Colt Revamps Its Channel Approach - Have They Missed A Trick?

 

This week, Colt launched its Ceano cloud services for SMBs with a particular focus on the reseller channel that actually services these businesses. As this announcement combines the business strategy of a telco provider with an innovative channel strategy, Forrester analysts Dan Bieler and Peter O’Neill have again combined (as in their previous blog on Cisco) to discuss their impressions:

Dan.Ceano is impressive in that it constitutes a true end-to-end platform, ranging from the network solutions provider to the channel partners and service enhancers, to the CIO of corporate clients, and all the way to employees – i.e.: the actual users of Colts’ services. The main area of improvement of Ceano vs the previous customer engagement relates to the presentation of Colt’s portfolio.

Peter.Well, I had already called out their impressive channel strategy a few months agoand this announcement continues that story. Leveraging the technologies from the ThinkGrid acquisition, Colt partners are now easily able to orchestrate, provision and manage the Colt cloud services for their clients – and the system supports the partner’s own business processes from quotation to billing.

Channel partners can also select the right business relationship with Colt to suit their own strategy: they can be Agents, Franchisers, Distributors or Resellers/Managed Service Providers. That is particularly important for me because our research shows that many channel partners are still insecure in adopting cloud computing services and require additional support.

Dan.However, I do not think that they have gone far enough, especially given their impressive inroads into agile solutions. Their top-down structure should be structured exactly in the opposite direction: from the end-user perspective to the business-line manager, to the CIO, to the channel partner, and to Colt. I would suggest Colt is placing too much emphasis on technology in its client- and partner-facing approach. The structure of its platform is set up around drop-down menus for technology options. Whilst this might work for its partners, this approach is most likely inappropriate for the business-line managers, let alone the actual end –users of the services Colt offers.

With few exceptions (Apple), technology companies continue to fall into the trap to push technology rather than solutions and services for business opportunities and consumer tastes. This technology approach was less of a problem in yesteryears when the CIO decided more or less independently how his organisation should use technology. Business-line managers make their own IT purchases if they feel that the CIO does not support them. The other day we met a CMO of a business with 50,000 employees who decided to buy his own CRM tool from his marketing budget, because the CIO did not react to repeated specific marketing requests for the right technological support structures.

PeterYes, their assumption is that the partners will continue to adopt a role for SMBs that is the same as IT organizations in enterprises. But you are right, just as the IT department is now less relevant in many technology projects, the same is happening with resellers to SMBs. Today is very different. Employees and consumers in companies of all sizes are making their own choices how to use technology, including the actual providers. They buy the devices they want and download the applications they like. So, even channel partners in the technology industry must market their services much more – and to these business buyers. And the marketing interaction has changed: we like to talk about the change from an offer-respond-fulfill interaction, where marketers do email campaigns to generate leads; to “need-match-engage” where buyers do their own research first and then call the vendor who seems to be able to match their need. 

Dan.  So Colt and its vendors risk falling into the trap of using the language of technology to sell their products and services. As a result the marketing message will not reach the increasingly important target audience of business line managers and employees. The technology experiences by business line managers and employees are more driven by experiences these individuals gather as consumers than CIO directives. The best way to address business line managers and employees is via usage scenarios. Show business line managers and employees how other businesses manage to open up new revenue opportunities and solve challenges – with the help of technology. Colt should consider structuring its Ceano platform along usage scenarios, such as “workplace”, “customer engagement”, “support services”, “innovation drive”, etc. Under these headings various portfolio items can be assembled, always indicating what the portfolio items would be used for and linking these explanations back to use cases. This way, business line managers can more easily engage with CIOs and Colt’s channel partners in the development of the most relevant solution to their specific requests, whilst remaining aligned to an existing product and service portfolio.

Peter. Actually, I consider the technology and business process (for the partners) offering is so strong that I think that Colt should really invest in marketing and turn up some marketing power around those ideas. I envisage something like IBM did back in 1998 when it educated the world about eBusiness. The marketing program would entail image and solutions marketing to the SMB end users, creating pull towards their cloud services; as well as training of their partners to take advantage of the expectation that good marketing would be setting. Another thing though. If they did turn up this power, they would need to expand their service offering – back up and recovery, storage, email management are not the winners anymore. They need to recruit some innovative business applications into their service portfolio.    

Dan.Agreed. Ceano’s current portfolio is also missing important service components, in particular communications, social engagement, and device management. But I suspect Colt is well aware of these gaps and is working to fill them. Colt should use the months that it will take to enrich the Ceano platform to analyse customer behaviour and experiences.