In this Channel Insider article (or this interview where he says the same stuff), we get a summary of a Forrester keynote about how the channel is changing. Jay has been predicting the death knell of the channel as long as I can remember. [There will be Change, but there always is.]

“The good news is the channel is growing and full of opportunities.” That is true. But what segment of “The Channel”? There is not one channel; there are several. MSP, VAR, agent, ISV, dev, etc. Certain segments of The Channel are in turmoil due to M&A – mainly MSPs & Agencies. Another segment [VARs] is being swept up by vendors, like HPE, Dell and Cisco who are changing to a subscription or HaaS model. It seems like they don’t mean Channel so much as they mean MSP & VAR.

Also, Jay and Co. proclaim that businesses are procuring software from marketplaces. What types of businesses? Small, very small, mid-market or enterprise?

All marketplaces are not equal. “By “marketplaces,” we mean Salesforce, Adobe, Azure, Oracle Cloud Marketplace, AWS, IBM, Google Cloud, SAP, ServiceNow, Workday, Dell, Sage, Alibaba, Rakuten, eBay, Mercado Libre, and Walmart+.” How are eBay and Walmart+ comparable to Oracle? Where is Amazon on that list? Who is buying “tech and telco” from eBay?

If 90% of software will be procured through a marketplace, why did Telarus sign up Nord and Netacea sign up Upstack for distro deals this week when neither one is a distributor of anything but commission checks? They are brokers formerly known as master agencies.

If 90% of spend will be “partner assisted” does that mean partners end up being affiliates? It certainly sounds like if it isn’t “partner sourced”, then the partner’s compensation will be smaller. It makes me wonder who is paying for install, support, management, training and break/fix? The customer? For stuff they only rent? The partner won’t be able to for the tiny commission check. Microsoft lost a third of its partners when it closed SBS and tried to force Office365 on all partners. Not all partners want to sell stuff for a referral check. Mainly they like technology and watching it help businesses do work.

When you consider a $400 invoice, represents less than $100 to a partner to pay bills, comp sales reps, and support the customer, how many hours can you spend with a customer per month for $60-80? Not much.

Doug Dawson wrote about the data storage dilemma that is coming. There is also the power and climate problem coming. How do these conflagrations affect the current Forrester trends? Data centers are burning up too much power (and not enough of it is renewable). The cost of storing data will increase as more and more data is stored by each person and business – iCloud, Google, Amazon – photos, songs, movies, Instagram, FB, and on and on. Do these costs – power, storage, carbon offset and more – get passed along to the buyer? Yes. So all subscriptions will increase soon.

Will most businesses rent everything and own nothing? That changes the balance sheet and increases the cost of doing business. If you rent everything and store everything in the cloud, who controls your data? That gets into a whole other debate about privacy, security and liability.

“But the big change is that 80% of these partners will no longer collect customer funds.” The understanding is that if it is procured via a marketplace, the bill will come from the vendor or the marketplace; the MSP won’t bill for it or white-label it. Unfortunately, white-label and single-bill are not going away. Just look at cybersecurity and UCaaS where MSPs white label, bundle and bill for those services. If the MSP isn’t billing for it, again who will support it?

I see a different section of the channel and a different segment of businesses. I don’t have a data driven 10,000 foot view (and I don’t talk to enterprise CIOs, who quite frankly probably don’t know anything about procurement).

Scroll to Top