The traditional way the structure of the IT channel is explained to industry newcomers tends to be in the form of a diagram, with vendors at the top, distributors in the middle, then resellers, followed finally by customers.
But as solutions, rather than products, become more and more important to the channel, these lines are blurring, and fast. Many partners are finding that teaming up together to provide a customer with a vendor's solution is the way forward, giving way to the emerging ‘partner-to-partner' model.
This was one of the key underlying themes at Microsoft's Worldwide Partner Conference in Toronto this week, at which a number of Microsoft partners were sounding each other about the very model.
Dan Scarfe (pictured), founder of New Signature (formerly Dot Net Solutions) and UK president of the International Association of Microsoft Channel Partners (IAMCP) said that the model is fast becoming the new normal in the channel.
"These silos of partners are going by the week," he said. "We're starting to see partners having to branch out into areas - resellers doing project-based services, systems integrators like us having to licence sales with CSP [Cloud Solution Provider programme] - there is a complete blurring. Now there is a set of capabilities - core services, managed services, software IP services - and a partner may have one or more of those services but they are not really sitting in a pigeon hole any more. That is really driving this partner-to-partner thing. It's impossible for one partner to do all of these things."
In the UK, there are 25,000 Microsoft partners, meaning those looking for an ally have plenty of choice. At WPC, although none of the senior executives explicitly encouraged partners to join forces during their keynotes, the UK partner business did publish a blog post on the topic.
Microsoft UK's partner marketing manager Maxine McDonald said in the blog that the increasing need to specialise in the channel means it is important.
"It's great to know customers are looking for specialists, but can you really be a specialist in everything?" she said. "What are the options available to you? How should you best extend your portfolio to provide a wider proposition to customers? Adding value is key - services, managed services and IP, instead of just reselling a particular technology."
The blog went on to give advice to partners looking to pursue this model, insisting that they ought to set clear goals before they begin, and establish points which are negotiable and non-negotiable at the outset.
Richard Hughes, Microsoft partner eBECS' business development director said that the traditional vendor-distie-reseller linear model is now more of a circle, or a web, instead.
"Customers don't want to go to one partner for one thing and another partner for another and try to get them to work together," he said. "They sit in the middle and everyone points and says ‘it's their job to fix it'. People don't want that any more. That's why we hear so much about partnerships."
Taking things further?
As more and more partners look to team up, the amount of consolidation will rocket, New Signature's Scarfe added. Last year, Cloudamour got snapped by fellow Microsoft partner RedPixie, and just last month, Microsoft partners Utilize and C2 joined forces, representing just two examples of consolidation in the Microsoft space.
Scarfe said his firm's plan is to grab other UK Microsoft partners.
"That's our plan and we've raised significant amounts of money to do exactly that," he said. "So we're going to be buying other partners in the UK and other resellers and distributors will be acquiring capabilities. We're going to see huge consolidation in the Microsoft channel in a few years."
"We've grown up and realised there are some things we do, some things partners do and it all comes down to trust at the end of the day"
Although there may appear to be many benefits of teaming up with fellow partners - such as taking advantage of each other's specialisms and improving customer satisfaction - the fact remains that partners tend to compete with one another.
But Scarfe said this is something the channel needs to get over in order to succeed.
"We've grown up and realised there are some things we do and some things partners do and it all comes down to trust at the end of the day," he said. "You want to create great experiences for customers and if that means sharing the pie, then that's what's right for the customer. I think we're going to see it more and more."
And while the partner-to-partner model may bring about benefits for the partners and vendors themselves, other firms are jumping on the trend and cashing in themselves, like start-up Channeliser, which describes itself as the eHarmony of the channel, connecting up firms operating in the industry.
Its founder Jacqui Rand said that the timing for the business she runs is just right.
"No partner is an island," she said. "They can't work in isolation and they need to partner up to bring the right solution to the customer. What's absolutely inherent is partners talking to partners and building solutions together.
"Microsoft are very, very aware of this. The whole landscape of vendor, reseller, customer, is changing. It's this kind of real mish-mash of so many different types of organisations connecting with one another."
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