Behind the scenes: planning CRN Pipeline

Planning Pipeline

In the build-up to our landmark conference, the premier sponsors got a sneak peak at our exclusive research into channel relationships.

Pictured: Microsoft's Philip Goldie, Dell's Geoff Wright, Intel's VR Rajkumar, Telstra's Keith Masteron, Tech Research Asia's Mark Iles and CRN's Steven Kiernan

If you would like more information or want to register for a ticket to CRN Pipeline, please head to the event website.

Then we asked vendors, ‘Do you expect to appoint more partners?’ and nearly 70 percent said, ‘Yes, we’re going to appoint some more partners’.

So you get this interesting correlation. But 80 percent of vendors are also expecting more sales through their partners, so there’s a positive message too.

Philip Goldie, Microsoft Our view is that that the channel needs to reflect the size of the potential market. In terms of geography, technological innovation and customer momentum, we still have a fair way to go before we reach saturation point.

We spend a lot of time at Microsoft mapping customer demand and how many partners we need to deliver on that demand. I can tell you categorically, we still need to build more capacity.

Pictured: Mark Iles

If you would like more information or want to register for a ticket to CRN Pipeline, please head to the event website.

Keith Masterton, Telstra I suppose I’m looking from a vendor’s point of view, but I certainly don’t see most partners playing outside of the core telco and IT areas.

I think that number’s got a little bit of fluff in it. Also, when we actually ask buyers how much of the IT budget sits with the CIO, the number at the moment is coming back at 70 percent.

We also asked customers, ‘How much of your IT budget is going to keep the lights on, and how much of it is going to new projects?’ Our research from elsewhere shows the percentage of the total IT budget has gone from about 75 percent to around 55 percent in terms of ‘keep the lights on’ over the last three years. It’s coming down and leaving room for new initiatives.

Pictured: Keith Masterton

If you would like more information or want to register for a ticket to CRN Pipeline, please head to the event website.

It clearly fits with the survey findings – across the board customers, partners and vendors are heavily expecting subscriptions and annuity pricing to increase.

Geoff Wright, Dell We’re getting a tremendous boost in our business at the moment through the fact that our partners want the big lumpy revenue, our customers want as-a-service and we’re using finance tools and working collaboratively with the partner on risk. We’re providing utility models and very complex financing models to customers, but as a very simple solution for partners. Our customers feel that they’re getting it as a service, it could be from a simple lease right the way through to a total utility model for storage – a couple of universities did this.

But our partners, who may be providing the data centre or the equipment to the end user, are actually maintaining the business model of the big transaction, which works for them and their compensation plans. A lot of our partners still struggle with the transition.

Philip Goldie For our teams at Microsoft, irrespective of how you deliver on top-line revenue, everyone is focused on the revenue mix between cloud versus on-premise. The growth expectations for cloud are very high and we’re very clear that we’re driving that super hard.

Pictured: Geoff Wright

If you would like more information or want to register for a ticket to CRN Pipeline, please head to the event website.

Keith Masterton Certainly the biggest challenge we’ve got at the moment is navigating that chasm. We are continually working with our channel; we’ve changed our remuneration scheme and design to support that. We’re engaging different training elements, but I don’t think we’ve got all the answers yet to be honest. I think we’re still working on that transition.

We’ve got a lot of new partners who are already there, but still have a number of partners that are laggards in that regard. We’re providing particularly professional and managed services tools and putting a lot of investment into that development.

Pictured: Mark Iles Keith Masterton

If you would like more information or want to register for a ticket to CRN Pipeline, please head to the event website.

Philip Goldie Microsoft has built its business over many years through partners, and today we still deliver 97 percent of our revenues through partners. One way in which we choose which partners are assigned a partner account manager is their cloud performance. It’s also aligned to the demand we see from customers – not in every instance but certainly that’s gaining more and more momentum. That comes back to channel principles – clarity, transparency and predictability.

So if we’re going to make this change, here’s how it’s going to work, here’s how partners can identify the goal and where we’re placing our resources. It’s clear. Where you get problems is where you’re not clear on why as a vendor you invest resources. The public cloud also allows for insights into things like customer adoption.

We can see how customers are using and deploying these services and which partners are helping those customers get value.

Pictured: Philip Goldie

If you would like more information or want to register for a ticket to CRN Pipeline, please head to the event website.

Philip Goldie Distributors are absolutely critical, because ultimately so much of what we do is sold through them, but there’s a difference between the transactional side and the business development side. Channel development through things like training, marketing and advisory services are becoming more critical at that layer in the channel.

VR ‘Raj’ Rajkumar, Intel In my experience, disties play a very crucial role. Very simply, we cannot actually reach every interested partner. Maybe the top tier, but disties have the important role of reaching the breadth. So disties play a very crucial role in every transition we have successfully done in the channel.

Pictutred: Steven Kiernan, VR Rajkumar and Geoff Wright

If you would like more information or want to register for a ticket to CRN Pipeline, please head to the event website.

VR Rajkumar Change is often challenging, be it for the vendor, be it for the distributors, or be it for the channel partner. In some circumstances it is easy – for example, in a bricks and mortar business, where a partner has been actively reselling computers for a very long time, change is easy because they know the business.

But in new areas, any ‘new normal’ you discuss in the channel, for the first year, it is not successful. Be it cloud, be it IoT, or any new technology. Channel partners never jump into these things just like that. They will listen to the vendors talk, talk, talk and they absorb and analyse. There are partners who want to go and try these things, and there are partners who wait and watch to see whether they’re successful or not, then they jump on the bandwagon.

This isn’t a bad thing. That’s exactly what the vendor wants too. If 4,000 or 5,000 resellers jumped into IoT, does the vendor actually have a go-to-market solution? I don’t think so. We are piloting and in the process we are learning, so initially we only want a few partners who can work very closely with us. In the process we learn from each other, then we can develop the case for the broader channel. That is the easier, proven approach.

If you would like more information or want to register for a ticket to CRN Pipeline, please head to the event website.

Geoff Wright Going back to Phil’s comment about how Microsoft is being incentivised as an organisation – from a hardware and infrastructure perspective, we see our role as being quite a bit broader – we need to do more to assist our partners in maintaining the profitability and understanding how to move their business models.

One of our partners decided to do DR-as-a-service, but before they could go out and really offer DR-as-a-service, run by themselves, they had to understand what the bill of materials was going to be, what the stack was going to look like, and almost have that in place before they sold the first one. If you’re an IT director, you are going to ask where it is, what it looks like, what the service levels are, what the speed will be, show me how it works. As a vendor, we take partner profitability very seriously.

We’ve been looking at how we can bridge the gap between the cost of standing up a stack in your own data centre and actually filling it up. How can we help? We’ve got programs for our partners, which are scale programs – as a partner, in your own data centre, you only start paying for the kit as you use it. We’re helping the partners to make that move, because of that initial cost of setup and then over time obviously they’re the ones who will benefit from that annuity revenue coming in and they can match it to what they’re paying for the infrastructure.

There’s this whole debate around public cloud, private cloud and on-premise, with the hybrid cloud in the middle. How can you prepare your business to be able to deliver all those for all situations? I don’t think there’s any organisation that can say, ‘We’re totally on-premise’ or ‘We’re totally public’. Everybody’s hybrid in some way. As a partner, it’s about trying to work out how to deliver those business outcomes.

Pictured: Mark Iles

If you would like more information or want to register for a ticket to CRN Pipeline, please head to the event website.

Philip Goldie Partners need to go beyond the old reseller mentality. We see partners coming in and genuinely having a business-outcome discussion with a customer where there is zero IT discussion. They can say, ‘You can acquire this capability through cloud or a managed service model, and I’ve got a partnership with someone who can help do that’, but fundamentally I can walk in there and say, ‘Let’s have a discussion about how quickly you can fulfill customer demand, or create a customer experience.’

Pictured: Keith Masterton and Philip Goldie

If you would like more information or want to register for a ticket to CRN Pipeline, please head to the event website.

Steven Kiernan Intel has always been inside other vendors’ solutions. Is that changing?

VR Rajkumar Intel will continue to come up with the building blocks enabling resellers to build solutions that meet customer requirements. That is our strength and we are sticking by it. With the appropriate programs like ‘Intel Inside’, we will continue to collaborate with eligible resellers in crating awareness of the reseller offering’s to the customer.

If you would like more information or want to register for a ticket to CRN Pipeline, please head to the event website.

Philip Goldie It’s an interesting challenge, isn’t it, because the levels of abstraction are moving further and further back. What used to be television advertising ‘Intel Inside’ and then Dell saying, ‘This server’s got Intel Inside’, now it’s the data centre having  a server that’s got ‘Intel Inside’ and then the service provider having a data centre that’s got a server that has ‘Intel Inside’. It’s not necessarily a bad thing, because the ultimate goal for Intel is to sell more processors.

If you would like more information or want to register for a ticket to CRN Pipeline, please head to the event website.

Geoff Wright I’m certain there are sales where Keith’s partners have ended up buying the Dell product to sell as part of Telstra’s solution, which has been funded through a marketing campaign where the money came from Intel and Microsoft. There’s a huge ecosystem, which is just business as usual for us, but I think some of the channel would be quite surprised at how integrated we are as vendors.

If you would like more information or want to register for a ticket to CRN Pipeline, please head to the event website.