Predictions: Channel Dying (Still)

I think since the keynote in Boston in 2015, every pundit has predicted the demise of the channel partner. Some day they may be right. I can see why the CCA would predict that Affinity Programs will work better than traditional partners in driving traffic to cloud marketplaces. Truthfully, those marketplaces have been around a long while and have sucked. Not user friendly. Not SEO enabled. Not anything but an Aldi like experience.

The prediction now is that businesses are ready to self-serve on all manner of cloud. If that were true, what is stopping them? You can self-serve Office365, Google, CRM, Slack and so many other apps. Why do they think that if some partner drives traffic to a cloud marketplace all of the sudden sales explode?

The one thing that gets lost is how much a partner guides a customer. The other thing is how much of IT and telecom is not user friendly. It is not plug and play. It is not intuitive. Heck, even buying Office365 from Microsoft is a HUGE mess especially if you are keeping your own domain for email. It is all manner of WTF.

How many businesses rush to buy telecom services? Hardly any unless the PBX is smoking. That’s how much they enjoy dealing with the archaic process of telecom.

If it was greenfield – they never had a domain, an email, a CRM – if they were starting fresh – sure, a marketplace might work – if the buyer didn’t want to just go direct.

How many software projects fail? Most of them. Why? It isn’t easy or pretty. Data is in silos. Data is only easy to get to if you are Facebook or LinkedIn, then any hacker can have a buffet of data. But for the average business, connecting all of the data from the billing, ordering, servicing and CRM systems is not just a matter of a password and username.

To get to the point of one call close at a call center or to stand up an intelligent IVR with chatbot, many components have to be stitched together like menus, FAQs, recordings, data and more. This is resembles a Calm puzzle more than plug-and-play.

Pundits (and analysts) may see a pattern emerging of traditional partners being less involved in cloud projects, but that is due to a few factors. One is that traditional partners are sales agents only – like in the insurance business. Another factor is that the traditional channel partner is aging out, which brings us to the current crop of M&A transactions whereby MSPs, masters and agents are merging or selling off bases. With that level of M&A activity, the partners are spending more time cleaning up their business for an exit than learning how to get involved in a cloud marketplace.

I will add that the cloud marketplaces I have dealt with have done a really poor job of explaining what is involved and what they really offer. It is often pictured as Affiliate Marketing from the early 2000’s when everyone had a CJ and Linkshare account. Anyone who is an Amazon affiliate will tell you how much that has paid out over the years.

When I read the pundits predictions, I look at the investor filings of the cloud communications providers and see that over half the big deals are coming from the channel – and realize pundits just talk to hear their own voices. Thanks and have a nice day.

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