product or service create a risk that needs mitigating?
- Worry of being ripped off: is the cost appropriate to the market?
All of these factors are the channel’s sweet spot. No-one is better placed to advise on the suitability of a solution, independent and highly skilled technical resources who can provide assurances and alternatives helping the end user make informed decisions, abstracted from a single Vendor option.
The channel, in my opinion, should be in the ascendancy. Providing their primary remit is on providing trusted advice and support to a confused and nervous buyer, they should be able to clean up. There might need to be a compromise between securing a quick transactional deal or two, but helping a buyer secure long term, low risk, value from their technology investments will deliver longer term value to all parties.
Phil Clark
Phil Clark is the founder of Embedded IT, a boutique consultancy providing commercial advisory services to Clients, Vendors and Managed Service Providers.
