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Accelerated digital transformation opens partner opportunities

The pandemic has catapulted channel partners and their customers into a new mindset about digital transformation and how technology is adopted and used; other news from the week.

The COVID-19 crisis has accelerated digital transformation, influenced technology adoption and altered customer mindsets.

The result is dizzying change but also a set of new opportunities for channel partners. Speakers at CompTIA's ChannelCon online event this week described a fast-moving environment that's driving foundational change for business and technology leaders -- and the service providers that support them.

"We have sort of time-traveled over the last four months," said Betsy Ziegler, CEO at 1871, a university-affiliated technology incubator. "The digitization that's gone on in the last four months would have taken years to do had it not been for COVID."

The ongoing shift isn't strictly about the technologies of digital transformation, however.

Seth Robinson, senior director of tech analysis at CompTIA, said cultural change separates the organizations that are faring better than others facing the pandemic. CompTIA recently published a white paper on emerging technology and its role in digital transformation.

"You can have this checklist of, 'Have we migrated to the cloud?' but if you are not actually using these technologies properly because of the culture that you have in place, you probably weren't positioned quite as well as you could have been," he said. "I think we have seen a lot of acceleration, not just in the technology adoption, but also in mindset and in the way that people are approaching problems and thinking about the technology."

Top opportunities for the channel

Jay McBain, principal analyst of channels, partnerships and ecosystems at Forrester Research, said emerging technologies that once had three- to five-year windows now have apertures of 18 months to two years. Against that backdrop, partners can expect to see automation, cloud computing, security and customer experience (CX) as key business areas.

"The No. 1 opportunity coming into the second phase of COVID, over the summer, is around automation and really putting in AI and workflows and processes to really drive the organization," McBain said.

Second on the list, he said, is cloud acceleration. Microsoft Azure, AWS and Google Cloud Platform were all growing more than 50% prior to the pandemic, he noted, while SaaS companies, such as Salesforce and ServiceNow, were expanding in the 30% to 40% range. Those companies and platforms remain the "bright spots" in IT spending, although growth rates have slowed amid the economic crisis, he added.

Security ranks as the No. 3 opportunity, followed by CX/employee experience, e-commerce and marketplaces, McBain noted.

"Those partners out there who are really driving those … major practices today and have those skills, have a huge backlog [and] have a huge demand for their services right now," he said.

Transformation's multiplier effect

Looking at the bigger picture, organizations are not just adopting technology, but transforming their businesses to boost CX, create new offerings or meet other goals. "All of that has a massive multiplier" for channel companies that engage with customers in such business-defining conversations, McBain said.

The transformational business won't be the exclusive province of the global IT professional services firms. McBain said he sees the activity moving downstream. The resulting projects may not be multimillion-dollar megadeals but will provide "tactical, here-and-now" partner opportunities this summer and going into the fourth quarter.

Advice for channel sales and marketing in the COVID era

CompTIA's ChannelCon event also explored how channel sales and marketing strategies are changing during the pandemic.

Sales and marketing efforts, a perpetual challenge for many channel partners, have largely moved online due to the health crisis, speakers said. This has meant that partners need to change their approaches in order to maintain and grow their sales pipeline.

"We now have no more excuses for waiting on digital transformation," said Larry Walsh, CEO and chief analyst at The 2112 Group, a business strategy firm. "The channel is grossly underprepared and ill-equipped for what is commonly called 'omnichannel.' [The] things that we need to do in order to rebalance our go-to-market strategies and operations to be able to connect and maintain connectivity with customers are going to [depend] on being able to meet them online wherever they come from."

Channel Maven Consulting chairperson and founder Heather K. Margolis said the current social and economic climate has made it critical for channel partners to build relationships with their end customers. She said relationships should be built focusing more on helping customers achieve business outcomes than with a vendor-partner's technologies.

Some of Walsh's and Margolis' top recommendations included the following.

Modernize how you engage online. Walsh said partners should take a hard look at how they digitally present themselves to the world. "Go through a modernization process, not only [on your] look and appeal, but on [your] messaging. … Make sure that your digital billboard is … actually reflecting you properly and is easy to understand and consume," he said.

Use LinkedIn. LinkedIn isn't only used for job-seeking and hiring purposes anymore, Margolis said. The online professional networking platform can now serve as a vehicle for identifying leads. She suggested that partners block off Friday afternoons to research and connect with people on LinkedIn.

Measure CX and communicate success. Walsh recommended that partners start looking at how they measure CX "and apply that experience not only back into [customer] accounts so that you don't lose them, but then translate [it] out to others who don't know you so that they will see the good you have done for others."

Share relevant content with customers and prospects. From a sales perspective, partners should "start to think about setting up sequences where you are doing a series of emails that share relevant content," Margolis said. She suggested asking vendors for help with multimedia content -- videos, webinars and podcasts, for example.

Use demand generation education. Margolis suggested channel firms take advantage of the demand generation education offered by their vendors.

There is no longer an excuse [for] why you can't invest in marketing.
Larry WalshCEO and chief analyst, The 2112 Group

Walsh said COVID-19 has accelerated sales and marketing trends that were already developing before the pandemic. "The things that we have been talking about -- omnichannel experiences, enhanced customer experience, digital marketing, enhanced service delivery … these are the things that are now absolute necessities going forward," he said. "There is no longer an excuse [for] why you can't invest in marketing. … The rules were already being rewritten around you. The pandemic just brought them to the fore faster."

The Syndicate Group taps channel for startup investment

The Syndicate Group (TSG), a boutique venture capital (VC) firm based in Los Angeles, is offering channel partners opportunities to invest in startups and gain early access to emerging technologies.

The VC firm emerged from stealth this week. The company said it vets the fastest-growing Silicon Valley startups that have a channel strategy in place. Early-stage companies haven't always been quick to latch onto the channel. But, in recent years, more startups have turned to partners from the beginning of their operations.

That shift is picking up speed, according to TSG founder and CEO Chad Cardenas. Startups in various technology subsectors are "trying to get to market faster than ever before," he said. "I think they realize they can't wait until they have their first $5 million, $10 million, $20 million of revenue to get serious about the channel."

Cardenas has experience in channel, startup and VC areas. He was previously president and CIO at Trace3, an IT solutions provider and consulting firm based in Irvine, Calif. At Trace3, Cardenas helped put together the company's Venture Capital CIO Briefing Program, which partners with VC firms to plug its clients into startup innovation.

He said the thinking behind TSG is similar, especially from the channel point of view, but the current VC endeavor differs "in the sense we are tied into the actual investment flow of capital with startups."

In the past, investment access to top-tier technology startups was closed off to channel partners. TSG, however, aggregates relatively small investments from channel companies, such as VARs, systems integrators and consulting firms. More than 445 channel companies are participating in TSG's investment platform, along with more than 45 enterprise technology-focused VC firms "for sharing deal flow and coinvesting," according to TSG.

As for enterprise technology categories, TSG will focus on startups in areas such as next-generation infrastructure, networking, cloud computing and security --along with AI and machine learning as technologies that overlay the other categories, Cardenas said.

In addition to the investment opportunity, channel partners will also benefit from "keeping a close finger on the pulse of emerging technology," he said.

Other news

  • SolarWinds Corp., an IT management software vendor based in Austin, Texas, said it will weigh the possibility of spinning off its MSP business into a separately traded public company. If the split were to happen, SolarWinds would focus on corporate IT organizations, while the separate MSP-oriented entity would be entirely focused on service providers. The separation would let each company pursue its own business strategy, while letting shareholders "more clearly evaluate the performance and future potential of each entity on a standalone basis," according to SolarWinds.
  • Rackspace Technology Inc. raised about $704 million in an initial public offering. The managed cloud services company was taken private in 2016 by Apollo Global Management in a $4.3 billion transaction.
  • Accenture hosted a virtual commencement ceremony for 31 apprentices graduating from its national apprenticeship program. The apprentices are moving into full-time assignments at the professional services firm. Other partner companies have also launched apprenticeship programs to address the IT skills gap.
  • Area 1 Security, an email security solution provider based in Redwood City, Calif., launched a partner program for MSPs, VARs, solution providers, cloud distributors and technology alliance partners. The company said its SaaS offering provides a recurring revenue opportunity for channel partners.
  • D&H Distributing, a distributor based in Harrisburg, Pa., unveiled a portfolio of business continuity offerings. The portfolio includes resource guides geared to different vertical markets and turnkey offerings encompassing areas such as data access and security, remote device management and collaboration.
  • Stanley Security, a security solutions integrator based in Indianapolis, said it invested in Evolv Technology, which specializes in AI-based touchless security screening.
  • Pax8, a cloud distributor based in Greenwood Village, Colo., has entered a partnership with Liongard, which offers a unified automation platform for MSPs.
  • Cybersecurity services firm High Wire Networks said it invested an additional $500,000 to improve network resilience and capacity for its Overwatch Managed Security Platform as a Service.
  • Collabrance, a master MSP based in Cedar Rapids, Iowa, rolled out a new portal for its MSP customers. The portal contains on-demand training, tools and other resources, Collabrance said.

Market Share is a news roundup published every Friday.

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