What If the Channel Went Away?

Eliminating channels from the go-to-market equation is a means of validating partnership value.

By Larry Walsh

The Channel – with a capital “C.”

We in the industry say it with reverence as if it’s always been and always will be part of the go-to-market fabric.

The channel is changing. New partners are coming to the fore. Old partners are fading into the background. Innovative revenue models are replacing old profit schemes. And expectations are constantly shifting higher.

Through all the change, the channel persists. For most, it’s inconceivable to think of a technology industry without it.

Nevertheless, we must ask the question: “What if the channel didn’t exist?”

I’ve gotten myself into trouble over the past year or so by posing variations of that seemingly simple, yet provocative, question. The reaction is always surprising. Channel chiefs will often bristle with nervousness upon hearing those words. Others are outright incredulous, saying the premise is impractical and impossible on its face.

I can appreciate the anxiety. As one person said, “Basically, you’re telling them to go polish up their resumes because they’re out of a job.”

I’m a firm believer in testing the calcification of individual and organizational thinking by solving existing problems without common solution tools and methodologies. For example: You want partners to invest in marketing, but you can’t use market development and co-op funds to stimulate activity. What do you do?

Posing the notion that the channel won’t exist in five years is my means of testing whether we can validate its current and ongoing utility.

At the Channel Chief Meet-Up West, a new event sponsored by The 2112 Group and 360insights, we talked at length about the need, value, and viability of the channel. The point wasn’t to dismiss the channel, but to assign the channel value and give it a greater purpose.

When asked why companies go to market through channel partners, one channel chief in attendance said, “We’re a channel-centric company. We’ll always work with partners.” He even conceded that his company could shift more or all sales direct and that working with partners is more a choice than a necessity.

When we started probing into his various go-to-market needs and the role of channel partners in fulfilling them, however, the value became clearer. Eliminating the channel from the equation revealed a variety of lost opportunities, increasing costs, poorer customer experience, and incomplete market coverage.

In no way, shape, or form do I believe the channel will disappear in five years.

Moreover, I do not believe the channel will become obsolete anytime soon.

The channel will change as the industry continues to evolve its product and service complexity, transition to recurring revenue models, and refocus on delivering better customer experiences. Vendor and customer needs will change, and that will spur the evolution of channel partners and their role in the go-to-market equation.

Defining the role and value of partners by removing some or all of the channel from the equation is a means of stimulating creative problem-solving and clarifying why we need to work with partners – now and in the future.

Larry Walsh is the CEO of The 2112 Group, a business strategy and research firm servicing the IT channel community. He’s also the publisher of Channelnomics, the leading source of channel news and trend analysis. Follow Larry on Twitter at @lmwalsh2112 and subscribe to his podcast, Pod2112, on iTunes, Google Play, and other leading podcast sources. You can always e-mail Larry directly at lmwalsh@the2112group.com.