The number one challenge facing channel partners - analysts

Analyst highlights 'disconcerting challenge' for resellers

Channel partners' inability to sell to line-of-business decision makers - rather than the IT department - has been flagged by analyst Forrester as the biggest challenge facing the channel.

In recent years, Forrester and other market watchers have pointed to the fact that tech firms and their channels are having to pitch more and more to individual business units, rather than the IT department. A study from VMware in 2013 found that end-user staff are buying cloud services for their department themselves, giving the IT department, which would have procured them otherwise, an extra £1.4m to play with.

But although end customers appear to be embracing the trend of giving lines of business more IT buying power, channel partners are not keeping up, Forrester analyst Tim Harmon said.

"The number one challenge that faces channel partners (and the tech vendors whose products they represent) is partners' inefficacy in reaching and resonating with line-of-business (LOB) decision makers," he said. "It's a disconcerting challenge indeed, due to the fact, of course - as Forrester's Business Technographics data repeatedly demonstrates - that LOB executives have strong influence over technology solution purchase decisions."

He said that this could soon change though, as vendors begin to place more focus on their channels. Salesforce held its Dreamforce conference last week, at which Harmon claims the firm placed more focus on enabling the channel to sell to LOBs.

"Salesforce's COO Keith Block lauded its channel partners, attributing much of Salesforce's success in the past year to partners' success in engaging C-level executives," he said. "Block specifically called out channel partners for their ability to empathise with CEOs' goals of growth and shareholder gain. Block also claims that 40 per cent of customers are insisting on channel partners' strategic involvement in effecting solutions and business outcomes. And Salesforce tends to direct that business to its channel partners with proven business acumen."

Analyst Quocirca's founder Clive Longobttom agreed that repositioning sales towards the LOB is a challenge for today's channel, though not the biggest one it faces.

"They've always had this problem," he said. "When the IT department had the budget control there was no issue. But very few have the budget [now]. That's what I have been preaching for the last 20 years and I am not going to say it's new."

Instead, Longbottom said that overhauling sales commission plans is the biggest challenge partners face.

"When you've got a salesforce which is coin operated, they go out there and say 'wahey, we just sold a million quid's worth of hardware and we're going to get £200,000 of maintenance very year and I am going to get eight per cent of that in my pay packet next month - here comes the Porsche. Compare that with over three years getting £1.6m worth of sales.

"The channel has got to get clever with this. They've got to ease the path for salespeople."