Channel partners are critically important for software companies as they seek to grow their customer base. But in recent years traditional channels have been upended – particularly by changing buyer dynamics fostered by cloud computing. In particular it is these changing delivery models which have made direct investment by end users and business stakeholders easier. Channel partners therefore have had to rapidly adapt and change to this new technology landscape.
These changing dynamics make an interesting background to discuss indirect versus direct channels for software companies. TBK Consult recently released a whitepaper discussing some of the challenges here, but also provides a business model framework to help ensure success.
As the report succinctly states “for most software companies the channel is the most difficult element of the business model to organize and scale”. The article highlights how for most companies that manage the channel themselves, they maintain the control necessary for how they win, serve and retain customers. But there is an additional layer of complexity which is introduced when companies start to work with channel partners. That partner will have their own perception of the business reality and are operating an independent, separate business model than the software company itself.
It is this insight which is critical if your channel partner will add value to your business. Understanding that the partner has a distinct business model, which is different from that of the software company, is crucial if they are to be successful. Only once you have this understanding is it possible to create the environment and provide the information for your channel partners to find and grow a satisfied customer base. I encourage you to take a read of the report.