In my stump speeches at partner conferences this year, I identify the No. 1 challenge that faces channel partners (and the tech vendors whose products they represent): partners’ inefficacy in reaching and resonating with line-of-business (LOB) decision-makers. 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.
But that tide could be beginning to change. At Salesforce’s Dreamforce conference last week, 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. Block specifically called out channel partners for their ability to empathize with CEOs’ goals of growth and shareholder gain. Block also claims that 40% 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 chops/acumen.
While Block’s partner callout may be considered more the exception than the rule today, it is still encouraging. Some channel partners are making the requisite investments and changes to regain relevance in the largely LOB-driven cloud era. And it shows in the data: Customers’ penchant for cloud channel sourcing has more than doubled, from fewer than 25% of cloud service/solution purchases via the channel in 2012 to more than 50% in 2016.
For years, technology purchasing has been moving away from a central IT approach and into the business. Forrester Data shows that in North American enterprises, 73% of technology spending is either business-led or the business provides significant input into IT’s purchase — up from 71% last year.
Clearly times have changed when it comes to technology purchasing, and business decision-makers (BDMs) are more critical to the process than ever. For example, North American enterprise BDMs reserve 41% of their respective budgets for technology purchases and expect to increase their total spend by 5% over the next year.
When asked why they are spending more of their business budget on technology, North American enterprise BDMs cited three critical reasons. First and foremost, technology is too important for the business not to be involved:
Second, the rising expectations of customers require the business to push IT to keep technology current. And finally, business executives’ understanding of technology is increasing; so, they can interact more effectively with IT.
Thirty-nine percent of North American enterprise BDMs believe that “software is the key enabler for their business,” and helps them to engage with customers. This trend is even more prevalent in Europe and Asia Pacific, where 51% and 58% of BDMs, respectively, believe the same thing. This significant attitudinal shift will continue to shape how software is acquired, deployed, and used to drive business success.
So how can you capitalize on the widespread and significant changes to the B2B technology landscape?
HP recently hosted its Asia Pacific (AP) and Japan analyst event in Singapore. The company presented its “New Style of IT” value proposition and how it intends to position a combined HP hardware, software and IT services stack to deliver client value. After the Boston event back in February, I was particularly interested to see how HP Enterprise Services (ES) is positioning itself as the tip of the spear of the “one HP” messaging and offering in Asia.
When assessing service providers’ relevance to customer needs, I focus on two major areas:
Red ocean offerings – where service providers need to help their clients build scalable, flexible, secure and cost efficient technology foundations around cloud, mobility and analytics.
Blue ocean offerings – where service providers need to help the CIO engage business stakeholders to drive better business outcomes in areas like customer experience, for instance.