Channel Partners Chasing Profitability Due To Lack Of Product Support

By Dave Hauser, General Manager, Cloud and Managed Services, PlumChoice

Cloud sales have skyrocketed in recent years, but if the Software-as-a-Service (SaaS) industry expects to hit Forbes’ projected $67 billion by 2018, someone needs to address a very significant user abandonment problem.

Businesses of all sizes are buying into the benefits and cost savings that the cloud offers — but they’re not reaping the rewards. Instead, they struggle to install, activate, use, upgrade, and optimize those software and services. In turn, they don’t access the solutions, and they certainly don’t help drive upsell/cross-sells and make renewing subscriptions incredibly difficult. So who’s responsibility is it to bridge this gap and help business owners and their employee bases navigate these tools and realize the promise of the cloud? Two groups have a vested interest: the companies developing the software and channel partners.

The developers’ access to end-users is limited because they simply don’t own the customer relationship. They’re not the ones selling their products directly to businesses. The onus is on the channel partner. You’re selling it — you need to support it and have the answers for how users can integrate multiple cloud solutions into their environment. This responsibility has become particularly clear in recent years, when companies like Microsoft began to require that their resellers offer comprehensive services. This is how developers ensure that their products are in the right hands — that will guide end-users through installation and adoption — so everyone benefits from continued use.

OK, so cloud developers and end users are looking at channel partners to provide cloud enablement services such as onboarding, support, and managed services for the things they sell and buy. What challenges do these channel partners need to overcome in their quest to get to market faster with cloud solutions and achieve greater profits?

The pressure — Microsoft, Salesforce, and other giants in the space are frankly fed up with poor activation rates. Software is being sold and/or bought, but after the initial acquisition it is being shoved in the proverbial closet and not activated or used by the customer. Without activation, everyone loses revenue, market share, and upsell opportunities. So, if channel partners want to continue to sell Microsoft Office, Azure, and other product suites to their customers, the pressure is on to be able to get past the initial sale or purchase and make the cloud an asset for customers.

The expertise — Although there is immense pressure to get the customer to activate, use, and upgrade cloud solutions, that doesn’t mean that it can happen at the drop of a hat. It takes historical knowledge, technical background, and an organizational shift many channel partners are not equipped or trained to handle. They need to transform into service providers — and that is a completely new concept. It could be a whole new division of the company, which requires a slew of resources and overhead, and that’s an incredibly overwhelming problem to have.

The customer experience — Providing support along the entire customer journey requires channel partners to exit their comfort zone (sales!) and embrace the customer after the initial sale is made. With a sell-it-and-forget-it mindset, channel partners are not positioned well when it comes to all-encompassing support. Support for cloud services isn’t just about fixing problems — it’s about optimizing experiences and introducing users to new tools and services. There’s a huge opportunity to monetize this support channel and work with customers long-term, but at the very least, it’s got to be about more than checking boxes and addressing complaints.

So what is the solution to the cloud service conundrum for channel partners?

With more than 85 percent of businesses willing to invest in the cloud over the next five years according to Intuit, channel partners need to be doing more so that they can share a piece of the pie with Microsoft and others. For them, this means:

1. Partnering with cloud brokers and enablers. It is too much for channel partners to build out their business to cover the entire customer lifecycle. Partnering with an enabler and/or broker will help channel partners offer a bigger, more diverse portfolio that starts before the sale and extends through ongoing cloud enablement services. Many of these brokers and enablers are Microsoft-certified, which will help in getting in (or back in) the good graces of Microsoft and other cloud developers.
2. Get past the rollout phase. Making the sale is the first of many important steps. However, the key to recognizing revenue is activation. Make sure your portfolio includes onboarding and activation so your company, and the likes of Microsoft, actually recognize revenue.
3. Transfer and migrate. The greatest fear that businesses have with moving to the cloud starts and ends with the transfer and security of critical data. Ease those migration concerns and you are one step closer to winning the customer.
4. Around-the-clock support. Developers are requiring, and businesses are expecting, that all channel partners offer support. If you aren’t ensuring their technology is working together and aren’t around to answer their questions, you likely aren’t working with Microsoft and it is even likelier that you are losing revenue. This support includes sales, migration, installation, and ongoing support.
5. Layer in managed services. Once you’ve mastered the above, you can take it one step further by adding managed services. These services will help strengthen the customer relationship even more and will appease the large cloud developers by putting even more money in their pockets.

If you’re a channel partner planning to popular cloud solutions on the market, are you prepared to meet the growing demands of today’s cloud user? If not, that subscription, seat, or purchase may be a one-time deal that leaves you chasing churn, instead of growing your business.