Things I’ll Think About Over Thanksgiving (Part 1)
Ah, Thanksgiving! The holiday where Americans set aside concerns about obesity and personal finances to gorge on turkey and spend frivolously at shopping malls. As holiday weekends go, this is the granddaddy; we get four and a half days off (admit it, you’re checking out early today). By this time of the year, we need a break to charge our batteries and prepare for the final stretch of 2011.
I’ll be using my downtime wisely. As many of you know, I never sleep. I’m constantly talking with the movers and shakers about what’s happening in the technology industry and the channel to not only understand what’s happening today, but what will happen in the near future. So while watching the Detroit Lions lose with honor to the Green Bay Packers and overloading on turkey and vino, I’ll be pondering some of trends for future discussions and posts on Channelnomics.
Here are 10 things I’ll be thinking about over Thanksgiving, in no particularly order. It’s not a definitive list and priorities may change. In fact, I welcome suggestions. Think of this as a starting point.
1. Vendor Conflict
I woke this morning to chatter on Facebook about Steve Ballmer’s secret desire to cut out the channel and take sales direct. This isn’t the case, and it probably isn’t true. But solution providers should realize that vendors don’t just find themselves in conflict with their partners in the field – they are conflicted in their engagement with the channel in the first place. The channel costs vendors money, and it’s their job to find ways of cutting costs and maximizing their profits. In some instances, that means cutting out partners.
What’s always important is how vendors manage conflict, and frankly I’m conflicted on this. I see numerous examples of how vendors are poorly managing their channel conflict and outright violating pledges of neutrality. Partners are increasingly reporting to Channelnomics that they’re afraid to register deals out of fear they’ll get snapped up by vendor’s direct sales.
Vendors and solution providers need to rethink the notion of channel conflict. Solution providers need to understand that some sales can and should go direct, and they must compete on value – not price – with their suppliers. At the same time, vendors are going to have to devise new means for defining their channels and governing them more judiciously. This means recognizing you cannot have every deal that crosses the threshold.
2. The Social Channel
Bob Godgart keeps teasing us with his new “ChannelEyes” social network for the channel, a service he describes as revolutionary and designed specifically for solution providers. From what we can tell, ChannelEyes is Facebook meets LinkedIn meets Groupon – not a bad idea, but not necessarily original or unique. The channel is already engaged in social collaboration and networking. Solution providers flourish on Facebook, LinkedIn and Twitter, and are also engaged in semi-private social networks, such as Spiceworks. You could argue that Amazon and eBay are social communities through which solution providers engage each other and customers. What’s interesting is not the ability to commune, but the evolution of social media from a communications vehicle to a commerce driver to, potentially, a channel unto itself. What this would look like and how it would work remains the question. (Pass the mashed potatoes, please.)
3. Pricing and Value
This is an issue I’ve been spending a lot of time on lately. I’m working on a research project with partners NetEnrich and N-Able to define best practices in managed services pricing. What’s interesting is how the channel has devolved from one in which profitability was derived from add-on services and complementary after-market product sales to one subsisting on margins provided by vendors. Solution providers of all stripes need to rethink not just how they price, but how they define value to their customers. If we learned anything from the Apple iPad and Hewlett-Packard TouchPad debacle, it’s that people are willing to pay more for what they believe is a premium product, but will buy less value when the price is low. The channel should be about value. How we return to a value-based channel is the question.
OK, I didn’t get to 10. There’s much more I’ll be thinking about over Thanksgiving, so check back for more thoughts. And, as always, let me know what you’re thinking. You probably have better thoughts and ideas than I do.
One Response to “Things I’ll Think About Over Thanksgiving (Part 1)”
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Hi Larry,
Good article. I was especially interested in your comments in section 2. The Social Channel. You are right about the tease factor being used by ChannelEyes since they keep saying “coming soon”.
My company, PartnerOption launched its business oriented social network back in June and have provided functionality aimed at B2B distributors, suppliers, VARs, and other business associates to help build and expand the sales channel. Our membership growth has been steady and we have branched into multiple continents including Europe and Asia.
Our goal was to provide a focused and secure social networking solution to businesses that could not manage the volume or velocity of information that was generated by “one size fits all” networks such as Facebook and Twitter.
Stop by and sign up for a free membership and take a look for yourself.
Thanks,
Bill Keller